9 Ways You’re Wasting Your Money
Do you ever find yourself wondering where all your hard earned money went?
It seems like the bills can’t wait to escape your wallet.
It’s tricky to identify and keep track of all the small things in our busy lives that slowly but surely thin out your billfold. Sometimes the purchases we make seem important, useful and even indispensable at the moment. Unfortunately, this is not always the case.
Indeed our spending habits do all sorts of harm, from mild inconveniences, to real threats, to affecting our health and well-being. Luckily, it’s easy to put yourself on the path to health and wealth by identifying where you’re wasting money and how you can fix it.
1. Your house Let’s start with the big things that have a major impact on your life, such as your house. Your house, apartment, or condo is a major expense item in your budget and as such should be your number one priority when looking to save money.
So what is it you can do to save money on your home? Well, take a look at all the expenses that go into your home – your hydro and electricity bills. You can cut down on utilities by installing energy and water efficient appliances. There are major savings to be found here, in fact, the folks at Energy Star who certify appliances say that you can save up to 33% on your energy bill if you follow their recommendations.
2. Credit cards Chances are, your house is partially mortgaged and some of your purchases are done on loan. Credit cards can be very useful tools to buy the items you need but can very quickly accumulate interest.
The average American household owes some $15,270 in credit card debt. 39% of Americans carry debt forward from month to month. This can result in difficulties with paying for medical emergencies, unemployment cushion, and post-secondary fees for your kids, just to name a few. If you find you are often unable to make the entire monthly payment on your credit card, it might be a sign that you need to look at your expenses and make some changes to your habits.
3. Coffee Simply opting to buy one cup less can do wonders.
Don’t get me wrong, coffee tastes great and you need it to get yourself going in the morning, but that extra one you downed on break was most likely unnecessary. Cutting down on coffee will save you hundreds of dollars a year as well as reduce your risk of anxiety, restlessness, and depression, which are all side effects of caffeine.
4. Lunch As you move throughout the day, inevitably you will get hungry. You probably have a favourite restaurant you love to eat at. Although you can get a quick and easy lunch for as little at $10, this is good for neither your health nor your wallet.
Ten dollars a day works out to $2600 a year on lunch alone, not to mention that fast food is high in fats, calories and preservatives. You’re much better off preparing a homemade lunch to take with you. One nifty trick you can use is to refrigerate your leftovers from dinner and pack them for lunch the next day.
5. Bottled water Furthermore, you can buy a reusable water bottle and fill it up from the tap. A plastic bottle of water can cost $2 – that’s $520 a year. Without a reusable bottle and tap water, you’re definitely doing your wallet a disservice, not to mention the environment. Don’t worry – tap water is every bit as good as bottled water.
6. Warranties So you’ve probably been shopping for your new energy efficient appliances and eco-friendly water bottle. Hold right there! Are you pulling out your credit card to pay? If so, I hope you didn’t pay for the extended warranty on that new Whirlpool. Warranties are a great idea, especially when you are buying an expensive product that you expect to last a long time. However, according to a report by Consumer Reports, most products do not break within the time covered by the normal warranty. Therefore, it makes no sense to pay extra for coverage you’re not likely to ever need.
Some food for thought: the same report says retailers keep at least 50% of the extra fee they charge you for that warranty, so make sure to bargain around with the salespeople for a better deal.
7. Cable boxes By now you’re at home and reaching for the remote to catch up on the day’s news and your favourite TV shows. Let me guess, you have 700 channels available with the Verizon or Rogers premium cable box that sits on your set. Let me guess again, you’re also probably paying for it. Enjoy your channels, but know that as with warranties, cable boxes are something you can get for less if you haggle a little with your provider.
8. Taxes It’s that time of year again: time to do your taxes. And luckily, you have a bit more income to report this year thanks to all your nifty money saving tricks you’re using. But the problem with reporting more income is having to pay more taxes.
It’s very easy – look into the various refunds and deductions available from the IRS/CRA and see which ones you qualify for. It’s hardly possible for you to know the tax code inside out so there will most likely be a few that you missed and obviously were not informed about by the government.
9. Alcohol After a long and hard day doing your taxes, you decide to go out with a few friends – grab a few drinks, maybe smoke a cigarette or two if that’s your thing. After all, you can afford it now with all your savings piling up.
Not so fast! Wouldn’t it be pointless to have saved so much money only to blow it on drinks? As little at $50 a week on alcohol adds up to $2600 a year. It can be fun (and definitely tempting!) to drink and you should definitely be able to enjoy yourself without pinching every penny, but do keep in mind that reducing your alcohol consumption even a small amount will save you loads of money and provide innumerable health benefits such as reduced risk of heart, liver and kidney disease.
At the end of the day, if you need to buy something, go ahead and buy it. You cannot live your life filled with worry and guilt for every penny. In fact, this is likely to make you unhappy and frustrated. Instead, focus on small and achievable goals and before you know it, you’ll find yourself a master saver.
Alex Kvaskov
Alex Kvaskov put together his first newspaper with tape and glue when he was eight years old. Discovering his passion for reading and writing at an early age, Alex decided to pursue his interests full time. His first step was getting published in his university newspaper and he is working on becoming an editor at the paper. Alex is currently a Content Development Intern at Goddess Connections.
Elizabeth Ching
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Coffee is definitely a big one. I used to work at a coffee shop and the price for a cup can go up to 5 bucks. Some regulars would come every single day, and I would constantly be wondering where all their money came from.
Alex Kvaskov
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I always wondered how folks with tuition debts are able to afford concert tickets and daily coffee! It’s just so easy to spend money without realizing it which I think is the aspect most people have trouble with.
Teraya Smith
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I agree. People have become so attached to swiping their credit and debit cards on anything form coffee to concerts they don’t even realize all the money that’s going down the drain. One trick I learned on keeping track of your money and saving was from a friend. She spent only $20 a week and saved thousands in no time! If we just learn how to budget ourselves we’ll have the money we need for the important things.
Destiny Giakatis
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I think the biggest problem is people do not know how to budget their money. It should be something they learn however they will spend outside of their means and not realize until their statement comes in. You don’t have to save every penny however you should be aware of how much you make and where that money goes. Prioritizing your money can go a long way and can help you appreciate what you do end up spending your money on.
TaylorBrown46
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I think the problem is that it’s so easy to put the “pain” of dealing with money problems off! You may not have the money but you may buy something because you crave the instant gratification of having it, so you buy it now, deal with the bill later!
Olivia Mainville
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Agree with you both here. People need instant gratification these days, and this usually involves spending. It all comes down to personal choices. “Do I need this right now?” “Can I afford this right now?” “Should I bother to learn more about budgeting?” Like I said earlier, the importance of these personal choices need to be addressed as early in life as possible.
Olivia Mainville
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Lessons as valuable as this should be engrained into high school students (and even younger) to reduce debt before it even starts. Kids need to be taught the value of money and the difficulties in making it last if you’re not careful!