Stop Wasting Money
Wasting money is not something the average American wants to do. But as consumers and prey to materialism, it’s the easiest to do when you don’t pay attention. Previously, I mentioned the first step to get out of debt is to save $1000 as fast as you can. In order to save, you’ll need to examine your spending habits and stop all unnecessary spending.
“I’ve already gotten rid of a lot”
Get rid of more.
This means that you need to dig down into your finances and find all the money sucking culprits to eliminate them.
Most things that are wasting money are obvious while others may not be.
I’ve put a list of the most common ways that people waste their money. Start by cutting out these expenses and see how much you can save. $7 here and there can REALLY add up and turn into and pretty good chunk of change to throw into that emergency fund so you can start slaying that debt.
15 Ways You Are Wasting Money
Interest is one of the biggest money guzzlers out there. If you have a credit card, student loan, personal loan, auto loan, or mortgage then you are paying interest. According to Experian, Americans held an average balance of $5,551 per credit card. Let’s say you have an $5,551 balance on your credit card and your APR is 13%. If you pay a minimum payment of $125 then it will take you 5.3 years and an extra $2,252 to pay it off. You’ve just thrown away $2.2K!! Let that sink in. The sad part is, it’s normal to have loans and debt and it’s “normal” for us to buy things we can’t afford. But don’t be normal. Stop wasting money.
What you can do: Don’t use your credit card from now on. Hide it. Pay for things with cash. Save up for things you can’t afford right now and stop trying to keep up with the Jones’s.
Use this calculator to determine how much interest you will pay on your loans.
#2. Your morning Cup of Joe
Luckily, I’m not a coffee drinker. But if you are, then do this: add up how much you pay for coffee every day at Starbucks or Dunkin Donuts. Let’s say the average cup of coffee is about $4 and you stop every morning (5 days per week). That’s $20 per week, or $80 per month, or $1,040 per year! How’d you like to put that towards your emergency fund?
What you can do: If you are dependent on coffee, consider making your own. If not, try dropping the coffee altogether and use other sources of energy like bananas, berries, vitamin B12 and ginseng.
#3. ATM fees
ATM fees can range from $2.50-$4.00 depending on your location. If you regularly take money out from an ATM then it’s just like throwing $4 in the trash!
What you can do: Take out money directly from your bank, use your own bank’s ATM machines, or get cash back at the grocery store when you anticipate needing cash.
#4. Gym membership
How many of you have a gym membership that you pay for but never use? Or you went at the beginning of the year as part of your New Year’s Resolution but have now stopped going? The average gym membership costs $58.
What you can do: Save yourself the wasteful spending and cancel it. There are many free and cheaper options if you workout at home. Find some DVDs on yard sale pages or rent them from your local library for much cheaper options. I watch YouTube videos currently and it’s much nicer and convenient.
There are so many reasons to stop buying “cancer sticks”, but I’ll stick to the financial aspect for now. Cigarettes cost $5.51 per pack (the national average). If you smoke a pack a day, then you throw away $170 per month, or $2k per year.
What you can do: Ditch the cig. Period.
Occasional drinking won’t break the bank but if you drink a bottle of wine a day or a 6-pack of beer a day, it could be really putting a dent in your bank account.
What you can do: start by drinking one glass/can less per day per week until you’ve weaned yourself from drinking so much. Consider joining an AA meeting. Find a community who struggles with excessive drinking to cut down.
#7. Eating out
This is still my nemesis! I really don’t like cooking and I really want to like it, for my family’s sake and my budgets sake. Going to throw some real numbers at you here. I work 3 nights per week, and on average, I stop at a fast food place at least once per week. I typically spend an average of $8 for food before work. Then I eat from our cafeteria for about $7 about 2 nights per week. That’s $15-22 per night that I don’t bring lunch, $22 per week, and $88 per month!! I challenge you to see how much you waste on fast food per month.
What you can do: Meal plan, meal plan, meal plan. Pack your lunch for work. Utilize leftovers.
#8. Name brand makeup, facial care
I’m not a makeup girl. So I don’t know the struggle to get the latest MAC or Kylie Jenner’s line. While I try to make an effort to be conscious of what I put on my skin, I also don’t spend and arm and a leg for it. A few years ago, I was at the mall and was persuaded to try this new line of product, Gold something or other. Me and my friend did a mini spa and it felt great. They made it all sound so good. So I bought it. $100 for a jar of cleanser and moisturizer. I normally just use water so it ended up going to waste. $100 down the trash. Ugh! You can get just a good results with off brand and natural choices for much cheaper.
What you can do: Look for sales or try making your own cleanser and moisturizer for a fraction of the cost. Or if you are really frugal like me, don’t wear a lot of makeup. Do you really need foundation, a concealer, a highlighter, a bronzer, an eyebrow liner, 100 eye shadows, blush, and all the different brushes?
#9. Monthly pedicures and manicures
A typical mani-pedi can range from about $40-60. That’s $40-$60 that your savings can grow. I recently met a woman at the playground and I noticed she had perfectly manicured nails and toes, you know the fake or gel kind. I asked her how often she has them done. She told me that she goes in every two weeks for a touch up and every 8 weeks for them to be redone. She felt it to be a necessity so her nails won’t be damaged. What?! Here was this woman, brainwashed to think that she has to spend hundreds of dollars each month to protect her nails? It’s not a necessity, it’s a luxury.
What you can do: Try doing it yourself instead, or save it for special occasions.
#10. Unused data packages
Examine your data usage each month and determine how much you are actually using. My husband and I had a 4GB plan. I rarely make it to 1GB and we consistently stay under 3GB so I decided to decrease our plan to 3GB per month. I saved $8/mo by doing this. on the flip side, if you are constantly going over your data package, you risk paying a penalty fee of about $15 for an extra GB. Keen in on the amount that you currently use and stick to it.
What you can do: See how much you can save by just using what you already do. Or better yet, try to cut down on the data you are using. Limit yourself to WiFi spots only. You can also see if combining family plans and split the costs will lower your bill.
The average cable/satellite bill costs $70-200 depending on packages you have. That’s a whopping savings you can throw at your emergency fund.
What you can do: Try Netflix, Hulu, Roku, and Amazon Prime to watch all your shows instead. Opt for an antennae and get all the basic shows. Many millenials are starting to ditch the cord and I wish I could say the same. I just cannot convince my husband to go for it. He is an avid television watcher and needs his sports television.
#12. Overdraft fees
Here’s a scenario: Jessie sets some of her bills to automatic payments but always forgets which date they go through. She needs to put gas so she does. Little does she know that the automatic payment already went through and the gas she just bought has just sent her into the negatives in her bank account. On top of that, the bank charges her $25 for each time she overdraws on her account. How unfortunate is that? Don’t be Jessie.
What you can do: Get into a habit of tracking your spending and monitoring your bank account everyday. Or at the very least, once per week. I open my account every day to every other day. I do this for two reasons: To track my spending and make sure that my automatic payments go through and to monitor for any fraudulent activity. See if your bank has a mobile banking app and login every now and then to track your account and spending.
#13. Bank fees
When I graduated college, I banked with Compass Bank. Compass bank had fees charged if you didn’t meet requirements. I believe Chase has something similar. 1. have direct deposit totalling $500 each month or 2. have a daily balance of $1,500 or more or 3. carry a daily beginning balance of $5,000 with linked accounts or a $12 penalty will be charged. Not everyone has direct deposit which can make it difficult to avoid these fees.
What you can do: I switched to a credit union and avoided these fees.
#14. Wasting food
How many times have you bought something, forgot about it, then find it later in the back of fridge, rotten. Yuk! Tell me I’m not the only one who does this. Bread, bananas, and green produce tend to be the top things we end up throwing out before we eat them and the average cost of wastage per month is about $5-7.
What you can do: Meal plan and stick to it. When you have a plan, then you only buy exactly what you need. Learn to freeze. Did you know you can freeze bread and bananas? Take advantage of things you can freeze now to eat later and they last much longer.
#15. Lottery tickets
Did you know the average consumer spends $206.69 on lottery tickets per year?
What you can do: Stop gambling. If you have an addiction, seek help on the National Hotline at 1-800-522-4700. If you invested that $17 into a stable return at 7%, you’d be up $50,342 in 42 years!
What do you think is your worst money wasting habit? How much can you save by not wasting money? Let me know in the comments.