Years ago, I had a friend we called “The Early Adopter”. It didn’t matter what kind of technology it was – phones, computers, video games, or TVs – he always had to have the newest model. And while he did have some cool toys in his rented apartment, the rest of us were starting to make downpayments on our houses.
There are countless ways to waste your money, and you don’t have to be a shopoholic to fritter it away. Here are some of the most common ways people waste money, and some advice on how to stop spending money when you really don’t have to.
Eat And Spend Smarter
Most of us recognize that it generally costs a lot more to eat out at a restaurant than it does at home. And we’ve previously pointed out on this blog that takeout coffee is such a frequent source of cash-flow shortfalls that credit counselors refer to it as “the latte effect”. But even if you do limit meals and beverages to the occasional treat, there are still ways to save on your grocery bills.
Rule number one is to make a list before you head out. If both helps you stay focused on your needs – rather than those pricey impulse buys – and, if you make your list at home, you’ll avoid buying perishables you already have.
Rather than paying a steep premium for those pre-cut veggies, pre-mixed salads, and other partially prepared convenience foods, do it yourself. After all, chopping some meat with kitchen shears (a.k.a. scissors) and some veg for a stirfry only takes a few minutes.
A few other grocery shopping tips:
•House brands are cheaper – and often made at the same factory – as name brands.
•Clip those coupons.
•Scan the flyers and stock up on non-perishable staples (toilet paper, soup, dried pasta, microwave dinners, etc.) when they go on sale.
•Buy in bulk, but only if you’ll be able to use it before it goes bad.
•Finally, make sure you follow that tried and true advice: never go grocery shopping on an empty stomach or you’ll end up with a cart full of unnecessary treats.
Be More Proactive With Your Financial Planning
One of the most common ways people waste money is in mismanaging how they handle their money. Miss a bill payment and you’ll be charged (high) interest and a penalty. Do it frequently and you’ll risk damaging your credit rating. Carry a balance on your credit card and, in most cases, you’ll be charged a very high rate of interest (up to 30 per cent or more depending on the card) backdated to the day of purchase. Withdraw cash from another bank’s ATM and you’ll get charged a service fee by both banks.
One way to avoid the first two charges is to apply for a line of credit – before you need it – so you’ll have it available for those times when your money cash flow falls short of your bills.
Choose Better Financial Products
We’ve said it before, but this wisdom can’t be repeated enough – carrying the wrong credit or bank card is like throwing money away. You can get a leg up on your daily savings by choosing options that don’t charge fees, and earn rewards that actually help with daily affordability.
Product Tip: One good option is the MBNA Smart Cash Credit Card, which earns cash back on the daily purchases you’d be making anyway.
As a signup bonus, you’ll earn five per cent cash back on gasoline and grocery purchases for the first six months (two percent after that), and one per cent cash back on all other purchases. And if you’re one of the many people who have been carrying high credit card debt, you can also take advantage of another incentive: two per cent interest on balance transfers for up to 10 months. That’s a pretty significant break on interest – be sure to take advantage while you have it!
What are your biggest daily money wasters? Let us know!