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I Can’t Believe How Much These Small Purchases Are Costing Me Every Year

I Can’t Believe How Much These Small Purchases Are Costing Me Every Year

Have you ever stopped to add up all of the tiny, seemingly inconsequential expenses that we accumulate daily, weekly, or monthly? A few dollars here, a few dollars there add up to big bucks at the end of the year. You will be shocked at how much those unnecessary expenditures are leaching out of your wallet.

1. Make mine a grande.

Your Starbucks habit may be costing you big time. I paid $4.59 for my last Grande latte (Cinnamon Dolce is my favorite). At that price, five days a week, you’d be spending nearly $100 per month, or $1193.40 per year at Starbucks. And that’s just the coffee; throw in a muffin a few times per week and you’re looking at $1500 per year.

What this could buy: With that amount of money, you could buy a new laptop or some living room furniture or maybe a cruise for two.

2. Roll that money up and smoke it.

If you’re still one of the smokers among us, you might as well just roll your money up and smoke it. Though the cost of your cigarette habit will vary by location, from around $5 in Kentucky to $14 in New York, any way you look at it, it quickly adds up. With the average smoker in the US consuming just under a pack a day, you’re spending around $50 per week—that’s $2600 per year. Want to kick the habit? Here are some great tips.

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What you could buy: That would pay for a family vacation. Disney anyone? Or maybe you’re more of a big screen with surround sound and gaming type. You could outfit a family room nicely—every year.

3. The salon habit.

Love that straight, smooth look? If you go to your salon for weekly blow out, at an average of $25 a pop, you’re spending $1300 a year. If you’re a Brazilian blow out consumer, those will set you back another $800 a year. Is smooth hair worth that much to you? Maybe. Maybe not.

What you could buy: You could spend that money on a massage every other week instead or some really fabulous outfits or a bunch of great shoes.

4. Watch those pesky bank fees.

Are you still paying a monthly maintenance fee? Better check your statement. There are so many free checking accounts without fees; it’s foolish to pay that $12 per month when you don’t have to. Also, did you know that most banks now charge a “statement fee” to mail your monthly statements? It’s usually only $2 or so, but that adds up. Get it via email and it’s free. How often do you hit the ATM? According to recent statistics, the average ATM user will hit an ATM 8 times a month. If that ATM is not at your personal bank or if you get cash back at the grocery store, you’ll pay an average of $3 per transaction.

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Some banks charge $5–7 for replacement card and shockingly a few banks are now starting to charge for a “human teller” service. Seriously, $8 to deal with a live person. Even without counting the ridiculous human teller fee, you could be paying more than $500 a year in completely avoidable fees.

What you could buy: With that $500, I could buy a gym membership or maybe better a few stocks and a session with a financial planner.

5. Take another look at that cell phone plan.

According to some recent studies, as many as 80% of cell phone users are overpaying on their plans, especially smart phone users. That’s crazy. Check your usage over a few months. You may be able to downgrade your voice minutes, or you may be paying for voice or data overages. Either way, you’ll save money by “right-sizing” your plan.

You may be surprised by how much you can save by getting an unlimited minute plan or by switching carriers. Smartphone users are overpaying an average of $10–20 per month according to the studies, and if you have several smartphones in your household, it’s even more. That’s $200–500 a year.

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What you could buy: That extra $200 could buy a nice shiny new device or something really cool, like an activity tracker or GPS watch.

6. Keep your hands off the merchandise.

According to a Harris Interactive Poll, the average American spends $200 a month on impulse buys, the biggest offenders being clothes and shoes, toys, technology and checkout counter items. These frivolous purchases are most often triggered by sales, discounts, pacifying children’s wants and convenient placement by retailers. If it’s on sale, but you didn’t need it, then did it really save you anything?

Shopping online can help avoid checkout line temptation, but the instant gratification can cost you even more. The lesson? Stick to your list, wait until the next trip, or impose a 24–hour waiting period. Ask yourself if the $2400 a year is truly worth the payoff.

What you could buy: Instead of shoes you don’t need, another cute sweater, yet another device to add to your collection, more toys to clean around or junk food that adds pounds, perhaps you’d rather buy a comfy new mattress, a new kitchen table, or a terrific stereo. Or you could pay off the credit card bill for last year’s impulse buys.

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7. A dollar and a dream.

We are lottery-hungry here in America, more so than any other country in the world. And while the average American spends about $200 a year on lottery tickets, $4 per week, the poorest Americans spend nearly $12 a week, totaling more than $600 yearly. Since your odds of winning the lottery are somewhere between 175,000,000 and 200,000,000 to 1, it really is a terrible waste of money. In fact, your odds of being struck by lightning, having identical quadruplets, or being killed by a flesh eating bacteria are more likely.

What you could buy: While $200 doesn’t buy much, it does buy some dinners out, a designer bag, a new suit, or a great dress.

8. Brown bag it.

A recent survey cited that 70% of American workers go out to lunch at least twice a week and spend an average of $10 a pop, coming in at around $1000 a year. And for those who go out every day, that number comes in at $2600 each year. I don’t know about you, but I’ll be brown bagging it.

What you could buy: With the money you’ll save by packing your lunch, you could buy a brand new refrigerator full of food. You could use the extra money to buy organic or if you prefer to invest it in yourself, take a professional development course or college course.

However your money is leaking out of your wallet each month, you might want to consider how else you could be spending it. At least be conscious of where your money is going. And something else to consider: if you reclaimed even $100 per month and invested it, even conservatively, you would accumulate nearly $40,000 over the next 20 years and that number would double each decade.

Featured photo credit: Money – Savings via flickr.com

More by this author

Royale Scuderi

A creative strategist, consultant and writer who specializes in cultivating human potential for happiness, health and fulfillment.

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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