It is vital that you look for sources of waste in your budget. The less wasteful spending the more financially efficient you become. Some experts estimate that the average household wastes between 10% and 15% of their income each month. If you make $50,000 a year and waste 10% of your income that means that you probably spend about $416.67 each month on things you don’t need. Imagine what you could do with all that money!
Cut Wasteful Spending
So, how are you wasting some of that money? And where can you cut back? Here are 7 money wasters you can cut back on fairly easily:
Paying “Full Price”
Look for sales on items. Try to avoid paying full price. Also, remember that you can negotiate. You can ask for discounts on your bank fees, satellite/cable service, electronics, appliances and medical services. The worst result of trying to negotiate is that someone tells you no and you pay the current price. (On the flip side you could end up saving big!)
Failure to Plan Meals
One of the reasons that eating outside the home is the #1 way Americans waste money is due to poor planning. Make a meal plan and look for ways to avoid eating out or getting takeout. For busy families (aren’t we all?) there are a host of slow cooker/crock pot recipes and 30-minute meal recipes that can be used to combat a lack of time.
Pay attention to where your money is going. Make sure you keep on top of your cash flow. Not knowing how much you have can lead to overdraft fees, bounced checks, and other financial costs. If you know you’re going to need cash, get it when you cash a check, or get cash back when you use your debit card to avoid ATM withdrawal fees. Better yet, look for a financial institution that doesn’t charge ATM fees or that refunds them.
Things You Don’t Use
Are you paying top dollar for a cell plan when you don’t use very many minutes? See if a prepaid cell phone could help. Also, look over your other subscriptions and memberships. If you aren’t going to the gym or reading that magazine it’s time to cancel.
Paying for Things You Can Get for Free
Again, this requires a little planning and some creativity. Many museums have a “free day” a couple times a year. You can rent books and movies at the library for free (or for very little). Many restaurants offer “kids eat free” nights. Instead of paying for these things, get them for free.
Buying Items Separately
A single bottle of water (why are you buying bottled tap water to begin with?) or soda costs more per unit than buying in a six pack or a case. For a bonus, watch for case lot sales on non-perishables. Buying in bulk can save you.
Paying Interest Instead of Earning It
The biggest money waster out there is paying interest. You pay this for the privilege of borrowing and it goes straight into someone else’s pocket. Instead of paying interest, pay down your debt and look for ways to earn interest through savings accounts or reward checking accounts.
I’m sure you can think of several other ways to waste money.
What do you think are some of the worst things to waste money on?
Photo by jimmiehomeschoolmom.