Are you wasting your money? Here are some of the biggest wastes of money that you should be avoiding!
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Everybody spends discretionary money, but there are a lot of people who may not realize just how much their discretionary spending adds up and how little benefit they actually get from some of these money wasters.
GOING OUT TO EAT
Going out to restaurants can be a great experience to treat yourself or others to a nice meal and atmosphere, however, eating out can be extremely pricey.
Restaurant food prices are typically marked up around 300% from their wholesale costs, and this gets passed on right to you.
Not to mention that this doesn’t even cover the expense of being waited on, so the additional 20% suggested tip is added on top of the already pricey food. And the genius of this is that it tricks us into thinking the price on the menu is the price we will be paying.
The average American spends $3,000 to $4,000 on restaurants every year and the prices only seem to be going up.
It just makes more economical sense to save the money by cooking the meals yourself as the end price will be significantly cheaper, the time to cook your meal would likely be the same amount of time as going to a restaurant, and you can meal prep or have leftovers that would make other meals in the week much easier.
BUYING NEW CARS
Buying a car is typically the second most expensive item someone buys, right behind a house and the price of new cars keeps increasing. The average price of a new car in the US is about $37,000.
What is alarming about this is that the average US individual income is about $40,000 so people are buying cars way out of their budget. Not only are these cars particularly expensive, but new cars see the most depreciation with a loss of about 60% of its value in the first 5 years.
It just doesn’t make sense to buy new especially since you’ll also likely finance the car and pay interest on your underwater asset.
My recommendation is to buy a reliable used car as you will save tens of thousands of dollars in the long run.
ORDERING DRINKS
Drinks by far are the most marked-up item in any establishment, whether you are buying coffee, alcohol, or soda. Drinks are commonly marked up around 300% to 500%.
Drinks prices can often sneak up on you since many drinks are not very filling and over time can add up to quite a lot of money.
If you’re going to drink anything other than water, it really makes the most sense to drink your other beverages at home – it is far cheaper.
TRYING TO IMPRESS OTHERS
Whether it’s a big house, fancy car, jewelry, designer clothes - whatever it is, if you’re spending money to impress others, you are wasting it.
There is definitely a benefit to having nice things, particularly in a social setting, but if you’re living your life in debt or are struggling to pay bills in order to appear wealthy, this is not a healthy lifestyle choice.
My recommendation is to stick to a budget and try to find deals when you can. Otherwise, if you don’t need an expensive item, don’t buy it as most people don’t really care anyway.
CREDIT CARD DEBT
With the average credit card debt at around $6,000, this can be a major expense and a big waste of money.
Credit card interest rates on average are around 18% but it is very common that these interest rates creep up to 25% and even higher. Using 25% as our base, that is about $125 per month in interest.
Paying off your credit cards and only spending within your budget will save you a lot of money in the long run, plus it will boost your credit score as an added bonus.
Those are my top 5 biggest money wasters – if you avoid these as much possible, you will be sure to save a lot of money!
