Money-wasting expenses come in all forms, and the losses can pile up quickly. Keep these items in mind as you overhaul your expenses.
1. Landline phone service
More than half of U.S. households rely exclusively on cell service, and for good reason: Though comforting and familiar, a landline telephone isn't really necessary in today's world. Not only does its utility begin and end at your doorstep, the costs of maintaining it are comparable to cellphone plans with additional perks. For example, AT&T's top-tier landline plan provides unlimited national calling for $32.99 per month. Fair enough, but Virgin Mobile's basic cellphone plan comes with unlimited talk, text, and data for $50 a month, all of which you can use from anywhere. Ditch the additional cost and become a single service household.
2. Bottled water
The crisis in Flint, Michigan has highlighted the importance of water quality in our homes, but bottled water isn't an economical answer. Suppose you drink 60 ounces of water per day, or about 3.5 standard bottles. At $12.97 for a pack of 24, staying hydrated with Aquafina will cost you about $56.50 a month. You're better off investing in a filtered water cooler that taps into your home's water line. A certified model uses reverse osmosis to remove harmful bacteria and chemicals from your water. While your initial investment may cost $450 or more, you'll make up the difference quickly by forgoing bottled hydration.
3. Baby and child items
The current price tag for raising a child from birth to age 17 is $233,610, and at least some of that is wasteful spending. As a parent, I can vouch for the piles of "essentials" that go unused in the early days, including high-end clothing (that they will quickly grow out of), bouncers, playpens, excessive toys, and everything in between. Skip the parenting website lists and rely on fellow parents for some straight talk and shopping advice.
4. Gym memberships
The average gym membership costs $58 per month, and 67% of members never set foot inside. Fitness is important, but wasting money to feel health-conscious isn't the answer. Check out free online programs and YouTube channels that will get you into shape when you have the time to invest. If you need support, find a workout buddy or join an online community like MyFitnessPal to hold yourself accountable.
5. Brand names
Name brand goods are attractive and recognizable, and it's probably messing with your subconscious. Psychological researchers at Caltech found that consumers perceived high-priced items to have superior quality, and were therefore "better" than affordable alternatives. There's nothing wrong with preferring a certain brand, but not at the expense of your budget and liquid savings. Curb your enthusiasm and stick to purchases that honor your financial situation.
6. The latest gadgets
Emerging technology is exciting as a consumer and an investor, but that doesn't mean it's affordable. Nearly half of Americans don't have enough savings to cover a $400 emergency, let alone the purchase of a new iPhone, which means that they'll tack on a payment plan to their standard cell service. While this isn't the worst idea, a Gallup survey found that 44% of phone users will upgrade as soon as their provider allows it. Prolonging your payment plan in favor of the latest gadget isn't the best use of your cash. Consider growing your attachment and letting go of your payment burden.
This one is a no-brainer, but the average smoker still shells out $188 a month or $2,292 a year for a pack-a-day habit, according to the Centers for Disease Control. In addition to serious health risks, daily smoking could literally prevent you from saving enough to cover emergency expenses, and even retirement. At a return of 7%, for example, $188 a month invested over 20 years would grow to nearly $97,000. Consider speaking to a doctor about how to overcome your addiction, and redirect your money into something worthwhile.
8. Convenience foods
We all love the occasional grab-and-go meal, but frequent convenience purchases come with a steep price. A 2010 study conducted by the Society of Teachers of Family Medicine (STFM) found that the average total cost of a whole, healthy foods diet was $5,019 a year, while a convenience food diet was double the price at $10,298 a year. In addition to busting your budget, highly processed and packaged foods are also generally linked to poor diet and lifestyle, two things that can cost you even more in health-related expenses. Think twice about what you eat and consider signing up for a meal prep service, which can provide better dietary options at a fixed price.
You don't have to be a math whiz to budget effectively. Take stock of your mindless spending, put safeguards in place, and aim to do better. The result will improve your finances and change your perspective.
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