With Black Friday and Cyber Monday in our midst, it seems an appropriate time to discuss some of the most common ways that people waste money. Are you one of those people that is constantly rationalizing an extra $5-$10 on a purchase or monthly bill with the thought “it is such a miniscule amount, it’s nothing”? Well, guess what folks – those little extras add up to a whole lot of cash annually, which most of us can use come the holiday season – which incidently, is right now. So read these examples carefully, and if they apply to you, help yourself out by recognizing the error of your ways, and end the costly habit!
Buying Brand-Name Items. You can achieve significant savings by purchasing generic, or store-label off brand items. This applies to prescription drugs, clothing items, and groceries in particular. In fact, a recent survey completed by the Private Label Manufacturers Association of supermarket prices on 25 commonly purchased items found that shoppers could save more than 35% by buying the retailer’s brand instead of the national brand – a savings of $32.93 a week for the average shopper.
Going Out for Lunch or Dinner. Besides being usually a much healthier choice, packing your lunch and taking the extra time to make a home cooked meal make a big difference in the monthly food budget – especially when you follow the advice above while grocery shopping. You can easily make or eat your food at home for less than half of what restaurants will charge.
Not Paying Off Your Credit Card Balance Each Month. With credit card interest rates escalating in some cases over 20%, you can’t afford to carry a balance for long. Do without a few non-necessary items each month and pay off the balance(s).
Electric Bills. Amazingly, most people don’t realize that there are so many ways to conserve energy that cost little to nothing. Whether it is your winter heating bill, or overall energy saving tactics, you can really cut your electric bill with simple changes (read this article for a list of these items).
Not Taking Advantage of Free or Discounted Items and Services. Do you buy books to read and rent videos from a video store? Both are free at the local library. Do you ever use coupons? When it is time for a haircut, or a meal out, you will be amazed just by doing an internet search how many coupons you can find for something you need. Read this article for some great coupon tips.
Buying New Instead of Used Items. There are certain items that you pay a significant premium for when new, and the value of the item plummets the moment you walk out of the store. Cars are one of the primary items that experience this instant depreciation. Large appliances such as refrigerators and washer/dryers can be purchased second hand usually at huge savings, and many last for years. Other “gently used” items that you can save big on are sports or exercise equipment (how many folks buy these items new and then their resolve to exercise evaporates shortly thereafter?). Use craigslist or ebay to find used items locally and save huge!
Banking or ATM Fees. With a little advance planning, you can avoid the charges for withdrawing money from non-network ATMs. The $1-$3 charges can add up quickly, and are unnecessary drains on your pocketbook.
Avoiding Deals Available at the Dollar Store. If you’ve never tried browsing through your local dollar or 99 cent store, you are missing out on some excellent buys. But not everything there is a good deal, you must compare the price with the size of the packaging to ensure it is indeed a bargain. Party supplies, greeting cards, and cleaning supplies are some examples of items that nearly always are a great deal at the dollar store.
Withholding too Much Income Tax. Are you one of those people that gets a huge tax refund every year and feel proud of yourself for doing so? Consider this; having that extra money each month, and investing it wisely, could bring you significant returns on the money (as opposed to letting Uncle Sam use it all year and get the interest). Adjust your withholding level properly!
Clean Up Your Act. Do you spend money on cigarettes, booze, junk food or tanning beds? All these vices are unhealthy for your body, not to mention unnecessary expenditures. Calculate what you spend a month on these items – you may be amazed at how much you could save.
Readers, do you have any other money-wasting tips to add to the list? If so, share them with others by leaving a comment!
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Althought this article seems so simple, it is amazing how many people spend more money than they realize. One of the things we do with our clients is to give them a small notepad and encourage them to make a note of every time they spend money. Although it might seem tedious, we have had good feedback from those who follow through as they are more aware of how fast the money passes through their hands.