Everyone wastes money sometimes. Splurges add up, or you just don’t do the research necessary to get the best deal. You can limit the money you waste, however, by targeting six major money wasters. These things can bust your budget faster than you might believe.
1. Impulse Buying
A huge discount on that ab machine seems like a great deal when you see it in the store, but once you get home and use it only a couple of times before it sits gathering dust, you realize that perhaps you could have used the money for something else. Money spent is still money spent, and impulse purchases can be one of the biggest budget busters out there.
Apryl Duncan writes about impulse buying on About.com: “Research shows approximately 66 percent of all purchase decisions are made in the store. And 53 percent of those in-store purchases are made on impulse.”
One of the best things you can do is to make a list of what you need and stick to the list. Institute a “waiting period” for wants. No, you may not get the great deal, but if it isn’t a need, you can save up for it—if you still want it when the waiting period expires.
2. Carrying a Credit Card Balance
Even though the minimum payments appear low, the truth is that you are paying a large portion of that toward interest. That’s why your balance never seems to get lower when you pay the minimum; only a very small portion goes toward the principal.
When you carry a credit card balance, you pay a high fee for the privilege of lining someone else’s pockets. Try to avoid putting more on your credit card than you can pay off each month, and if you already have a balance, try to get out of debt as quickly as possible.
3. Buying Brand Names
Brand name merchandise often costs much more than generic brands. This is especially true of clothing and prescriptions. If you can find a generic brand of similar quality, you can save big. If you can get generic prescriptions or generic versions of over-the-counter drugs, you will find that you can save a great deal of money in the long run.
4. Frequent Eating Out
During this recession, many people have changed their eating habits so that they eat at home more, rather than eat out. This is good news, since eating out frequently can be a big money waster.
Not only does food prepared at a restaurant cost more per person than cooking meals at home does, but you also have to pay for a tip. You can reduce some of your costs by getting take-out. If you still like to eat out, try going to lunch on occasion, rather than spending more on dinner.
5. Banking/ATM Fees
You might be surprised at how quickly banking and ATM fees can add up. MainStreet.com’s Brian O’Connell points out that “banks earn 53 percent of all of their income from charges on late fees, overdraft fees, loan-origination fees and other surcharges …”
That means that you might be spending a great deal on fees from overdraft charges (which can be as high as $45 per transaction), ATM fees when you don’t go to one owned by your bank, and even monthly service fees. Find out what fees you are paying, and consider switching banks or credit unions if you can find lower fees elsewhere.
6. Wrong Insurance Coverage
Review your insurance policies. From life insurance to auto insurance to health insurance, you might be paying for coverage you don’t need (one example is maternity coverage for a woman who has had a hysterectomy). Or, you might even not have enough coverage. Both situations can lead to a great deal of wasted money.
Overpaying deprives you of money you could use elsewhere, and being underinsured can lead to financial devastation when you have to pick up more of the tab. Carefully shop around for the best rates, and perhaps get a professional evaluation to find the coverage that you need.
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Six Easy Ways to Save Every Day
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