How To Avoid Wasting Money – Whether you love it or hate it, money is an important part of life. However, no matter how important money is to adults, education rarely teaches us how to manage it.
Knowing this, I decided to create this article about the different ways you can waste money. I know I’m guilty of many of them, and I’m sure you are too.
How To Avoid Wasting Money
Instead of just focusing on what we are doing wrong, however, I will also look at how to correct these bad behaviors.
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Usually, a few tweaks to your behavior and routine is all it takes to spend less money.
Just like in my article on wasting time, I want to make it clear that cheating is a matter of context. Personal finance, after all, is personal. It’s up to you how you spend your money, and I’m not here to tell you that your spending is “wrong”.
But if you feel like you’re wasting money, it’s important to be clear about what that means. I define wasted money as spending money that is forgotten or doesn’t add value to your life.
Again, this is individual and situation specific. For example, it is a waste for a beginner guitarist to spend $2,000 on an instrument when a $500 model is more than worth it. But for a professional guitarist who uses their instrument to make money, the $2,000 guitar purchase makes sense.
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With that in mind, here are some ways you could be wasting money (and how you can do it).
It seems like everything these days requires a monthly or yearly subscription. The phenomenon is so pervasive that there is even a word for it: subscription creep.
If you’re not careful, it’s easy to spend hundreds of years on services you don’t use.
Fortunately, this is one of the easiest wastes of money to fix. All you need to do is:
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If manually reviewing your bank and credit card statements sounds like too much work, there are even services that will find and delete unused statements for you. Check out Truebill if you’re interested.
Note: I usually refer to software and other digital subscriptions. But this category also includes personal subscriptions such as gym memberships that are not used.
If you currently eat out (or order takeout) for most of your meals, then you have a huge opportunity to save money.
Let’s start with eating out. Restaurants have to mark up the price of their food to have any hope of paying their bills (and even then, the margins are razor thin).
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Also, you will show your server that you are a decent person (if you can’t pay well, you can’t afford to eat in a restaurant). All of this adds up to a little more than you would pay for food you cook yourself.
Food delivery is even worse for your wallet. Many restaurants increase the price of their products via delivery to account for the additional headaches and service costs that delivery apps charge. And on your end, there is a shipping cost and instructions for your supplier.
Of course, sometimes it’s good to eat out at a restaurant or order in on a lazy Sunday. The key to financial health is to make these things you do all the time, not just for every meal. I know this very well since I used to carry out a lot.
What changed? I decided to cook at home my life first. I’ll still eat out during the session, and I let myself order groceries around once a week. But otherwise, I cook all my food at home.
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If you spend more money than you want to eat out, I suggest you try to do the same. Just make sure you have some delicious food, or the temptation to order out will be hard to resist.
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Today, you can buy anything with a few taps or swipes on your phone. Although this is the best of today’s technology, sometimes it can be very convenient. Before you know it, those little impulsive buys are here and can add up to hundreds a month.
First, I recommend limiting the number of shopping apps you have on your phone. For example, I’ve found that the extra friction of opening Amazon’s website is enough to keep me from buying junk I don’t need.
Also, I recommend making a list of things you want to buy online. Every time you think of something to buy, add it to the list. Then, review the list after 30 days. Most of the time, you will find that you completely forget all the seemingly “important” purchases of the past.
If these ideas aren’t enough, consider cutting off your access to store websites and apps altogether. You can use an app like Freedom to block Amazon, Target, Wayfair, or any other e-commerce site/app that tempts you.
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If you often find yourself throwing away uneaten food, then you have a great opportunity to save money. I know I can do better: before I sat down to write this article, I threw out a peach that had been sitting in my fridge for weeks.
Throwing away uneaten food is obviously an environmental problem, but it’s also a huge waste of money. You just throw the money in the trash. Fortunately, it is an easy problem to fix.
This is easily the biggest waste of money on this list. You should never, ever pay credit card interest. If you find yourself in this position, you are spending more money than you can afford.
How much does credit card interest add to your life? Indeed, it subtracts value. It’s a permanent drain on your financial resources, limiting what you can spend your money on each month.
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Getting out of credit card debt is difficult. But it is possible. Check out our guide to credit card payments for more information.
Going out to dinner or drinks with friends is fun, but it can get expensive. I know, because I said yes to every discussion I could find. But as I got older, I started thinking more about what events I did and didn’t attend. In the process, I saved quite a bit of money.
I think the root of this waste of money is FOMO. It’s easy to think you’ll regret not going out, thinking about all the cool conversations and fun times you missed. But if you don’t hear it, it’s good to say no. You must respect your time; don’t let others decide how you use it.
Also, I want to mention one type of relationship that is more common in your late 20s and early 30s: weddings.
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Saying no to someone’s wedding is hard…at least at first. But after you’ve been to more than one hand, you start to realize how expensive it can get. Especially if the wedding is in a distant place.
Just remember that, unless that person is a very good friend or family member, they will not suffer if you miss their wedding. And even then, a true friend or loving family member will understand.
The next idea is from Martin, our web designer and project manager. You may end up wasting money on things that you think you will use eventually (but don’t actually use). We call these “just in case” purchases.
“After deciding for a long time that I am a video game player, I just decided before everything else. It took me a long time to realize that I am not a person who plays a lot of games anymore , which allowed me to change that attitude.”
Five Tips To Avoid Wasting Money
All “just in case” purchases are a waste of money because they are in response to a future need or need.
Instead, try to make “just in time” purchases. Buy when you need, when you plan to use immediately. Put everything on a list for future review. As with impulse purchases, you’ll probably forget about them with time.
Note: Some “just in case” purchases are valuable. For example, you may not need to use fire extinguishers in your cabinet, but you will be happy if you do.
No one is immune to the invisible, of course. But if you’re shopping regularly to keep up with the Joneses, you need to make some changes.
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For example, do you want a new iPhone? Or do you buy it because it will impress your techy friends? Do you like eating oysters? Or do you buy them to be beautiful in front of your day?
Conspicuous eating is a big part of our culture; the temptation is always there. But next time you talk about it
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