If you are earning a decent amount of money every month but still find it difficult to save or even stick to your budget, then you are probably wasting money. This means that aside from your essentials, you are spending your income on other irrelevant expenses that are taking a toll on your finances.
There are things you should never waste your money on. If it’s not improving your financial situation, boosting your health, or helping your overall well-being, don’t splurge your money on it.
This post will discuss the common ways people waste money without knowing. From buying fancy clothes to paying for unused subscriptions, your money might be going down the drain if you aren’t careful. Perhaps you’d be able to identify your mistakes using the information here and adjust immediately.
What Are The Biggest Money Wasters?
There are numerous things you should never waste your money on. But based on several case studies and practical real-life stories, lottery tickets and fast food are among the biggest money wasters. The sad thing is that these things could become a habit, making it very difficult for you to stop wasting your money.
How Do You Know If You’re Wasting Money?
Impulse buying is one of the most common signs that you are wasting money. The moment you open your refrigerator and realize that you bought food items you don’t like or often eat, it means you’ve wasted your money by making impulse purchases.
How To Stop Wasting Money
You can’t solve a problem until you’ve identified the problem and its source. Hence, the first step to stop wasting money is to figure out where your money goes. You can check your bank statements, credit card history, and other financial documents to identify any money wasters. As soon as you identify the things that often waste your money, you have to cut them out totally.
Now this won’t be easy. For example, eating out is one way people spend money unnecessarily. For someone who’s already used to the lifestyle of eating in restaurants and buying takeouts, it would be difficult to break such a habit. Notwithstanding, you have to decide to protect your income by avoiding these money wasters.
Another effective method to help you stop wasting money is budgeting. This is why everyone is supposed to know how to build a monthly budget. Budgeting your salary every month will help you focus on your essentials; preventing reckless spending. As long as you stick to your budget throughout the month, you won’t incur any irrelevant expenses that would waste your money.
15 Things You Should Never Waste Your Money On
1. Lottery Tickets
If you think you will one day get rich from playing the lottery, you might be delusional. Don’t get me wrong. People have become millionaires through the lottery. However, the odds are never in your favor. You might play the lottery for decades without winning. This makes it a big money waster.
All those extra dollars you spend on lottery tickets can be invested or simply kept in a high-yield savings account. Aside from being one of the worst things to spend money on, playing the lottery is sometimes considered an irresponsible act. It’s almost the same thing as gambling in casinos.
2. Late Fees
Late fees remain one of the useless things to stop wasting money on. Making late payments on your credit card, rent, and utility bill attracts extra fees as a penalty for paying late.
You may not have a lot of money in your checking account, but failing to pay on time makes your financial situation worse. You would keep spending more money whether you like it or not. This is why I always recommend setting up automatic payments for all your bills.
Even if you forget to pay a bill on time, you have nothing to worry about. Automated payments are always on time, preventing late fees.
3. Bank Fees
Bank fees are one of the things to stop wasting your money on. Although most people believe bank fees are unavoidable, that was in the past. As of today, there are reputable banks that now allow you to carry out all of your transactions without paying any bank fees.
For example, Ally Bank and Chime are currently among the popular options that don’t charge fees. People have been using Ally for several years without complaining about any bank fee, even for overdrafts.
4. Expensive Clothes
Just because something is expensive doesn’t mean it’s durable and of high quality. When it comes to choosing the right clothing, learn to ignore all the trends and buzz that come with it.
Go for affordable clothes with quality fabric and color. This means you might want to avoid buying clothing items online. It’s always difficult to tell how much quality a t-shirt has when all you have to look at is a well-edited picture on Instagram. Walk into a retail store and purchase your clothes in person. That way, you can examine the quality and even negotiate the price.
By the way, if you need tips on how to dress and look classy without breaking the bank, check out these 10 tips on how to look expensive on a budget.
5. Extended Warranties
Extended warranties are one of the things you don’t need to spend money on. It’s very common to see retailers pushing hard to sell extended warranties to customers, especially on Black Fridays.
Here’s the truth about an extended warranty. Sometimes, it costs as much to replace the item. What does this tell you? Instead of paying that extra money for an extended warranty you may never use, save it somewhere.
If the item you buy becomes defective in the future, you can repair it or purchase a new one using the money you had stashed somewhere initially.
6. Luxury Apartment
Except you are a millionaire with liquid cash and assets, you don’t need to live in a luxury apartment. That’s one of the things to never spend money on. Jeremy Gregg, the executive director of PLAN Fund, says it’s a big financial mistake to blow most of your income on rent.
Ideally, you are supposed to spend less than one-third of your income on housing. If you have to move into a smaller apartment, there’s no shame in that. It’s much better to live in a less fancy house than have debt hanging over your head.
7. Expensive Phones
Not all smartphones are expensive, especially if you choose not to use an iPhone. A phone that costs less than $300 can still do all the basic things that a $1,000 smartphone promises.
More importantly, the amount of money you spend every month on data is determined by the type of phone you use. It’s easier to upsell you to a higher data plan when you use a fancy phone. To cut down costs drastically, you can even cut your landline at home if you don’t use it.
8. Fast Food
This is one of the things you should never do with your money. Do you prepare your own meals at home, or do you prefer to eat fast food? Feeding yourself at a fast food restaurant on a daily basis would only puncture a hole in your wallet. It’s simply a waste of money.
Also, fast food is not always healthy. They can contain certain ingredients that your body doesn’t need. For example, you can’t control how much fat or sugar you take in when you constantly eat out. That’s something you can easily control when you get used to making your own food at home.
9. Piecemeal Insurance
Piecemeal insurance policies are one of the things you should never waste your money on. If you want to spend your money wisely, you shouldn’t buy overpriced insurance for things like accidental death and disease. You might be blowing your funds for nothing. I’ve seen people who only had accidental life insurance that didn’t help much when they died of natural causes.
Getting good term life insurance and disability insurance is the best decision to make.
10. Gifts Nobody Needs
Are you fond of gifting your loved ones items on special occasions? While this is a beautiful habit, it should be done with discretion. You wouldn’t want to spend your hard-earned money on something no one would appreciate. Hence, think twice before buying your mom another dress this Christmas.
If you are compelled to give out something, then maybe you should make it more impactful. What I’m saying is that you could agree with your folks to take a percentage of the money you were supposed to spend on gifts and then give it to someone who truly needs it.
11. Brand New Car
A lot of people don’t think new cars are one of the things you should never waste your money on. I’ve seen middle-class folks who are obsessed with driving new cars even when they are unable to afford them. Bear in mind that brand-new cars are for people who are comfortable with a lavish lifestyle.
If you want to manage your income and pursue your savings goals, fairly used cars are the only options you have. Besides, these fairly used vehicles are not a bad choice. They can be affordable and may serve you for decades before you think about getting another one.
12. Co-Signing A Loan
You may wonder why I included this in one of the things you should never waste money on. Co-signing a loan for a friend have some financial risks that you must consider carefully.
If your friend faces a major financial challenge, such as a job loss, you would be responsible for the loan. If you fail to pay off the loan, your credit score will be seriously affected. This is why I don’t think it’s worth the risk.
If your friend needs to take a loan and asks you to co-sign, the best you can do is lend them some amount of money from your personal pocket.
13. Weight Loss Traps
There are so many weight loss pills often marketed, promising to help you achieve your dream body and whatnot. The problem with these pills and supplements is that they don’t usually bring the results you expect. You can use these products for several months or years without noticing a remarkable change in your body. This makes it one of the things you should never waste your money on.
Mind you; these weight loss pills can have serious side effects on your health after using them for a prolonged period of time. There are so many other healthy ways to lose weight. Avoid weight-loss traps.
14. Food You’d Eventually Waste
The average family of four in the US wastes around $1,500 in food every year. Can you withdraw $1,500 from your checking account and just dump it in the trash can? Of course, you can’t do that. But interestingly, many households throw out that amount of money each year through food waste.
Planning your meals and buying the things you need can prevent food waste. Always buy groceries using a shopping list. To save costs on your purchases, you can also shop at discount grocery stores such as Trader Joe’s and Aldi.
15. Money Leaks
Another way to avoid things you should never waste your money on is by fixing your money leaks. Money leaks are recurring expenses that you pay for but don’t use. A perfect example of this are unused subscriptions on Netflix and Hulu.
Sometimes people also spend money on gym memberships even though they rarely visit the gym. It’s a waste of money to keep paying for services you don’t use. It’s like literally flushing your money down the toilet bowl.
Examine your recurring expenses today and cut out anything you don’t use.
Final Thoughts On Things You Should Never Waste Your Money On
This post certainly didn’t include all the things you should never waste your money on, but this is a great place to start.
By avoiding all the expenses mentioned above, you can drastically save money without compromising the quality of your current lifestyle. Begin by ditching unnecessary expenses like bank fees and non-essential purchases such as lottery tickets, designer clothes, and expensive rent.
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