Advertising
Advertising

20 Things You Are Wasting Money On

20 Things You Are Wasting Money On

There are most likely a good amount of items in your budget that you can probably cut out completely, or at least lower your spending on. There are some instances where you may not always be “wasting” your money, but in the cases below, you should try to evaluate your spending. A lot of these little things can add up quickly.

Here is a list of things that you may be wasting money on:

Bottled water

Bottled water can be expensive. If you want filtered water, buy a water filtering system and fill-up a re-usable bottle on your own. You are helping the environment this way as well, since you won’t be using so many plastic bottles.

Famous brand products

When was the last time that you bought something primarily because of the brand? Many people do this. Try to look for items that are similar, but without the brand name logo on it.

Jewelry

Yes, jewelry can be nice to have at times, but should you be spending your life savings on it? Probably not.

Advertising

Shoes that you do not need

Shoes are important, but are a pair of $1,000 sneakers a “need?” Buy shoes that help you run, walk, hike, look good, etc., but a crazy expensive pair is most likely just a waste of money.

Second-rate entertainment

Second-rate entertainment can be a big money waster. Try to find things to do that are more frugal and fun. Go for a hike, a bike ride, and so on.

Transportation

Do you find yourself driving to where you need to go, when you could easily walk or drive a bike? Think about this next time before you get in your car. Also, think about living closer to work so that you can save on transportation costs that way as well.

Movie theater food

Buying food at the movie theater can be very expensive. Boxes of candy may be around $4 or $5, drinks around $7, and popcorn somewhere between that. Save money and skip the food.

ATM fees

ATM fees can add up quickly. My bank charges an extra $2 or $3 onto whatever the ATM charges me. At times, that means that I have paid over $5 just to get money out. Instead, try to figure out a different way to not pay an ATM fee.

Advertising

Lottery tickets

Yes, it is nice to think about what you would do if you won all of that money, but the chance of you winning is very slim. Save that money instead.

Coffee

I know of someone who complains about never having money, yet they go to Starbucks every single day and buy a latte. It makes no sense! Save your money and make your cup of coffee at home.

Prepared foods

When at the grocery store, there are always many food items that are already prepared for you. However, try to cook yourself or make things from scratch. You can save money this way.

Insurance

Insurance is expensive, no matter what you are talking about. Car insurance, health insurance, home insurance, life insurance, etc. most likely eat up a lot of your budget. Shop around and find the best rates.

Buying books

Reading a book can be a great hobby that is cheap, but it could be cheaper. Borrow books from your library to completely cut out this expense.

Advertising

Too large of a home

How much of your house do you actually use? If your house is too big, then you probably have extra rooms that are empty, or you might buy furniture just for the sake of filling those rooms. A bigger house costs more to maintain, and utility bills are most likely higher since you have more space to heat or cool down.

Warranties

Sometimes a warranty may be a good deal, but most of the time they are not. They are usually pure money-makers for the company offering them. If you think the item will break, then you might want to rethink the purchase altogether.

Food that you don’t eat

If you are not careful with what you buy, then there is a large chance that you are wasting a lot of fun. The average family wastes around 25% of the food that they buy.

Smoking

Smoking is not good for you. Try to find a way to break this unhealthy habit. You are saving your life and your money.

Taxes

Many people think that they can do their income taxes on their own, however this isn’t always the best case. A good accountant can help you find areas where you might be able to lower your taxes.

Advertising

Water

Water can be expensive, and there are things that you can do to lower your water spending. Look into buying more efficient home products, such as a better toilet, faucet, shower head, dish washer and so on.

Cell phone

Cell phones are expensive.  Evaluate your needs and see if there is a cheaper contract out there. There are many new companies popping up all over the place with plans under $30.

What are you wasting your money on?

More by this author

Michelle S.

Founder of Making Sense of Cents, a blog about personal finance and traveling.

10 Ways To Always Be Yourself And Live Happily 6 Things Highly Effective Leaders Do Differently 30 Things You Need to Try at Least Once While You’re in Your 20s 10 Things Successful People Do Differently To Reach Their Dreams 7 Ways To Manage Emails So They Don’t Eat Up Your Time

Trending in Money

1 The Definitive Guide to Get out of Debt Fast (and Forever) 2 25 Easy Tips on How to Save Money Fast 3 What Is a Good Credit Score (And How to Get One) 4 9 Millionaire Success Habits That Will Inspire Your Life 5 10 Reasons Why Following Your Passion Is More Important Than Money

Read Next

Advertising
Advertising
Advertising

Last Updated on July 10, 2020

The Definitive Guide to Get out of Debt Fast (and Forever)

The Definitive Guide to Get out of Debt Fast (and Forever)

Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

Identifying All of Your Debts

The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

Here’s how you can get started identifying your debts:

1. Own Your Debt

Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

2. Make a Debt Tracker

It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

3. Get Your Debt Number

Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

Prioritizing Your Debts

All debt is not created equal. It’s imperative to understand that there are different types of debt.

Advertising

1. Understand Bad and Good Debts

Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

There are three main types of bad debt:

  • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
  • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
  • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

Good debt is identified as investments in your future. Here are three common types of good debt:

  • Student Loan Debt
  • Mortgage Loan
  • Business Loans

2. Decide Which Debt to Pay off First

Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

3. Don’t Pay the Minimum Amount

Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

Removing Obstacles to Pay off Debt Quickly

Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

1. Set a Reminder to Track Your Debt

“If you can’t measure it you can’t manage it.” -Peter Drucker

It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

Advertising

Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

Set weekly and monthly goals so you can have short term wins and keep the momentum going.

2. Hide Your Credit Cards

If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

3. Automate Everything

Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

4. Plan Ahead

Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

5. Live Cheaply

The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

  • Live with roommates
  • Cook dinners and prepare lunches for work instead of eating out
  • Cut cable and choose Netflix or Amazon Prime
  • Take public transit or bike to work

Finding the Lowest Interest Rates

The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

Advertising

1. Maintain a High Credit Score

Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

  • Never miss a payment
  • Don’t exceed 30% of your credit limit
  • Don’t sign up for more than one card at once
  • Limit hard inquires, like auto-loans and new credit cards
  • Monitor frequently with free credit-tracking software

2. Find Balance Transfer Offers

Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

How to Get Rid of Debt Forever

Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

1. Keep Monitoring and Adjusting

Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

2. Earn More Money

There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

Here are some examples of ways to earn more money:

Advertising

Talk to Your Boss

Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

Start a Side Hustle

This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

Build an Online Business

There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

3. Celebrate Your Wins

As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

4. Set New Financial Goals

Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

Conclusion

Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

More Tips on Getting out of Debt

Featured photo credit: Pepi Stojanovski via unsplash.com

Reference

Read Next