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While many people take a passing interest in the benefits of saving as much money as possible, saving money should take up a significant portion of the attention you give to your life. Money saved and generating interest or returns earns cash you don’t have to work for.
If you’re interested in saving, here are some of the top money wasting activities you could begin addressing.
Key Takeaways
- Convenience stores and cell phone plans can eat into your savings plan.
- You should make sure you bank at an institution with no fees, or at least the lowest fees you can find.
- Magazine subscriptions can save you money on occasional purchases if you enjoy reading them.
- If you have credit cards with annual fees, you should consider getting rid of them because you will likely never use the “perks” and can do just as well with a no-fee card.
- Eating out and paying for soft drinks can increase your annual expenses, so skipping soft drinks can help you save.
1. Convenience Stores
Many people don’t consider the markup they pay for convenience store items. Here’s a hint: it’s huge. This is because, unlike grocery stores, convenience stores don’t purchase food in large quantities, and also because they make you pay more for the convenience they provide. So, unless it’s an emergency, avoid shopping at convenience stores.
The premium you pay for convenience is not worth the assumed convenience you get. For example, a bottle of Coke at a convenience store might cost you about four dollars, while you can go to Walmart and buy a 12-pack for about $7. If you tend to pull over for a drink, buy a 12-pack and keep it in your car. If you visit convenience stores often, the annual savings of cutting out these visits can be tremendous.
2. Cell Phone Plans
Take the time to check your monthly cell phone bill–you may be paying more than you need to. If you use fewer minutes than your monthly plan allows, switch to a lower-rate plan. If you use more minutes than your monthly allotment, upgrade to a higher-minute plan.
Before making any changes to your plan, sit down with a list of your cell phone company’s offerings and compare and determine which plan provides the most value based on your needs. You should also scan through your cell phone plan for added features like text messaging and mobile internet. If you aren’t really using these features, get rid of them–they’re costing you money each month!
3. Soft Drinks
This one is a sneaky money waster. Not only does ordering beverages along with a restaurant meal boost your total expenses, but soft drinks also have one of the highest markups of any restaurant item, and thus provide lower value for your money.
Consider a typical family of four that eats out twice a week at fast-casual restaurants. Assuming an average price of $1.50 for a fountain soft drink, that totals $12 a week, $48 a month, $624 a year. Just cutting out this one item from your meal could mean significant savings that could go into something much more productive, such as a retirement savings plan. If you invest $624 at a 9% rate of return year every year, you would have almost $32,000 at the end of 20 years. So dine out, but opt for water!
4. Unnecessary Bank Fees
Many people unknowingly pay a lot to their banks in the form of fees. If you don’t know what fees your accounts are subject to, spend a few minutes finding out. Some banks charge ATM fees for using another bank’s ATM, for example. These can be as high as $3! This amounts to a 15% one-time fee for a $20 withdrawal. The key with this type of fee is simply knowing about it. You would be better off using a credit card to make the purchase and paying it off at the end of the month.
Go back and examine the rules governing your checking and savings accounts. Also consider consolidating bank accounts, as often one account with a larger minimum can eliminate numerous fees that might otherwise exist.
5. Magazines
If you’re the type of person who likes to occasionally pick up your favorite magazine from the local grocery store or newsstand, consider getting an annual subscription. Even if you don’t want the magazine every month, the cost of a couple of issues at the newsstand is enough to cover the entire annual subscription.
6. Annual Credit Card Fees
Unless you have a poor credit history, there is no reason to pay annual credit card fees. A host of Visa, MasterCard and Discover cards have no annual fee, yet many people pay $100 or more a year for the privilege of holding a premium credit card. Unless you’re a wealthy holder of an elite-level credit card with exclusive perks, most people should not be paying annual credit card fees.
And speaking of credit cards, make sure you make a payment on time every month, even if it’s the minimum. Many credit cards charge high monthly late fees, charges which accrue interest along with your existing balance.
Be Proactive
Spend a couple of hours and go over these categories along with any other regular habits you may have accumulated over the years. The time will be well spent as it could mean hundreds of dollars of recurring annual savings.
How Do You Stop Spending Money Mindlessly?
Many people find success by creating a budget and tracking their expenses. Other methods are to consult an objective friend or loved one before making large purchases to avoid impulse buys, and avoid using credit.
What Are Big Money Wasters?
Food delivery via apps, subscriptions you’ve lost track of, grocery shopping without a list of needed items, and late payments on bills are some of the most common money wasters.
What Do Rich People Waste Money On?
“Wasting money” is a subjective term. One person might think someone is wasting money on one thing, while another might not. However, rich people might hire people to do things they could or should be doing themselves, buy unnecessary luxury items, and go out for expensive dining—all of which could be considered a waste of money by some.
The Bottom Line
Shopping at convenience stores, wasting money on magazines, and high credit card and bank fees are easy ways to waste money. Taking some time to go over your spending habits could be well worth your time.
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