You know that moment where you ask yourself:
Why on earth did I waste my money on that?
Crappy feeling, isn’t it?
But here’s the thing:
In order to stop wasting money, you have to identify the common expense traps. And you know what?
Every dollar you spend is a trade-off. You’re giving up the choice to save money, get out of debt, or reach other financial goals.
We’ve all made silly mistakes with money. But the first step in fixing the problem is to learn what causes it.
1 | Interest
Did you know the average person spends $280,000 on interest in their lifetime?
Let’s face it.
Lenders make a killing off of interest.
Unfortunately, you can’t just tell your lender to put the payment towards your principal.
You have 2 options:
1) Pay More Each Month
2) Lower Your Interest Rate
If you’ve read our debt payoff story, then you know that we recommend a company called SoFi.
SoFi offers two free services:
1. Student loan refinancing
2. Personal loans
What is student loan refinancing?
If you’ve found yourself on the wrong side of student loan debt, refinancing can be a big help.
Student loan refinancing means they pay off your existing loan(s) and give you a new loan with a lower interest rate.
This works if you have one student loan or multiple student loans.
If you have multiple loans, then they’ll combine them into a single loan with a better rate.
This means instead of having 2 or 3 separate lender payments, you’ll only have one – which can make it easier to keep up with your bills.
What are personal loans?
The average credit card has an interest rate of 19.24%. So it’s smart to transfer your credit card balances to a personal loan with a better interest rate.
Not only will you save money in interest, but you’ll lower your monthly payment.
Note: You can read more about SoFi in our SoFi Review.
2 | Bottled Water
Do you like bottled water?
There’s one problem. Bottled water costs up to 2,000 times more than tap water.
Talk about wasting money.
So what should you do?
You can buy a water filter and save tons of money in the long-run.
Elite Daily published a hilarious article on why we’re being stupid if we still buy bottled water.
Here’s their short summary of why people buy bottled water:
– They think it’s safer. Not true.
– They don’t like the taste of tap water. Buy a filter.
– They aren’t thinking about the environment. Please do.
Saving money and saving the environment? Win-win. So here are the purifier and water bottles I recommend:
3 | Upgraded Shipping
Think about it:
You use to have to leave your house to waste money.
These days, with the internet at our fingertips, you can waste money while lying in bed – without even touching your wallet.
And upgraded shipping is one of the easiest traps to fall into.
When you want something, you want it now. And that’s what causes us to spend twice as much in shipping fees.
Here’s the thing:
If you’re a regular online shopper, it makes sense to upgrade to a service like Amazon Prime. The cost of the membership will be less than the amount of shipping you’d pay.
But if you aren’t an avid online shopper, then remind yourself to not fall into the shipping trap.
Note: If you want to try two-day shipping, click here for a 30-day free trial of Amazon Prime.
4 | Brand Name Medicines
For most products that are exactly the same – people would normally buy the cheaper one. But for some reason, this isn’t true for brand-name medicines.
Even though they have the exact same ingredients, many people don’t go with the generic. But when was the last time you checked the price difference between ibuprofen and Advil?
There’s a $20 difference for those two medicines even though they the exact same ingredients. That’s insane.
5 | Hot Water
Some old habits are hard to kick.
Admittedly, I used to have a bad habit of going for hot water when I brushed my teeth, washed my hands, or did the dishes.
But then I realized I was wasting money on hot water when I didn’t need it. You might be too.
Don’t overlook your washing machine, either.
Did you know that 90% of the energy used by our washing machines goes to heating the water?
This is why manufacturers have been lowering wash temperatures to meet energy standards.
But washers and laundry detergents have improved, so you no longer have to rely on hot water to get your clothes clean.
This means there’s very little difference in wash performance if you go with cold water instead.
6 | Wasted Gym Memberships
It’s that time of the year where people start signing up for their local gym. But just a few weeks later, more than half of those people stop going.
So if you don’t go to the gym on a weekly basis then it’s probably best to cancel your membership.
7 | Sandwich Bags
Don’t sandwich bags make things easy?
But if you’re packing a lunch or storing food – it’s much cheaper in the long-term to use lunch containers instead.
8 | Shaving Cream
Did you know that cheap hair conditioner works just as good as expensive shaving creams?
This conditioner is great because the bottles are huge and they last forever. Plus, the scent is amazing.
9 | Premium Gas
Buying premium gas costs around $0.20 to $0.40 more per gallon, and it’s probably not even necessary.
Today’s car engines are made to protect themselves. So most cars run fine with regular gas.
But if you aren’t sure whether your car needs premium, then take a look at Edmund’s Premium Recommended Guide.
10 | Cable
It’s hard to pull the plug on cable. I get it.
But sticking with cable could mean you’re wasting money – especially when services like Amazon Instant Video offer many of the same movies and shows.
So if you’re making the switch, I recommend checking out Amazon Instant Video, Hulu or Netflix to see if they offer your favorites.
You’ll save a ton of money if you switch. For example, Amazon Instant Video is only $99/year. Hulu is as low as $5.99/mo.
If you don’t like it then you can switch back. But, I’ve never known anyone to go back to cable once they made the change.
11 | Movie Theater Concessions
Are you looking forward to any upcoming movies?
But let me point this out:
The average ticket cost is $8. And according to AMC’s website, a large popcorn + 2 large drinks costs $20.79.
Movie theaters actually make more money from food sales than they do from movie tickets.
Yep, that candy and soda is the biggest waste of money. You can find them much cheaper at the grocery store.
So if you’re going to see a movie, then eat beforehand or bring your own snacks.
12 | Wasted Food
Did you know that the average person throws away $2,200 worth of food each year?
Impulse shopping, lack of meal planning, and throwing away leftovers account for about 40% of wasted food in the US.
If you really want to get smart about food, then start meal prepping for the week ahead.
That way, when you have those “I don’t feel like cooking nights” – you’ll have something to eat instead of hitting up the drive-thru.
And if you really want to be smart with your money, get a FoodSaver.
Here’s the thing:
Meat and produce are the two most expensive items in the grocery store. They also go bad the quickest.
So if you use a FoodSaver to seal your food, then you can keep it fresher 5 times longer.
And you’ll be able to stock up on meat when it actually goes on sale.
13 | Extended Warranties
Extended warranties are great opportunities for wasting money.
Sure, the TV costs $650, but that warranty is costing you an 10% extra to protect it.
That’s a good deal when the alternative is paying another $650 if stops working, right?
Realistically, the TV you just bought has a very low failure rate (usually only about 2% – 4%)
So you should really be multiplying the cost of your purchase by the likelihood it will break.
14 | Lottery Tickets
Where I live, everyone and their mom plays the lottery.
Playing the lottery can be fun sometimes, but overall – it’s money going down the drain. You’re more likely to get struck by lightning twice than win the lottery.
15 | Paper & Plastic Products
Paper/Plastic plates, cups, napkins, and utensils are convenient because there’s no clean-up.
But those things add up. (And they’re terrible for the environment)
And how many times do you wipe messes with paper towels instead of a washable rang? Or use way too much toilet paper?
16 | Appetizers
Randomly enough, Forbes recently wrote an article about the biggest ripoffs from restaurants.
The top of the list?
Yep, you guessed it. Appetizers.
Some restaurants think they can charge up to $14 for a bowl of mashed avocados with some spices and call it guacamole.
So, unless you’re sharing a meal with someone, then you’ll probably end up with more food than you can eat if you order an appetizer too.
If you have leftovers, make sure to get them to go.
17 | Regular Coffee Trips
If you’re like me, your day doesn’t start until you’ve had your first sip of coffee.
But if you spend $5 each weekday on coffee – that’s $100 a month right there.
Meanwhile, making coffee at home only costs between $0.16 and $0.18 per cup.
For most of us, the realization is that our beloved coffee trips are wasting money. It’s much cheaper to just brew it at home.
So invest in a coffee maker and take advantage of free coffee at work.
Since not everyone can afford a fancy Keurig, I like the Bella Coffee Maker from Amazon. It works just as good.
18 | Vending Machines
Most places have them and it feels like they stare us down and tempt us into spending money.
But if you spend $1 each weekday, that’s $260 each year wasted on chips, sodas, or candy.
Since vending machine snacks and drinks are marked up so high, it’s smarter to just bring your own snacks instead.
19 | Nail Salons
Nail salons are great for special occasions.
But in the long-run, you can save a ton of money by doing your own gel nails at home.
Plus, Amazon has LED nail dryers that’ll cure your manicure if you do it at home.
There’s also plenty of nail sets that only cost a few bucks. You can’t beat it.
20 | In-App Purchases
It’s not that these are super expensive; they’re just a complete waste of money.
App revenue for Androids is up over 700% this year from last year. Why are people spending their money on this stuff?
Make sure to have a password on your account if anyone other than you will be using your phone.
If you have kids, then you already know that leaving them with your phone can cause major issues.
So what are you going to stop wasting money on?
Thanks for reading.