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Could we be wasting money? You might wrongly consider yourself a frugal saver, but unfortunately, some of the best earners wind up throwing away money simply by going about their everyday activities. To obtain greater financial security without getting a second job, it would do us well to watch what we spend. Here are a few ways we may be wasting money without realizing it:
How To Waste Money in 9 Easy Steps
Remember that these are money drains and actions you should avoid making if you’re interested in saving money.
1. Only buy brand new vehicles. When you buy a new vehicle, you are taking a loss as soon as you leave the showroom with your shiny purchase. A gently used vehicle with a warranty is a better investment. Before buying, check the history of the vehicle through Carfax. It costs $34.99 for the service and you can check up to 10 vehicles to find the best one for your needs.
2. Use your charge cards for everything and always carry a balance. Pay off the balance of your credit cards every month so you never carry a balance. Why pay interest if you don’t have to? Use cash instead of credit cards whenever possible. Only use credit cards for major purchases when you want the reassurance of backup from the credit card company or to earn rewards for money spent. I’d also consider applying for balance transfer credit cards to try to pare down credit card debt at a quicker pace.
3. Pay whatever fees the bank charges you because they’re the boss. With the abundance of no minimum balance and free online high yield savings accounts, it’s foolish to be paying outrageous bank fees. Take control of your money. Shop around for free accounts so you never waste money on these unnecessary fees every month.
4. Pay the fee to use that ATM in a questionable back alley bar. Using an ATM anywhere you feel like it can be a convenience but it’ll cost you. So instead, plan your money requirements. Make planned stops at your bank branch to make ATM withdrawals so you never have to pay a fee. Use your free ATM bank card as a debit card rather than as a credit card when you make purchases in order to avoid incurring extra fees such as cash advance charges. Paying ATM fees is another foolish waste of hard-earned cash.
5. Keep your money in a non-interest bearing account. Review savings account rates and try to find the best cd rates available for your hard-earned money. Why not park your money in a two-week or one-month CD rather than let it sit around collecting nothing? For a little extra effort, you can put your money to work for you. It doesn’t make sense to let your cash sit around for a month earning no interest when you can invest in a short-term CD.
6. Avoid dollar stores like the plague. You’ll save a lot more money by swallowing a little of your pride. If you think you look cheap entering a dollar store, think again! Shopping in the dollar store shows you’re a savvy saver. Everyday purchases such as sponges, cleansers, soaps and paper goods are cheaper than buying at your local grocery store. Other smart purchases at dollar stores include greeting cards, party goods and holiday decorations.
7. Buy only name-brand products. As an alternative to branded products, generic alternatives are an easy way to save money on cereal, canned goods, puddings, applesauce, trash bags, spices and an array of everyday products. Save up to a dollar or more per purchase by simply buying generic products. Brand loyalty can cost you quite a bit more and often it’s a similar product in fancier packaging.
8. Live on take-out food. Take-out food and dinners out can get costly and unhealthy but eating on the run doesn’t mean spending three times more on food with double the calories. Choose healthy alternatives such as fresh vegetables, lean meats and potatoes. Grill them or toss them in a wok for a fast, tasty dish for a fraction of the cost. Have oatmeal or yogurt for breakfast and bring a bagged lunch. You’ll also feel better, maintain a good weight and have fewer visits to the doctor when you stop eating convenience foods all the time.
9. Leave lights on and appliances plugged in. You’ll be surprised by how much you’ll save on energy by turning off lights when you leave the room or your home. Make sure your appliances are unplugged when you’re out for extended periods of time. With rising utility costs, nobody can afford to waste electricity. Use energy efficient light bulbs to further cut down on your electrical bills.
As you can see, it’s not all that difficult to identify areas where we can potentially cut costs and save. In many cases, small adjustments can lead to huge savings; if you’ve got the resolve, you’ll be able to plug those holes you may have in your budget and find better use for the dollars you do end up saving!
Wasting Money Discussion:
What other personal finance practices have you found to be a big waste of money?
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