Americans are good at a lot of things, and wasting money is one of them. In fact, Americans waste $165 billion annually on food just by tossing out what they don’t want to eat, according to the National Resources Defense Council. They also do a good job of purchasing items they don’t need.
But you don't have to make the same mistakes. If you want to save more money and build wealth, avoid wasting your money on these expenses.
Overspending on Education
The U.S. spends more on student education each year than most other countries, according to a 2013 report by the Organization for Economic Cooperation and Development. Yet despite spending more, American students don’t perform as well on tests.
Further, college tuition continues to climb in the U.S., and family income hasn’t kept up, according to a recent report from The College Board. So, many are left wondering: Is college tuition worth the cost? And, what are some ways to save on this expense?
Choosing to stay inside your home state for college can be a smart move for your pocketbook. Average in-state tuition for a public university is $9,970, for the 2017-2018 school year. You’ll pay more to cross state lines, with average out-of-state tuition and fees at public universities coming in at $25,620. Meanwhile, tuition and fees at private colleges average $41,727, according to U.S. News & World Report.
If you really don’t want to waste money, consider community college, said Timothy Wiedman, a retired associate professor of management and human resources at Doane University in Crete, Neb. The average cost of in-state tuition and fees at a community college is $3,520.
“Completing a two-year transfer program locally while living at home — and then transferring to a more expensive four-year school to complete a bachelor's degree — will often save a great deal of money,” he said. And the coursework will be virtually identical, he added.
Purchasing Expensive Diapers
Diapers are a messy business — and an expensive one for parents. According to Babies R Us, a baby will need up to 3,360 diapers in the first year of life. If you spend an average of 25 cents per disposable diaper, that is $840 for the first year.
Diapers are a necessity when welcoming a new life into the world, but don’t use them for longer than required. “People waste hundreds, if not thousands, of dollars by believing that children need to wait until certain things happen before they can potty-train,” said Michelle Swaney, owner of The Potty School, where she teaches people how to toilet-train their children ages 18 months and up.
In fact, the U.S. lags in toilet-training when compared to other parts of the world. For instance, Vietnamese babies are usually out of diapers by 9 months of age, reports NPR. In the U.S., the average age for a child to be toilet-trained is somewhere between 24 and 30 months, which is a conservative estimate, said Swaney.
To avoid wasting money on diapers, consider going with the store-brand versions — diapers are one of the best items to buy generic.
Buying Unnecessary Baby Stuff
Do you know how much it costs to have a baby? According to the book “Baby Bargains” by Denise Fields, a baby will cost your household an average of $7,000 in the first year alone. However, the cost can be much higher that that. With a price tag like that, it’s important to spend money wisely.
So, stick to buying only what is necessary. For instance, do you really need to purchase a Playtex Baby Diaper Genie Complete Diaper Pail at Target for $34.99? Or could you just recycle grocery bags to dispose of dirty diapers?
The same holds true for a bottle warmer. You can warm up a bottle by simply using warm water. And do you really need a specialty baby-food maker, when a regular blender will do the trick?
Betting on Lottery Tickets
We all have dreams, but spending cash to become a millionaire shouldn’t be one of them. Americans spent $73.5 billion on traditional lottery tickets in 2016, according to the North American Association of State and Provincial Lotteries. A quick look at the Powerball website tells you the odds of winning the lottery grand prize are slim — 1 in 292,201,338 to be exact.
Even if you win the lottery, you have to wait to be paid. You also fork over taxes, which can drastically reduce your winnings. Some people believe only the poor play the lottery religiously, but a 2016 Gallup study reveals that Americans who make less than $36,000 are significantly less likely to play the lottery than those in the upper-income brackets.
Instead of wasting money on lottery long shots, spend it on something that’s attainable — such as a dinner out. At least spending in that manner allows you to enjoy yourself.
Failing to Shop for Bargains
Never shop without scoping out discounts and deals first. Fail to do so, and it’s basically like leaving free money on the table.
“Although today’s online shoppers are very savvy, many do not take advantage of free money, such as cash back,” said Brent Shelton, an online-shopping expert at FatWallet. For example, you can earn cash back by shopping through sites such as Ebates, and many credit cards offer cash-back rewards on purchases, he said.
The savings add up when you take advantage of these incentives. In addition to Ebates, other sites that offer promotions and cash-back deals include:
- Coupon Sherpa
Don’t forget to check out individual store saving opportunities, too. These include the Cartwheel app at Target and Yes2You Rewards at Kohl’s. Check details of your credit or debit card for other saving and earning opportunities.
Insisting on Lavish Weddings
Your wedding day is supposed to be the best day of your life, and people often feel that they need to spend a fortune to make it special. In fact, Americans spend a ton to say “I do” — an average of $35,329 in 2016, according to the latest survey from The Knot.
Europeans, on the other hand, are much more conservative with wedding expenses, spending an average of $5,495 on nuptials in 2015, according to a survey by ING, the Dutch-based multinational and financial services firm. Europeans would rather spend money on a house than a wedding, the report found.
So, how can you save thousands on your wedding? Think smaller — reduce the guest list, buy fewer flowers and settle for a dress that isn't designer.
Accruing Bank Fees
Americans paid $15 billion in overdraft fees last year, according to data released by the Consumer Financial Protection Bureau (CFPB). That doesn’t mean that people are spending outlandishly. Simply overdrawing on your bank account by a few dollars could slap you with an overdraft fee or a non-sufficient funds (NSF) fee. As an example, Wells Fargo charges $35 for each NSF.
You might be able to avoid an overdraft or non-sufficient funds fee by being proactive. To start, check your account settings online for overdraft protection to see if you can receive text or email alerts if your account balance drops below a certain dollar amount. These alerts can notify you before you overdraw.
ATM fees are another type you can avoid simply by using the ATMs in your banking network. You should also strive not to pay a monthly maintenance fee on your account. Most banks make it easy to avoid by meeting particular requirements.
Neglecting to Use Gym Memberships
Remember that gym membership you signed up for as a 2017 New Year's resolution? If that seems like a distant memory now, then you’re probably trimming your wallet instead of your waistline.
Many Americans are wasting their money on unused gym memberships — and that’s what gyms are banking on, according to The Washington Post. They know they can offer amazing deals and sign as many people up as possible, because a good portion of gym members will stay home. Now, if you use the gym regularly, you’re likely getting a good deal. For anyone else, scrap the membership and work out by going for walks.
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Underusing Subscription Services
Whether you follow the latest fashion, beauty or food trends, there's likely a subscription service for you. In fact, today’s society seems obsessed with subscriptions, with companies such as Blue Apron, Plated and ShoeDazzle becoming household names.
As you know, subscriptions mean you pay a monthly fee. Although most of these companies charge under $50 per month, pricing does vary with frequency and quantity.
Further, many people sign up for free 30-day trials with intentions to cancel, but they often forget.
As Yahoo tech columnist David Pogue writes in his 2016 book, "Pogue's Basics: Money," "Nothing makes a company happier than getting its customers to sign up for subscriptions.”
Staying Connected to Cable
The average American's cable TV bill is $103.10 a month, according to a recent study by Leichtman Research Group. And the cable companies are continuously upping pricing, along with fees for equipment, HD and other associated services. Unfortunately, most people aren’t using the cable service enough to make that amount worth the investment — and perhaps you’re one of them.
So, what are your alternatives? Consider breaking up with your cable service and getting your TV from the internet with services like Netflix, Hulu, Amazon Prime or HBO Now. The costs of these services are a fraction of cable.
If you must keep your cable service, consider purchasing the cable box instead of renting, which could save you big bucks in the long run. The amount you could save is typically between $96 and $240 per year, according to Cut Cable Today.
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