As a personal finance reader, most of the time you have read various ways to save and earn more money. Sometimes it helps to know various different ways to lose your money too.
The secret of saving lies more in how much you can save rather than on how much you can make. Knowing things that can qualify as ‘losing money’ can help you seal the leak.
Do you really need these?
Paying for gym membership
Buying penny stocks
Buying lotto/lottery tickets
Buying dresses every week or every month
Having daily coffee shot at Starbucks or other coffee joints
Paying for week-end shopping spree
Paying for magazine subscription if that magazine is not improving your life style or increasing earning potential
Using car for short distance travel
Not using comparison websites for car, hotel and flight reservation
Not paying off full credit card balance every month
Paying govt. using credit card, since they always charge service charge for credit cards
Charging your loans on credit card
Preparing shopping list after searching coupons and discounts, rather than the opposite
Paying for fraudulent charges by not properly scrutinizing bills
Drawing check before checking bank balance
Buying software when alternative is available for free (ex. MS Office)
Buying electronics from brick and mortar stores, rather than from online discount stores
Not bargaining enough to reduce cost
Going after brand name when better and cheaper variety is available
Drinking Bottled water when tap water is available
Using vending machines for light snacks or drinks
Buying expensive gas when a regular 87 octane grade is sufficient
Not using cash back/reward credit card, if you are a credit card user
Paying membership fees on credit cards
Investing in stock futures and options, unless you are a pro.
Hiring tax experts when you can self file for free
Smoking cigarette
Paying for Viagra
Not asking doctors for generic alternatives
Buying Computer maintainance service (ex. Geek squad)
Having home phone when everyone at home uses cell phone
Not using thermostat at home
Paying for text messaging plan
Movie subscription
Paying fees for banking privileges
Going for shopping multiple days in a week as opposed to one day
Not having enough insurance coverage
Paying with check (they cost money to re order) as opposed to online payment for free
Give in to your kid’s demands
keeping money in 0% interest account or in cash, inflation eats your money
Not looking for cheaper car insurance
Drinking alcohol
Visiting pubs and clubs
Not refinancing mortgage to cheaper rate
Not buying store brands and going for well known named brand
Buying greeting cards
Not using yearly free medical, eye and dental checkups that comes with insurance
Shopping at airport
Shopping In-flight
Paying for small repairs at home/car if you can fix yourself
Using cheaper utensils, in long run they cost more money than quality utensils
Buying things from gas station (convenience stores)
Spending on expensive hobbies
Not driving a car till its dead
Day trading in stocks if you are not a pro
Giving to a charity while you have no clue on how they spend
Driving recklessly
Not filing tax on time
Not disposing documents and old computer safely
Paying for energy drink
Not using chargeable batteries
Letting water run at home
Paying brokerage for frequent stock/fund trading
Frequent movie theater trips
Paying for things which can be self-taught
Hiring a prostitute
Paying for guided tour
Eating out too often
Buying season ticket of your favorite team
Using overnight delivery
Spending on chewing gums
Spending in Casino
Buying junk jewelery
Paying hefty tips at restaurants
Throwing too many parties
Betting and/or racing
Not taking good care of your health
Buying every new games or music albums
Falling inn to Online scams
Installing softwares from un-trusted sites and thus revealing few passwords to hackers
Every rule has its exception. Likewise, all the above points will have their own limitation too and in certain situation, some of these might look like wise expenses to incur, although, I can’t think of a situation when hiring a prostitute can be considered a genuine expense.
This list is prepared for a reader who is among general healthy population with average income (USA national average) but, your mileage may vary.
I will not object to any criticism and will try to respond if you write your concerns in form of a comment. On contrary, if you know of 80 other ways to lose money, do share with me.
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The problem with personal finances and lists such as this is that it is all subjective. Each person will have a different viewpoint on various issues and bullet points, and most will be perfectly valid (although I would have to agree on the prostitute point). Like with filing taxes late, many situations demand that a return go on extension such as when investing in MLPs or other ventures that need to make adjustments before the K-1s are sent out. Some things like the casinos, throwing parties, eating out, and drinking alcohol are more social in nature or simply things that people enjoy. I mean, if someone stuck to every single thing that was on this list, they may never get out of the house or see other people in a social setting (yeah, I’m being a little extreme, but just to make a point). I think people simply need to prioritize better. Like many of the responses to the post on Beating Broke the other day about being “unfrugal” sometimes, there needs to be a balance in life where you get to actually enjoy and spend the money you work hard to earn.
Eric, you have mentioned ‘being unfrugal sometimes’. This ‘sometimes’ is the crutch word. So you admit most of the time we should be frugal and don’t spend on these items.
I did mention that this is written for average Americans with average salary, and the reality is americans are in debt as the whole country in itself. When you are in debt, you should cut back, casinos and pubs are not for you. Similarly, can’t people enjoy parties drinking juices or soft drinks?
If you are affluent, go spend your money, spending helps the economy any way by creating new jobs.
I only mentioned the fugal part because that was the post I was referring to. I don’t think frugality is all that it is cracked up to be personally, rather I believe in responsibility, taking care of obligations and priorities then enjoying a little of what you worked hard to earn. Tomorrow is not guaranteed for any of us, so for anyone to go scratching for and saving every penny, never to spend on anything that isn’t a “need” is ridiculous to me.
What would happen if you never did anything you wanted to do or never did anything enjoyable because all that concerned you was saving for the future and that is when you were going to spend it. But what people don’t realize, especially the crazy-frugal people in the PF circles, is that you may not be able to physically do what you plan later in life. Age, health, luck, the course of history all play a role in to. So then you will have all this money and ruined plans and probably kicking yourself for not stopping to enjoy life when you were younger.
Now, I’m not saying that throwing money around is smart, but if you aren’t hurting economically, are able to meet your obligations and have the ability to save a modest amount as well, then why not live a little when you physically can. There is enough judgement in the world, I prefer to let people make their own decisions for the most part when it comes to their money. None of us are perfect, and what is good for me, may not be good for you or the next person. Like I said before, it’s all subjective
I do admit I personally have few habits like i mentioned. I have an expensive hobby (watch and sunglass collection) that takes money. I will again repeat myself this article is written for average american household, with median earning of $46,000 and average debt of $10,000.
As I have already said in the post, your mileage may vary.
I agree with Eric. A list like this is subjective and should not be considered absolute. The key is moderation and priorities. For the most part, everything on that list is fine to do once and a while (save for the prostitutes and online scams/hackers. Those are never OK), and if they’re important to you (season tickets, gym memberships, movies, etc) and they’re within your budget, then there isn’t a problem.
as I said, almost every point is subjected to your perception. I wrote it for average american who is in debt, and I strongly believe, he should avoid most of these, if not all
Paying for Viagra? Some would consider that a necessary expense. lol! As with all expenses it really just depends on how much you value that purchase. Budgeting is always the trade off between benefit and cost.
Agree and I know that for many, some of these expenses are very necessary ones. I only hear so far from all comments below or above that Viagra, Gym, Alcohol and Coupons are not as bad of an expense, expected to get a longer list though.
The only thing I do on this is have a gym membership, but I dont think of it as a loss of money – I enjoy going to the gym. I think FSYA is right – paying for things isnt bad if you get a great deal of value out of them!
Reading this post is like a kick in the stomach. I am not guilty of many of them, but the ones I am I just think, doh, I shouldn’t be doing that. The gym membership is the only one that I like because I have been with them for so long, my wife and I pay $18/mo for both of us. And since we work out regularly, it feels like we get our moneys worth…even though I have been jogging outside lately. It still works out.
If I would stop drinking so much liquor I could be in much better shape. Guess I know what I need to work on through the rest of the year.
Freddie and Jeff
this link is for you http://www.canada.com/reginaleaderpost/story.html?id=ddf4cbd9-a1c1-494c-8a37-63a95886baaf&k=89796 see the frugal exercise ideas
I don’t understand why “Preparing shopping list after searching coupons and discounts, rather than the opposite” is a bad thing. It has caused me to save money and eat better by planning my meals around the deal vs making my meal plan then finding the deals.
I think the reason is that you will spend money to save money if you do it that way. By making the list first, you will know what you need, and then you can knock off some of the cost by grabbing only coupons for those items. By doing it the other way, you are adding extra, possible unnecessary items just because you have the coupons.
Ginger might be one of the select few who uses coupons optimally. But majority of Americans buy things just because they get coupons. Otherwise, what’s the purpose of businesses issuing coupons?
Great point, especially when “dealspaces” like Groupon are becoming ever so popular.
Ginger coupons are issued to create artificial demand
I got a kick out of the list especially Viagra and prostitutes.
they cost a fortune..:)
Haha I am so guilty of #5.
Hilarious list. keep it up!
James thanks for comment, but I am not sure if I want to call this a hillarious list..
Drinking alcohol. This is a cool list, but I have to take exception to this one. No doubt it this is a cultural thing, but being an Australian means that every social gathering and celebration is done so with a drink. I don’t drink to excess, but I do enjoy it.
yes, it is cultural thing Hunter. But again, is drinking necessary for living, no. Good you are not in to too much drinking. you are saving money there
Great list! Sadly I think I am guilty of about 1/2 of the list.
good that you did admit, this’s the first step
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It’s easy to reduce the need for paper checks via paying online or with a bank card. I’ve cut back considerably on the use of paper checks.
But not every business or account is yet set up for that. My daughter is moving into her own apartment soon, and I told her to get some paper checks just in case. Sure enough … I had to write a paper check for one her expenses on my account before her checks arrived.
another good cause for reducing paper check is added security. Online payments can not be altered or misplaced. Many people have the misconception that online transactions is unsafe, but I do feel its opposite being a technologist.
You have really interesting blog, keep up posting such informative posts!
Thanks marina, comments are my fuel to keep going. Do come back soon
I’m a bartender, and in my state people in the service industry are paid less than minimum wage. Tips are our main source of income, not a bonus. If the service is good, please don’t advise against generous tips. I see far too many people who wrack up large bills, tell us we’ve done a great job and they had so much fun, who then leave abysmal tips. If you cannot afford the good service, you should not go out to eat or drink.
If you want to save money, find a good happy hour or ask about the specials. But don’t skimp on a tip simply to save money.
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I had a few exceptions I wanted to point out, both as a Canadian and someone that owns rental property. I realise this list is US based, but there are a few things that apply to both countries…
Using car for short distance travel – Unfortunately, with a physical disability, this is necessary.
Hiring tax experts when you can self file for free – The average person does not need to do this, but if you have a complicated tax situation (I own rental property in the US, for example), it’s considered extremely risky NOT to have a tax specialist look over this sort of paperwork.
Paying for text messaging plan – Canadian providers suck, I need to be able to text the US and the cheapest way is to add a US messaging plan to my cell phone.
Having home phone when everyone at home uses cell phone – My cell phone plan does not offer long distance rates to the US, which I need.
Not looking for cheaper car insurance – Canadians do not have this luxury. This is government run where I live.
Paying fees for banking privileges – My work requires me to bank with a specific institution for tax purposes (family company). I use fee-free banking for everything except my paycheque.
Not using chargeable batteries – these are a money loser in some ways. If you won’t replace the battery very often, if at all (a very seldomly used item), non-rechargeables win out in terms of cost.
Paying for guided tour – in foreign countries where you do not speak the language, this can be an excellent way to get discounted access to hotels, museums and such (travelling with a tour group, IF you are smart, brings group discounts).
I think if one is frugal by nature then there is pleasure in doing the frugal thing, and it is not thought of as deprivation. I like to read lists like these to see if I can learn from them. Being frugal is a “hobby” for me.