How We Waste Money

Surprising Ways You Waste Money

By Mike Peterson
In November 22, 2016

You may consider yourself somewhat frugal: You don’t spend piles of cash on fancy vacations, new cars, or luxury items. You aren’t house poor. You don’t buy lottery tickets and you’ve curbed your Starbucks addiction. You try to eat at home most nights a week. But somehow, you still end up with less money than you’d like at the end of each month.

What gives? 

Chances are good that you’re overspending in ways that you aren’t even aware of. While it’s easy to notice when you’re blowing your budget on luxury items and extravagant extras – but it’s a lot harder to notice smaller, under-the-radar money wasters. A few extra dollars here and there can start to add up, especially if you’re not paying attention.

Wondering where your extra cash is going? Check out this list of sneaky and surprising reasons you may be wasting money:

  1. “Free” shipping. How many times have you thrown an extra item or two into your shopping cart just to score “free” shipping from your favorite online retailer? And how many times did you actually need those extra items? There’s nothing wrong with getting free shipping for buying items that you actually need and were planning to buy anyway – but when you start tacking on an extra $15 or $20 to every online purchase, the costs quickly start to outweigh the benefits.
  2. Wasted food. If you read this blog regularly, you know that I’m a big believer in cooking at home instead of spending money on takeout or restaurant dinners. And while it’s true that cooking at home is typically cheaper than dining out, it’s also true that Americans waste around 35 million tons of food per year. In dollars, that’s $165 billion per year — or $2,000 per household[1]. That’s a lot of wasted money. You can cut the waste and save money by making a shopping list, planning your household meals, and freezing leftovers.
  3. Ordering food online. As I just mentioned, restaurant food tends to be more expensive than food you make at home – but it’s even worse if you order your takeout or delivery meals online, versus dining in or ordering by phone. Research suggests that we order more food when we don’t have to talk to someone. Why? It’s a social thing: When we have to tell another person what we want to eat, we order slightly healthier items or smaller portions. It’s a lot easier to add unhealthy items and super-sized quantities when you don’t feel like you’re being judged. And speaking of felling judged . . .
  4. Adding “distraction” items to hide embarrassing purchases. Yes, it’s slightly embarrassing to buy athletes’ foot medication or clinical-strength anti-dandruff shampoo, and I totally understand the urge to load up on other, less-embarrassing items as a means of distraction. But is it really worth it to add $30 worth of random items to your cart, just so the teenager behind the register doesn’t judge you?
  5. Shopping for anything when you’re hungry. Everyone knows you buy more when you go to the grocery store hungry – but did you know that hungry people tend to overspend on non-food items, too? A good rule of thumb is to stay far away from any kind of stores if you’re feeling peckish.
  6. Avoiding crowds. If you’ve ever tried to claw your way through a big box store on Black Friday, you know that shopping at peak times can be a pretty miserable experience. But there’s a surprising benefit to shopping when everyone else does: You don’t spend as much money. You get in, get what you need, and get out. You’re far less likely to linger, and less lingering means less spending. On the other hand, stores that are less crowded and hectic make you feel like you can take your time and browse – which can often lead to buying more stuff you don’t need.
  7. Bundles and “price creep.” These are common with service- or subscription-related purchases like cell phones and landlines; cable; or streaming video services. Bundles supposedly save you money by packaging two or three related services into a single bill at a slightly reduced price – but if the bundle includes items you don’t need or won’t use, you’re not really saving money. And bundle or not, you should be on the lookout for price creep, where service providers gradually increase your bill, sometimes a few dollars at a time. These small increases don’t seem like much at the time, but, like everything else, they add up over time.

Did any of these surprise you? How many of these surprise money-wasters sounded familiar to you? And remember, if you need debt advice or have questions about debt, credit, or credit cards, you reach out to Debt Guru.  Contact the Debt Guru team today for a free debt relief consultation.

[1] Source: http://www.cnbc.com/2015/04/22/americas-165-billion-food-waste-problem.html

Mike Peterson

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.