Top 10 money wasting habits of American
The Census Bureau recently released a study showing that the average American household income was forty-nine thousand four hundred forty-five dollars last year. When you factor in inflation, that puts us exactly where we were fifteen years ago. Want to hear something even more hope-killing? Our poverty rate last year was over fifteen percent. That’s the highest rate since 1993, and a number that translates into forty-six million people. It’s an understatement to say that Americans do NOT have a lot of excess money in their pockets. That’s why we all owe it to ourselves to keep a tight handle on the cash that we DO have.
Spending wisely and putting a stop to wasting money can help deliver you safely on the other side of hard times. Reckless spending during a recession, whether on a personal, business or governmental level, can only perpetuate or deepen financial problems.
Here are the top ten ways that you – and most Americans – blow money when you don’t need to.
The first item on the list?
Buying New Things
Buying things new when there is no good reason not to buy secondhand. When you “have” to buy something with its original packaging, you can usually bank on paying double what you should. Experts will tell you that automobiles are the biggest offenders here: nobody should buy a new car, they reason, because it inevitably makes better financial sense to buy a solid used car.
Eating out is one of the most expensive habits you can have. Consumers spent an average of $28.47 on each restaurant meal in 2010 and averaged 82 restaurant visits during the year — adding up to $2,341, according to Mint.com. Bars and alcohol is another money sucker, with people paying even more per transaction for alcohol than they did for dining out last year. On average, people spent $42.27 each time they went bar-hopping.
Infomercial impulse buys
Only $19.95! Call now and we’ll double your order! Such promises have lured in many unsuspecting consumers to what they thought was a great deal. The infomercial industry brings in about $400 billion a year, according to the Electronic Retailing Association. But it’s no secret that many impulse purchases go unused.
Americans also waste a lot of money by accepting initial offers when they buy things, says Penzo. Do you pay what you are told at the doctor’s office? At the hotel desk? For your cable bill? Well, most people do – we are not really a haggling society, and we are trained to view the prices of such intangibles as non-negotiable. Big mistake. As Penzo points out, it never hurts to ask – and you might be blown away by your success! Penzo got a twenty-six hundred dollar discount on the cost of having new windows installed in his home and thirty percent off his dining room furniture, just because he ventured to negotiate a bargain.
Food products from popular brands may come in prettier packages, but that doesn’t mean they’re superior to their generic counterparts. While a 9-ounce box of Rice Krispies costs $4.79 at one New York City grocery store, its 12-ounce generic brethren costs only $1.99, with an identical list of ingredients.
Buying a bigger home than you or your family needs is another huge way that you could be wasting your hard-earned money. In 2001, Americans consumers spent about twelve percent of their incomes on “residential and transportation energy,” but this year they’re projected to spend almost twenty percent. Living in a big house with unused rooms or bigger rooms than you need is like driving a stretch limo: You’re buying energy for unused space. A bigger house means more furniture, higher maintenance, higher taxes, and more time spent taking care of it. When home prices were rising, there was some logic to leveraging potential profits by buying the biggest. Now, that extra space is nothing but a cash drain. If you are already in a big house, the conditions of the market make it likely that you are stuck with your mistake. If you are still in the buying phase, however, there is no excuse to be stupid.
Spending a few bucks a day at the local coffee bar may seem cheap. But imagine all the money you could save if you simply brewed your own coffee at home. Americans spend an average of $8.43 each time they stop at a coffee shop, according to data compiled by Mint.com. With caffeine fiends filling up an average of 46 times last year, this adds up to a total annual bill of $385.97.
Paying for things you could get free is another cardinal sin of the smart spender. From TV to travel, there is a whole world of things out there that you could be getting free… and yet you probably pay for. Don’t feel bad, lots of people do. Still, know that creativity and flexibility can often replace money. There are a host of resources on the World Wide Web for those looking to start capitalizing on the abundant number of freebies available out there. You just need a little motivation to get started.
Not only are they bad for your health, cigarettes are also a cancer on your budget. Americans spend $80 billion on cigarettes per year, according to the U.S. Centers for Disease Control and Prevention.
Thurber said many of his clients spend about $70 a week, or $280 a month, on packs of cigarettes.
Paying too much for your car insurance is the last spending sin… and it can be a biggie. Let’s say that you are involved in a fender bender that does five hundred dollars’ worth of damage to your car.