A core component of building wealth is spending less than you make. To aid in that goal, here’s a list of 25 things most people would be much better off not wasting their money on.
Some of the items on this list can have a big impact just on their own. For the others, they may have a lesser impact individually, but when you combine several of them and implement as a group the impact can be significant.
Avoid spending your hard-earned dollars on 25 these items:
#1. High-Interest Debt: Pay off high-interest credit card and personal loan debt as quickly as possible to avoid unnecessary interest charges. Interest rates can be over 20% on these debts, so you want to pay them off fast!
#2. Impulse Purchases: Think twice before buying something on a whim. Give yourself time to consider if it’s truly necessary. If you really need it, you can always buy it tomorrow or next week.
#3. Extended Warranties: These warranties are big money makers for retailers because they payout so little relative to their cost. Since most big-ticket items come with a manufacturer’s warranty already, additional coverage is usually unnecessary.
In addition, many credit cards include a benefit that extends the manufacturer’s warranty by 1 or 2 years, so check if your card includes this coverage. Just remember that you have to use your credit card to purchase the item in order to get the benefit of the extra coverage.
#4. Brand Names: Generic or store brands often provide similar quality at a lower price. I generally follow this rule, but I have to admit that there are some things that I’m willing to pay up for a particular brand. For example, in my opinion, Philadelphia Cream Cheese and Bick’s Pickles just can’t be beat by the store brand😊.
I think you can be selective on this one, but at the very least, make sure you’re aware of the alternatives and the differences in price.
#5. Unused Gym Memberships: Only invest in a gym membership if you’ll use it regularly. Watch out for being tempted to buy a gym membership on impulse. Only make the commitment when you’re really ready to follow through.
#6. ATM Fees: Avoid withdrawal fees by planning ahead and using your bank’s ATM, rather than a rival bank’s ATM. These fees can really add up, especially if you’re doing small withdrawals multiple times.
#7. Bottled Water: Invest in a reusable water bottle to save money on single-use bottles. This has the added benefit of being much better for the planet.
#8. Coffee Shop Coffee: I can’t blame you for wanting to make a trip to Tim’s or Starbucks. They do often provide a superior product (see #4 above), so if you can’t skip it all together why not opt for a regular coffee and skip the add-on lemon loaf? You’ll save money and a lot of unneeded calories.
PSA – a Grande Pumpkin Spice Latte has 390 calories and 50g or sugar! A slice of Iced Lemon Loaf has 430 calories and 37g of sugar! Oh my!
#9. Excessive Eating Out: Dining out frequently can drain your budget quickly. Cook at home more often and you’ll save money and most likely be eating a healthier diet.
#10. Subscriptions Overload: Evaluate your subscriptions (streaming, magazines, apps) and cancel those you don’t use regularly. If you can eliminate 2, 3, 4 or more monthly subscriptions, the savings will add up fast!
#11. Unused Gym Equipment: Don’t buy exercise equipment that will just become an expensive clothes rack. Watch out for gym equipment salespeople that talk you into buying things you won’t really use.
#12. Brand New Cars: Buying a brand-new vehicle is one of the worst financial decisions we can make. I’ve done it, and I regretted it. Consider buying a well-made used car, like a Honda or a Toyota, to avoid serious depreciation in the first few years.
Personally, I’d much rather buy a 2- or 3-year-old Honda, Toyota, Lexus, or Subaru than a brand-new Hyundai, Kia, Chevy, Ford, etc. You’ll be able to drive it for several years after you’ve paid for it, and when it comes time to move on, these vehicles sell easily and have higher residual values.
CarEdge.com has a useful tool where you can select a vehicle make and model and they’ll give you a financial assessment grade (A, B, C, or D) for the vehicle that factors in cost of ownership and residual value.
#13. Late Payment Fees: Pay bills on time to avoid late fees. If you do happen to get charged a late fee, I recommend calling up the company and asking them to waive it. They usually will if you’ve been a good customer, and this is a one-off.
#14. Fast Fashion: Invest in quality clothing that lasts longer instead of cheap, disposable fashion. This is another win for the planet. I recommend checking out Winners and Marshalls for good quality clothing at sharply reduced prices.
#15. Impulsive Online Shopping: Avoid shopping online when you’re bored or stressed. Studies have shown that people can get an emotional lift from shopping, but it never lasts.
#16. Excessive Data Plans: Evaluate your mobile data usage and choose an appropriate plan. Make sure you’re not paying for more than you really need. Also, check around with the various wireless data providers periodically. You can often get a better deal by switching, and you can almost always port over your current phone number making the switch mostly painless.
#17. Convenience Store Snacks: Surprise! Snacks and drinks are often marked up significantly at convenience stores.
#18. Trendy Electronics: Wait for prices to drop on the latest gadgets instead of paying a premium. Or, in the case of cell phones, avoid the model that just came out and opt for the prior (or 2 prior) model. These days the newer models are only incrementally better, and you’ll still be able upgrade to the latest operating system.
#19. Brand New Textbooks: Consider buying used or renting textbooks for college or university. Checkout GetTextbooks.ca, Valore.com, and Amazon.ca for used textbooks. Yes! Amazon sells used textbooks!
#20. Storage Unit Fees: Evaluate whether the cost of a storage unit is worth the value of the items being stored. These storage units can be quite costly, so ask yourself “why are you really keeping this stuff?” Often there’s an emotional reason for not letting go of old stuff, but wouldn’t it feel better to let someone else get some use out of these items?
#21 Overpriced Insurance: Shop around for insurance policies to ensure you’re getting the best rates. Rates for home and auto insurance, and even life insurance, can vary significantly by insurance company so be sure to shop around.
Checkout Rates.ca for home & auto insurance quotes, and Policy Advisor for term life insurance quotes.
#22. Unused Electronics Accessories: Be selective about buying accessories like phone cases, screen protectors, or charging cables that you won’t use.
#23. Premium Cable TV Packages: Consider cutting down on cable TV packages or switching to more affordable streaming services.
#24. Premium Gasoline: Unless your car specifically requires it, using regular gasoline can save you money without affecting performance.
#25. Unnecessary Beauty Products: Evaluate your skincare and beauty product collection and avoid purchasing items you rarely use.
And as a special bonus:
#26. Lottery Tickets: It’s been said that lottery tickets are a tax on people who can’t do math – don’t fall into this trap! Spending money regularly on lottery tickets is unlikely to result in a significant return on investment.
The bottom line.
Spending less than you make is critical to building wealth over time. Effective money management requires prioritizing your spending and making conscious choices about where your money goes. Avoiding wasteful spending on the items mentioned above can free up funds for more important financial goals.
Love the reference to Philadelphia cream cheese and Bick’s pickles but with many things, if you don’t tell them it’s the generic store brand, they won’t know even notice!
Very true! In those cases it definitely makes sense to go with the store brand.
Thanks for your comment!