If you read personal finance blogs, you’ll notice plenty of articles on saving money, we also write about earning money a lot. With a twist and a purpose in mind let me list down few foolish ways to spend money. I could think of 74 ways as of now and I’ll add on as I come across other possible scenarios or read about them.
Why is it important to know about losing money? It’s because only when you are aware, you will want to change the spending habit on such items. Knowing things that can qualify as ‘losing money’ can help you seal the leak.
Ways to lose money foolishly
- Smoking – At average $5.50 per packet, you waste so much money on smoke
- Buying penny stocks for instant profit and suffering an inevitable loss later.
- Buying lotto/lottery tickets – only one in a million gets success.
- Buying new dresses too frequently so much so that you soon forget what dresses you have already
- Paying for a weekend shopping spree to kill time mainly, for no apparent need.
- Paying for a magazine subscription that you don’t have time to read.
- Using the car for short distance travel regularly. A bike would not consume gas
- Not using comparison websites for your purchases and travels
- Not paying off full credit card balance every month. Finance charges take out more money from your pocket than the cost of the goods.
- Paying govt. using a credit card, since they always charge a service charge for credit cards
- Charging your loans on credit card to get reward points and forgetting about paying them off in full before it’s due
- Preparing shopping list after searching coupons and discounts, rather than the opposite.
- Paying for fraudulent charges by not properly scrutinizing your bills
- By not cutting the cord, honestly how much TV you watch? If it’s less than 2 hours per day, you can very well survive without your cable network.
- Buying software when alternative is available for free (ex. MS Office and Google Docs)
- Buying electronics from brick and mortar stores, rather than from online discount stores.
- Not bargaining enough to reduce the cost of an item you are buying.
- Going after brand name when better and cheaper variety is available
- Drinking Bottled water when tap water is available, with similar quality.
- Using vending machines for light snacks or drinks regularly.
- Buying expensive gas when a regular 87 octane grade is sufficient for most cars.
- Not using cash-back/reward credit card, if you are a credit card user. I earn on average $1,000 per year on credit card cash backs
- Investing in stock futures and options, unless you are a pro.
- Hiring tax experts when you can self-file your return for free, especially after the Republican tax reform which made itemization redundant for most middle-income households
- Not selling all the unwanted items you accumulated. The longer they sit at home lesser the price they fetch at a later date.
- Not asking doctors and pharmacists for generic alternatives
- Buying Computer maintenance service (ex. Geek squad), if anything goes bad on your computer, you can definitely hire an expert, but only on need basis. It’ll be cheaper than buying service plans
- Having home phone when everyone at home uses a cell phone. At least our home this was the case until we cut that cord.
- Not using thermostat at home, you lose money towards higher utility bill. A programmable thermostat can save up to 10% of your utility bill.
- Paying for text messaging plan, we have free messaging apps available on every phone
- Movie subscription, I am sorry if you frowned at me. I don’t use Netflix!
- Paying fees for banking privileges. There are interest-paying checking accounts and saving accounts which can earn you money on your deposits.
- Going for shopping multiple days in a week as opposed to one day
- Not having enough insurance coverage (Life, home or Car), when something goes wrong you lose your wealth.
- Paying with a check (they cost money to re-order) as opposed to online payment for free.
- Give in to your kid’s demands most of the time.
- keeping money in a low-interest checking account or in cash, inflation eats your money
- Not looking for cheaper insurance options. The more you switch your insurance, cheaper it gets.
- Drinking alcohol. I do drink but socially. We don’t drink at home unless we are hosting guests. Drinking as a habit is a surefire way to lose money.
- Visiting pubs and clubs regularly. I admit most of us need to go clubbing but not all the time. Cost of food and drink run high at these places.
- Not refinancing mortgage for a cheaper rate. If you add up the interest saving you could have achieved, it’ll be a huge number. When I did my calculation it was almost the price of a new car.
- Not buying store brands and going for the well-known named brands for things on which you can go cheap.
- Buying greeting cards instead of sending your wishes electronically.
- Not using yearly free medical, eye and dental checkups that come with insurance.
- Shopping at airports, even if they are duty-free, most of the time the buying is impulse buying, not out-of-need buying.
- Shopping In-flight is almost always buying things for twice the market value.
- Paying for small home/car repairs that you can fix yourself.
- Using cheaper products, in long run, they cost more money than quality products like electronics, utensils, etc.
- Buying things from the gas station (convenience stores). They sell items at hugely marked up prices.
- Spending on expensive hobbies which do not add many values.
- Not driving a car till its dead, trade-ins are almost always losing deal for you.
- Day trading stocks if you are not a professional trader.
- Giving to a charity you have no clue how they spend that money. Always give to a place you know personally or is a reputed organization.
- Driving recklessly, the tickets, coupled with increased insurance premium can drain your money.
- Not filing tax on time, or not filing at all. When IRS comes knocking you may find your money
- Paying for energy drinks all the time, all you need to do more, is motivation, after-all!
- Not using rechargeable batteries for your gadgets.
- Frequent movie theater trips, whereas you can watch movies for free from local libraries
- Paying for learning things which can be self-taught
- Hiring prostitutes is one of the sure-fire ways towards burning a hole in your pocket
- Paying for a guided tour on your vacation. To me, the best way to know a place is to walk.
- Eating out too often. Brown bagging lunch and cooking your own meal saves a lot of money.
- Buying season ticket for your favorite team. The survey shows that more than 50% of season ticket buyers do not watch more than 50% of the games. You decide!
- Using overnight courier delivery when the recipient can wait another day or two.
- Spending on chewing gums. I still don’t get what the use of it anyway.
- Spending money in the Casinos. Only rarest of rare people could win money there.
- Falling victim to phishing scams. We read about people being robbed by scamsters all the time
- Paying hefty tips at restaurants, usually, 15% can be considered good tip
- Throwing too many parties for no apparent reason. If you’re on a budget you stop being a party animal.
- Betting often causes monetary losses, in a way this is no better than gambling your money away!
- Not taking good care of your health, take care of your health to keep money in your bank.
- Buying new games or music albums without first reading reviews or trying them out.
- Falling to Online/internet scams, learn to avoid being scammed.
- Installing software from untrusted sites and thus revealing few passwords to hackers. which in turn means money being taken out of your accounts without your knowledge
Every rule has its exception. Likewise, all the above points will have their own limitation too and in a 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, for that matter smoking cigarettes.
This list is prepared for a reader who is among the healthy population with average income (USA national average) but, your mileage may vary. As for rich some of these expenses are routine like paying for tax preparation.
Same way, athletes will drink gallons of energy drinks and spend money on gym memberships. If you are old and physically in need, you may want to only opt for guided tours during your vacation trips.
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 can come up with other ways to lose money, do share with us by commenting below.
I don’t think you mentioned paying bills after the due date necessitating a fine. Also not taking care of dental problems immediately as they only get worse and more expensive to repair as time goes on.
Carole, those are two nice additions to my list. Dental procedures are so costly here that we immigrants take care of our teeth during our visits to home country. I did even a root canal there at almost one-tenth of the price that was quoted by my local dentist here in Florida. Point #9 does talk about not paying credit card dues, though.
A lot of wise advice! As you said there are always exceptions and I certainly failed a few of those but mostly they read like the playbook my wife followed to financial independence and slightly early retirement.
We call them FIRE people, financially Independent and retire early.Good to know you have someone at home to guide you through those exceptions 🙂
Analytical list!!You just arrived with some exact points and drawn the article “Ways to lose money foolishly” wisely,,keep it up buddy….