We all waste money. Sometimes it’s on that fancy new trinket that we just had to have, and other times its on things that we think are reasonable. As you know, I’m not in the never enjoy anything ever crowd, so you won’t see me saying that you’re wasting money on lattes and dinner out every now and then (though if it’s every day, you might want to cut back). But there are other huge wastes of money out there, and ways to enjoy life without wasting that much. Here’s my list of the biggest wastes of money ever!
Huge Wastes of Money
What is the Biggest Waste of Money?
The biggest waste of money is something that will cost you upwards of one hundred thousand dollars over the course of your lifetime (if not more!). I’m pretty sure you all already know what it is.
Funny that as a college grad, college is the top thing on my list. I don’t really think college is a huge waste of money (Did I get you though?). I think everyone should pursue some type of college education, and that it’s elitist that only the richest among us are able to afford it nowadays.
But with that being said, there are some aspects of college that are huge wastes of money. If you aren’t really sure what you want to be studying or don’t have the GPA for a scholarship, out-of-state and private schools are a huge waste of money. The University of Illinois is just as good as the University of Florida (and better with some programs!), and both are just as good as some of the private schools in those states – if not better.
There is one reason that these out-of-state and private schools may not be a huge waste of money – and that’s the rating of their program. The University of Illinois has one of the best engineering schools in the country. If it’s been your dream forever to be an awesome engineer, then maybe you should consider it. However, most states do have at least one school with a decent enough program in anything that choosing the in-state public option shouldn’t have a detrimental effect on your career prospects.
One other way we waste money trying to pursue education is with those online non-accredited colleges, commonly called “for-profit schools”. Everyone I know who has tried to enroll in one of those has said the same -it’s a huge waste of money. Go to a community college for your starter credits instead. Most legitimate universities offer online study programs as well.
What Things are Huge Wastes of Money?
I know, I’m beating a dead horse here. Most of us know that colleges, especially out-of-state and private schools, are huge wastes of money. You didn’t come here to hear that. You came here to see what things are a huge waste of money.
New cars are also easy pickens’. Pretty much every finance article you’ve ever read in your life tells you how much of a waste of money they are, right?
Well, there’s a reason for that. New cars are a waste of money. First, there’s the depreciation. As soon as you drive it off the lot, it loses value. But if you absolutely need a new (or a new-to-you car), I won’t begrudge anyone in choosing a new option. Yes, it’s more expensive than a used car, but you can be sure that it’s going to last for a few years and most come with some type of warranty. That piece of mind is important.
What’s really a waste of money though is buying a new car every few years. My parents did this when I was little. Sometimes they were brand new, and sometimes they were used, but I can barely remember an occasion where it was a necessity. Most of the time, they were just tired of whatever they were driving, or they saw an ad for something different and had to have it. I can remember 9 or 10 different cars from my childhood off the top of my head, and I’m sure there were more. Talk about a huge waste of money.
Instead, buy a new car and drive it until you can’t anymore. Conduct proper maintenance to keep it in prime condition. I’ve had my car since 2012 and it’s been paid off for a few years. She has over 125,000 miles. I plan to keep her for at least 75,000 more, and longer if I can!
I’m not going to say that you should be using an old Nokia flip phone. I agree that smartphones are the present, and most people need one to do all the things they need to do in a modern world (apply for jobs, keep in contact with clients, stay in touch with friends, keep up with the happenings, etc.). However, what you don’t need is the latest model of I-phone or Samsung as soon as it comes out.
Phones are basically the new cars. People stay in debt paying off their phones because it just gets rolled into their monthly cost and they don’t see how much they are actually spending. Instead, keep your old one until it doesn’t do everything you need it to do. Get insurance on it so you can replace it cheaply if it breaks. Don’t buy into the hype that you need the latest model, which does basically everything that your old phone did. It’s not worth it.
Shopping can be cathartic. That’s why the term retail therapy was invented! When you’re feeling sad, buying something new is a great way to cheer yourself up. But it’s also expensive, and usually a waste of money.
Would you have bought those things if you weren’t sad? Did you really need them? How much happiness did they really bring you? My guess is that you wouldn’t have, you didn’t, and the happiness was fleeting. Am I right?
Instead of buying all the things when you are sad, try window shopping. It gets you out of the house and engaged (which I think is the thing that actually helps you feel better) and it’s better for your wallet. If you find something you think you really want, put it aside and come back for it the next day. Odds are it will still be there, and you can feel good about avoiding an impulse purchase. You can think of your retail therapy outing as a planning trip for the next time you need to go out and buy things.
Stuff You Don’t Really Want or Need
Buying stuff you don’t really want is right up there with retail therapy. But sometimes we do it on impulse when we aren’t even sad.
I do this when I’m hungry. We went to the gas station after work the other day, and I bought all the food. I even bought this nasty-looking gas station chocolate cake. Who would want that? Not me – it’s still sitting on the counter untouched. I Have no idea why I thought buying it was a good idea.
This can apply to almost anything. Although I love Target, and they have tons of stuff I want, they are great at getting you to buy the stuff you don’t really want. Then, you get home and wonder how you spent a hundred bucks at Target when you just went in for a new dish towel. Did you really want all that extra stuff?
The same rule can apply here that applies to retail therapy. If it’s not on your list, don’t get it. If you really think you want it, snap a photo of it and come back for it later. Chances are, you will realize that you don’t really want or need it, and won’t end up going back. But it will still be there if it goes the other way! Don’t let fear of missing out on that item manipulate you into making an impulse buy.
What Extras are Huge Wastes of Money?
Companies are always trying to find ways to part you from your hard-earned money. There are two things they do that, in my opinion, are huge wastes of money. Try to avoid these if you can!
So many companies make bank off of subscriptions that people don’t really want or hardly use. Gym memberships are a great example of this. I won’t say they are a waste of money if you use them, but how many people do you think have gym memberships and never go? I’m one of them right now. I keep telling myself that I will go to the gym next week, but it hasn’t happened yet.
But it’s not just the gym. There are tons of other companies that try to get you with subscription fees. They make it so easy to sign up, but then you have to jump through a thousand hoops in order to cancel. Most of these companies will try to entice you with a free month – all you have to do is give them your credit card! Of course, there’s no option on their website to cancel, you have to wait on hold for 12 hours to talk to the right customer service person. They do this on purpose to discourage you from canceling. I’ve seen this with food delivery services, background check services, and even magazine subscriptions.
The thing is, these companies aren’t scams. They really do provide you with the service as described. If you get value from the service, it isn’t a waste of money. But if you don’t, and are only keeping it because it’s too much of a hassle to quit, then it’s a huge waste of money. Take a few hours to get out of them.
Use an app like Trim to help you save money on subscriptions. This app analyzes your spending and helps you find ways to save. It helps lower your phone and utility bills, and helps you figure out which subscriptions you should be canceling. Get it and start saving today!
I think extended warranties are a scam. They are a way for a retailer to make extra money off the sale of an appliance of some type. They try to scare you into buying it by telling you that you are out of luck if it breaks after however long, but really, most products are made to last longer than the extended warranty. And, most manufacturers’ warranties will cover anything that goes wrong.
I’ve even had someone try to sell me an extended warranty on something as silly as a Blu-Ray player. The thing only costs sixty bucks, and they wanted me to pay an extra twenty for an extended warranty. No thanks, I’m good.
What Experiences are Huge Wastes of Money?
It’s hard for me to label experiences as a waste of money. Doing things is what life is all about! But, there are some things that, in my opinion, aren’t really worthwhile.
I’m not advocating that you don’t go out and spend any money ever. We all need to blow off some steam every now and again! But a night out drinking can cost you. Bars and Clubs are notoriously overpriced. If you want to enjoy time out with your friends, you can pregame at home and limit yourself to one or two while you are out. You could also offer to be the designated driver – that way you get to hang out with all your friends without spending needlessly, and you’re hailed a hero for making sure everyone gets home safe. That’s a huge win for your bank account!
Things You Don’t Really Want to Do
Some experiences are crazy expensive, and if your heart isn’t into it, then why bother? Let’s say, for example, that you hate roller coasters. Going to a theme park dedicated to roller coasters would probably be a waste of money for you. The same goes for vacations that you aren’t really into, movies you don’t want to see, and anything else.
Sometimes, we want to go do things because our friends are going. And I get that, you want to be social and you want to hang out with your friends. But if you hate all things horror, why would you go to a haunted house with your friends? Sit that one out, save the money, and plan the next adventure. Fear of missing out is real, but when you sit down and realize that you’d be miserable tagging along, or that it’s not in your budget because you’d be much happier doing something else, you realize that you aren’t really missing much.
Don’t spend your money doing something you don’t want to do just because everyone else is doing it. And you don’t even have to make an excuse. Say something like “that really isn’t my thing, but I hope you have a blast!” and leave it at that. Then spend your money on something that you actually want to do.
But don’t use this post as an excuse to not do something for your close family that is important to them. You should absolutely do things that you might not be thrilled to do if your partner, child, or best friend really wants to. They’d do the same for you. It’s all about compromise and using your best judgment.
I know it’s important to go to weddings and celebrate the love of people you care about. But sometimes, that can get pricey. If it’s a destination wedding, or if you’re being expected to give more than you can afford, then maybe it’s best to attend. Only you can decide if you are close enough to the couple, and they are being reasonable enough, to make it worthwhile. There’s nothing wrong with saying you can’t go if it’s not in your price range.
Speaking of weddings, some of them really are a huge waste of money. The average cost for a wedding has soared to over thirty thousand dollars! Average!! What do you get out of that?
Sure, everyone wants a big party and a perfect wedding, but there are ways to keep the costs down. I’ve never been married so I don’t know what those ways are, but check out the Budget Savvy Bride – a blog dedicated to saving money on weddings.
How Else Do We Waste Money?
I would be remiss, as a finance blogger, if I didn’t mention the two big ways people waste money as it relates to financial management. Those are paying any type of fee or penalty and paying interest on debt. And most of us do one of those things at some point in our lives.
Fees and Penalties
Late fees, overdraft fees, and account maintenance fees. These things really add up to make financial institutions millions of dollars. And that money is coming out of our pockets.
It’s easy to say just pay your bills on time, and make sure you don’t overdraft your account. And if you are forgetful or just bad at managing money, that’s solid advice. Set up a payment calendar, and turn off the option to overdraft.
But, many people are stuck living paycheck to paycheck, and can’t pay on time, or need the ability to overdraft in order to feed themselves until the next paycheck. There’s not much advice that I can give folks in this boat. We need systematic change to help them. In the meantime, check out my post on what to do if you have nothing and how to save money on groceries to try to reduce your costs. Maybe some advice in those posts will help you stretch your paycheck a tiny bit to avoid some of these fees.
Interest on Debt
I saved the best for last. Everyone knows that interest on debt is a huge waste of money. This is especially true of consumer debt such as credit cards and store cards. They carry interest rates of up to 28%! That’s insane.
But, even though we know how much of a waste it is, tons of people still carry it. Heck, I have about 10K in credit card debt as we speak! Credit cards can be a lifesaver!
The important thing is to start paying them off as soon as you are able. This means paying more than the minimum every month. I’ve been paying five hundred dollars more than the minimum every month, and hopefully, I’ll be able to put more towards it in the coming months. I don’t need those crazy balances! It’s the biggest waste of money in my life right now.
What Do You Waste Money on?
Take a look at your budget and your spending. Are there any items on there that are huge wastes of money? Tell me about them in the comments, and let’s find ways to cut back together!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.