5 Stupid Ways People Waste Money

Posted on Dec 21 2016 - 12:18pm by Liz E.

Being frugal is hard. There is constant pressure to spend money and more and more things in our consumerist society, and it can be easy for people to quickly lose track of where their money is actually going. I’ve been there, and I’m sure you have too. But it doesn’t have to be that way. If you are conscious of what you’re doing, you can quickly turn it around and you’ll be amazed how easy it is to get your money back under control.

While we’re all in different situations with different expenses, these five things are what I tend to see people (myself included) wasting the most money on and, to a one, they are almost all unnecessary.  Read on below, and see how many of these you do.

1. Eating out

Going out to eat can be a lot of fun, but it should be a treat instead of a way of life. I know people who go out for lunch every day and sometimes for dinner too, and you’d be amazed at how much you can save by instead brown-bagging your lunch and cooking at home. That isn’t to say you should never go out, but that it should be a couple times a month at the most.

Still don’t believe me it’s that much of an expense? Let’s look at the math. For example, when I go out for lunch it’s usually around $8, with tax, depending on where I go. That’s one meal, and that’s pretty cheap eating—we’re talking not quick food I can grab on my 30 minute lunch. If I eat out every day during the week, that amounts to $40 per week. And that’s just lunch—dinner is going to cost me half again as much if I go out.

Now, compare that to buying the ingredients to make a lunch—say $4 for lunch meat, $1 for bread, $3 for chips, $4 for a bag of apples—and I’ve spent $12 on roughly two weeks worth of lunches, not including the days where I can take leftovers from dinner. See the difference? It’s really just common sense.

2. Buying brand names

Whether you’re talking clothing or food, brand names are ridiculously expensive over the generic things and, especially where most foods are concerned, there’s not actually that much difference. Sure, there are some foods where the generic brand tastes simply gross (mac and cheese is definitely one of those) but with things like ketchup and canned corn, there’s not really a difference. I mean, corn is corn whether it’s $3 or $1.50.

One of the main arguments I hear is that people “trust” name brands and that a few cents is worth it. But, realistically, companies are in it to make profit so the chances that the $3 corn company spends that extra money on growing better corn are pretty small. Instead, that money is probably going to advertisements and marketing so that people will buy more corn. And those few cents might not seem like much, but if you save a few cents on everything, it adds up quickly.

3. Upgrading Technology Yearly

From computers to smartphones, tablets, smartwatches, and the newest little gizmo or gadget, technology is both a lot of fun and really expensive. It seems like no matter where you turn, there is some new electronic toy that you need because it’s new and shiny. But, really, what people forget is that we don’t need that brand new laptop or the latest iPhone. You need food on your table, and last year’s iPhone will work just fine for at least another couple of years. Don’t let it suck you in! If you’re a huge tech nerd like I am, then your best bet is to save up and buy a nice piece of tech that will last you four or five years (or more) and just be content with it.

4. Paying late fees

It continually amazes me how anyone can afford late fees. I realize that some late fees aren’t really all that much, and that occasionally it’s unavoidable, but I know people who budget in the late fees as if it’s obligatory, without even realizing how much extra money they’re spending simply because they didn’t budget properly. Fees, including late fees and overdraft charges, are avoidable expenses and should never be budgeted as part of the expense. Chances are, if you can afford to pay $20 in late fees on half your bills, your problem isn’t not having enough money—it’s not budgeting properly. Instead, take a close look at when each bill is due and out of which check you could pay it to make it on time, then shuffle money around accordingly.

5. Not knowing where your money is going

This is the biggest one that I see. When you’re trying to be frugal to get out of debt, save a bit of money, or even just live more within your means, it’s important to know where every cent is going. Sure, it might be a bit time consuming at first, but eventually it will become second nature and will definitely help you make sure that you are getting the absolute most out of your money.

For a month, try saving every receipt, writing what category it fell into (food, going out, bills, just for fun, etc) and then going back through at the end of the month and tallying exactly how much you’re spending where. You’d be amazed how quickly everything adds up, and from there you’ll easily be able to see where you are making money mistakes.

So, have you made any of these mistakes? How do you see people wasting money? Tell me in the comments below!

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