I’m a Financial Planning Expert: 5 Things That People Think Are a Waste of Money, but Actually Are Not

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There’s a lot of advice espoused online about the best ways to spend your money — the kinds of purchases that make for a good investment versus the ones that are not worth it. We may think we recognize things we shouldn’t spend money on, but you may not be throwing away as much money as you think.

GOBankingRates spoke to Thomas Kopelman, co-founder and financial planner at AllStreet Wealth, and Brenton D. Harrison, CFP and financial advisor at New Money, New Problems, to determine which things can be a surprise investment.

Here are five things people think are a waste of money, but actually are not. 

Renting a Home

Generally, most people are encouraged to buy a home as soon as they can afford to do so. Buying a home means building equity and increasing your net worth. Due to the barriers to entry, like increased mortgage rates and home values, many potential buyers are unable to purchase homes at all.

The cost and headache of renting a home, Harrison said, often pales in comparison to home ownership. Those who want to rent a home face a more limited barrier to entry involving a security deposit and a couple months’ rent. Less is involved overall for renters who need or want to move to a home that better fits their needs. 

Renters also pay substantially less than homeowners in home maintenance. Harrison said some experts recommend budgeting at least 1% of your home value towards maintenance each year. If you rent a home, however, you wouldn’t be on the hook for home repairs.

Leasing a Car

Leasing a car is another expense many think means throwing money away. With record-breaking increases in prices for new and used cars, Harrison said today’s leases can offer some financial advantages. 

“Lease payments are often significantly lower than what you’d pay by actually purchasing the vehicle,” said Harrison. “Because new cars depreciate quickly, trying to sell a car you’ve purchased, but haven’t paid off, likely means accepting a price less than what you owe on the loan.”

Another benefit of having a lease is it covers maintenance costs during the lease. This reduces costs to the driver. Plus, if you notice any major defects with the car, the driver isn’t responsible for them because it’s a lease.

Hiring a Financial Planner

According to Kopelman, hiring a financial planner is an investment, not a cost. 

“Most people go to college and understand the value of education and learning to make more money. But many are unwilling to pay money to learn how to manage that money well,” said Kopelman.

Education-Based Programs

Enrolling in a course or program that can deepen your learning and skill set in a particular subject is a great investment in yourself. You’re able to learn new concepts, which will lead to earning more money in your career. 

Whatever program or course you’re enrolling in, Kopelman’s recommendation is to do the research and make sure it’s legitimate.

Household Services

Many consider delegating household services, like getting someone to wash and fold your laundry, hiring landscapers and getting someone to clean your home, a waste of money. You can save more money doing it yourself, right? 

Not always. Harrison recommends establishing an hourly rate you expect to be paid in your professional life. Once you set this rate, like $50 or $100 an hour, you can better inform which tasks in your personal life are worth delegating. Many of these services will cost less than your hourly rate, but can save you several hours each week.

If you have a busy schedule or there’s a lot on your plate, Harrison said it’s worth it to pay a company that can take care of these tasks while you focus on doing more of the work that pays you.

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