When it comes to saving money we employ all kinds of tactics. Sure, we start by tracking our expenses (so that we can see where this money goes) and also by setting up a realistic budget. These two allow us to see where we’re ‘losing’ money and what purchases are preventing us from saving.
1. Coffee on the go
I wrote about “what’s wrong with the Starbucks latte” before. Sure, the latte (or the coffee) itself is OK, properly made and yummy, the issue is that these little expenses add up, even if we fail to sometimes acknowledge this. It took me years to understand ‘where my money went‘ and only after starting an expenses journal I was able to finally understand why I was living paycheck to paycheck, with no debt (back then) and no family to support.
2. New gadgets, just because they are released now
One of the biggest mistakes I see people make, when it comes to saving money, is to jump to buy a new gadget, just because it got released. iPhone 6? Does it sound familiar? Do you know how many people have perfectly good smartphones (some even the previous model released by Apple) and yet queue for hours to get this new one?
Same goes for DSLR cameras, laptops and any other gadgets. In our family we try to purchase the best options for us (best specs at a great price) and then use our gadgets till they break.
3. A new car every 3 years
I don’t know how often some change their cars, but from what I read, it’s ‘customary’ for people who’d like to look successful to ditch 3-4 year old cars for something new. Sure, most of them just finished paying for the dang thing and are ready to get into debt again (or pay a lot of cash), so that they get the latest release.
I purchased my car in 2008. It was new and I got a car loan for it. Four years passed, I paid off my debt and the car was at about 15K miles. Now, 6 years later, we just ‘broke’ 25K miles. Should I get a new one? Maybe, since there’s a new model and the car is 6 years old. But then again the car works great, is in awesome shape and can be used for at least 4 more years.
Sure, I won’t be the coolest kid on the block with a 6 year old car, but it helps a lot with saving money, since I don’t have to worry about such a huge purchase for few more years. NO, I am not advising anyone to use a ‘beater’, reason I chose to take a car loan, since I couldn’t afford a new car and didn’t want a very used vehicle. But my car now is still in awesome shape and I’m gonna use it for a while.
4. Shoes and clothing you’ll never wear
If we look closely to our dressing habits we’ll notice we actually go by Pareto’s principle – we wear 20% of them 80% of the time. If I come to think about myself I have 3-4 t-shirts I’ve been wearing like crazy and a pair of jeans close to disintegration. Few months ago I purchased online 2 more pairs (at very small prices), claiming that I can’t wear those ‘rags’ anymore. The new jeans arrived, fit me great and yet I still wear the old ones.
I’m not saying we should dress like homeless people, but having tens of dresses, blouses, suits and shoes is just a waste of money. There’s a lot of saving you can do by just refraining to purchase any new items just because they’re nice and by trying to make the clothing you have match in various outfits.
5. Bottled water and soft drinks
Tap water is pretty good in most places we live, even if we dislike the idea of using it. Sure, there are areas where it’s not healthy for drinking, but we still purchase a lot of bottled water even where tap water would suffice.
If you are still quesy about the entire idea, you can get a filter and then the water is even cleaner (you’ve done the filtering yourself, didn’t you?)
Soft drinks are even worse, they are expensive (as they add up each month) and unhealthy. Maybe drinking less would help you lose weight (or keep a healthy figure), not to mention saving money.
6. Phone / tablet apps
As soon as I purchased my Nook, 4 years ago, I started adding applications from the app store. They weren’t expensive: most were 99 cents, there were few that cost more (3-4 dollars).
The shock came at the end of the year, when I tried to see where my money went in the past 12 months and if I could change something in my habits to save more money. I was indeed shocked, the apps were pretty expensive (when you added them up).
7. Lottery tickets
Sure, there are FEW people who were able to hit the jackpot. There are even fewer for whom this really meant a huge step forward since the majority wasted the money in few years (or less). For most of us ‘regulars’, lottery tickets are a waste of money.
You might want from time to time to try your luck, just as most of us do. But purchasing tickets on a regular basis is just a huge waste of money. Why not think about saving this money instead (put it in a jar for instance) and see where it leads you.
8. Cheap merchandise
From your juice extractor to the shoes you’re wearing, getting the cheapest options is not a good idea. Of course we cannot afford to purchase 500 dollar shoes for instance, but quality shoes, made from good leather and well manufactured don’t cost an arm and a leg. They’re clearly comfortable and will last longer. I had some winter boots that last me for 10 years, I ditched them since I was just sick and tired of them, they’d be good to wear even now.
Getting the cheaply made products might seem like a good deal now (you’re paying less), but they do break easier and will force you to purchase the same thing again.
9. Dinner at the restaurant
One of the things that can really bust one’s budget is dining out. Sure, you’d probably do this from time to time (a special occasion perhaps), but doing this routinely will strip down your wallet like nothing else.
Even someone with a very hectic schedule can work out some menu plans and cooking meals in batch, freezing them and then just use when needed. It does take some effort and preparation, but you’ll eat healthier and save money.
10. Expensive watches and jewelry
I might step on few toes here, but I can’t see the need for a ‘regular Joe’ like us to spend hundreds or thousands of bucks on something that will show the correct hour. After getting my smartphone and now the baby, I don’t even use the watch anymore. It’s a small Citizen watch that cost about 100 bucks.
When it comes to jewelry, my only one is the wedding band (which was also made at a very affordable price). I do have some jewels from my folks, but I’m actually afraid to wear it on a regular basis. I don’t want to get mugged just because someone things I have a lot of money. Same goes with my daughter who doesn’t wear anything. She’s too small, true, but she’ll not have a necklace or earrings to wear until she’s older. I’d rather she won’t have the ‘experience’ of being attacked for few grams of gold.
As I like to say, gold is for safekeeping, not wearing.
So, what’s your list of purchases that prevent you from saving money? Is anything from my list? Something new?