“Winning money at a casino is one of the easiest things you can ever do. The only problem is that LOSING money is just a little bit EASIER.”
Everyone says they’d like to save more money. But the truth is, most of us make a LOT of money over our lifetime… millions of dollars. Yet we all spend money on dumb things that add no value to our lives, either accidentally or unconsciously. So if we want to save more, we need to spend less!
I know I’ve spent money on things that I later regretted—fortunately, not often. When I used to do financial work face-to-face (before my alpacas and my morning farm chores), I used to think my nails had to look “professional.” Would you believe I spent $3k one year on manicures!? Ugh. Embarrassing! And while some people might feel that manicures are “totally worth” the expense, painted nails weren’t something I valued (and I doubt my clients cared a bit), so it was a waste.
Have you spent money foolishly? Here are 10 things you might want to spend LESS on.
1. Bank account fees.
Bank fees, ATM fees, statement fees and overdraft fees are dumb because they’re usually completely avoidable. And as we illustrated in our last post about the best places to put your savings, they can even drain an account down to nothing if you’re not paying attention!
Are you paying fees—paying banks to take your money? If so, eliminate them through either changing the type of account you have, adding an automatic deposit, or switching institutions. $10-$20 a month adds up, especially if you’re not receiving something of value for that money!
2. Credit card costs.
Annual fees, late fees, statement fees, interest charges are another way the financial institutions like to keep their hand in your pocket! That doesn’t mean that credit cards don’t have valid uses—for convenience, emergencies, to earn cash back or airline miles, regulate cash flow when your income or expenses vary, or to keep track of business expenses.
Pay attention to the timing of your account and pay off your balance monthly before interest is charged, if possible. If you’re paying interest on higher interest credit cards, see if you can get a better offer, or use Prosper.com or Lending Club to get a peer loan at a lower rate.
3. Cable TV / redundant home entertainment.
Cable, Netflix, HBO, Showtime, Hulu, Roku, Amazon Prime, YouTube Red… If you’re getting your money’s worth out of several of these, you’re watching too much TV!
A lot has changed with cable and streaming entertainment options these days. It’s a good time to consider—what are you currently paying for, which do you use the most, what’s redundant, and is there a better solution? Most people who leave cable never go back… so consider if it’s time for you to move on!
One of our team members loves Chromecast, a device which lets her stream anything from YouTube to her television, from movies and music to live broadcasts of news, interviews, even NASA’s eclipse coverage… with no ongoing fees. Or if you love Amazon’s two-day shipping through Amazon Prime, you might be able to eliminate one of your other entertainment subscriptions and use Amazon’s streaming options for movie nights.
Personally, I prefer to invest in books than streaming entertainment, although I am happy to watch movies with my husband.
4. Unused gym memberships.
Gym memberships are fantastic if you use them, but if you don’t, the only thing you’re “getting” for the monthly debit from your checking account is guilt for wasting money and not exercising!
Get real with yourself about what you will and won’t do. Maybe trade your gym membership in for a bike, some running shoes, or some kickboxing videos!
I don’t live close to a gym (and wouldn’t go to one anyway), but I have a space in my house where I do yoga, and I also work out a couple times a week with a trainer… virtually! So yes, I’m paying more than I would for a gym membership, but I’m receiving value and my health is absolutely worth it.
5. Bad health habits.
Spending money on habits that compromise health has to be one of the worst uses of money. A pack of 20 cigarettes can cost $6, $8, even upwards of $10 if your local taxes are high. And $10 a pack adds up to $3650 a year! And the cost of the cigarettes are just the beginning since smoking can lead to health challenges that will waste more of your money—not to mention other people’s money—through the healthcare system.
Odds are that you don’t smoke, but take an honest look at your spending and see if you are committing money to things your body could do without. Whether it’s one too many happy hour drinks, extra fries with your burger or sugary food that does you no good, you could potentially save yourself money and receive some nice dividends in the form of improved health.
6. Rush shipping.
I’m an Amazon Prime member and as we live in a rural area and do much of our shopping online, I personally love the free two-day shipping and the membership is “worth it” to me. However, for many people, rush shipping may be a waste.
Sometimes, it just takes a little planning to avoid those rush shipping fees. If you’re ordering time-sensitive gifts online, set a reminder to shop early. For items such as supplements, skin care, printer ink or other consumables that you order regularly, consider auto-ship (automatic monthly shipment) options, which also sometimes gives you product discounts.
7. Spending to save.
Don’t fall for marketing schemes that get you buy things you don’t need! “Free shipping—today only!” “Buy one, get a second half off!” “Buy three cookies, get the fourth free!” But did you really need or want that second pair of shoes, the fourth cookie, or the online purchase you weren’t even going to make until you saw the free shipping deadline was expiring?
If reigning in your spending habits is a challenge, I’ll refer you to Kate Phillips’s article, “Confessions of a (Former) Impulse Spender.” She gives tips such as establishing a “cooling off period” rather than purchasing something on the spot. (Yes, even if it’s on sale!)
8. Looking like a million dollars.
As mentioned, I used to spend as much as $3k a year on manicures that I didn’t even care about! And I’m not alone. When TheCut.com asked 21 women in New York City to confess “the dumbest thing they spend their money on,” a top response was what one called “vanity maintenance.” One woman spent “thousands” a year on her hair, nails, facials and teeth whitening, admitting, “I don’t actually think I look that much better.” Another justified “constant purchases” of expensive haircuts, manicures, leather laptop cases, and clothes by telling herself it was “basically a business expense,” then regretted it. A third woman confessed rather sadly that she spends money on “makeup, blowouts, and nail art, in huge part for the Instagram likes.” And a fourth said she got into thousands of credit card debt her first year in NYC on trendy outfits and shoes, trying to look like Carrie Bradshaw from Sex in the City.
It’s important to feel good about yourself, but the truth is that it really doesn’t cost that much to have a professional appearance if you are willing to limit your budget.
Whether you’re dropping $1000’s in Vegas or buying weekly Lottery tickets, there is a better use for your money. The odds of winning Powerball are reportedly 1 in 175,000,000 per ticket. That’s not good! The chances of losing more than you win are always excellent.
While it can be fun to scratch a lottery ticket every once in a blue moon, don’t gamble on your financial future. Save and invest instead of rolling the dice. And if you’ve lost money before on “investments” that turned out to be gambles—drop us a line, we specialize in secured alternative investments that won’t roller coaster ride with the stock market!
10. Eating out frequently.
The second theme that came up constantly in TheCut article was splurging on food and drink. $12 Designer coffees, $20 lunches, happy hour drinks and/or take out dinners ate up a huge portion of the income of several women interviewed. One woman who worked in a Midtown office confessed to spending “hundreds of dollars a month” unnecessarily. “Just bringing my own coffee, using a refillable water bottle, and packing a Tupperware for lunch could save me thousands of dollars a year. Like, literally a round trip-to-Europe-level money.”
To me, food is nothing more than energy to keep me going, and if my body didn’t require me to stop and feed myself (often with a protein shake or other no-frills snack), I wouldn’t! On the other hand, my husband has been described as a “foodie.” As a mutual friend gently warned me when we started dating, “Todd doesn’t have a food budget.” So while we don’t eat out often, I know that good food has value to Todd, and that helps me realize that he’s going to want to spend much more on it than I would, and that’s OK.
What’s something worth to you?
We don’t believe in strict budgets, but we DO believe in 3 basic principles:
- Spend less than you earn.
- Save money—consistently and automatically. (We love high cash value whole life for this purpose, as it earns much more than bank rates, offers flexibility should you need cash, and makes your savings plan “self-funded,” should anything happen to you.)
- Align your spending with your values, which will leave you satisfied with how you spend your money. (See “Spend Happy” for more on that.)
Deciding what constitutes “value” is a very personal decision. What is a waste of money to one person might be “totally worth it” for another. Obviously, it’s important to understand your own values. And if you are in a marriage or partnership, take time to understand the values of those you partner with. But the main thing to remember is… save first, then spend the rest!
What are the dumbest things you’ve spent money on? We’d love to hear from you in the comments below!
Want to align your investments with your principles and values? Learn about the 7 Principles of Prosperity and how you can use them to build wealth without Wall Street!