Making money is a big part of my life. I love earning it and spending it. What I hate though is when I waste it or see people wasting money, especially when they dont even realize they are doing it.
It happens a lot trust me, I have a few young colleagues at my work and one of them the other day told me he spends £2000 per year on car insurance so he can drive a powerful car. £2000 Well I told him he was insane.
That is an extreme example and I appreciate that but this kind of expenditure got me thinking about all the needless things that we as a nation waste money on.
I am as bad as the next person although I must admit that this year I am trying to be more frugal. So I am going to list 11 things that most of us waste money on and how to avoid doing so and what we can do to change this and save ourselves some money to spend on things we do need.
Bank Account Extras:
Bare with me on this one. I’m talking about the bank accounts where you get some extra stuff if you pay a small fee for the privilege.
For example, we bank with Lloyds TSB. We have a platinum account which when we initially got it was £10 per month extra.
So, Lee tell me what did you get with that? Well, we got free AA breakdown cover, Worldwide Travel insurance, Mobile phone insurance and Everyday offers which give you up to 15% cashback.
This little platinum package now costs us £21 per month. The pure definition of money wastage. Now we worked out that we get a breakdown cover with our car insurance. The travel insurance is cheap enough to get when we go on holiday once a year and the mobile insurance isn’t that great as you have to pay upfront costs which are not explained at the beginning.
So ultimately we have canceled this and all we have to pay now is around £20 per year for insurance when we go on our holidays.
Have a look when you have finished this article and make sure you dont have any bank account extras that you either were not aware of or haven’t checked for some time.
Bank Overdraft Fees
Ok so while we are on the topic of bank accounts this is another one that can be quickly forgotten about. So you get given a free overdraft and you think great ive got a safety net in case anything goes wrong like my wages dont get paid or something similar.
The only issue with bank overdrafts is either they bring in a small charge for having it or worse a bigger charge when you do actually go into your overdraft. Either way you often dont know anything about it until its too late. At this point the charge has come out of your account and you are now broke.
If you can avoid having an overdraft then that would be the sensible option. I know sometimes this is not going to be the case but make sure you read all the small print. Also make sure you know exactly how much these overdraft fees are going to cost so that you can make an informed decision about whether to have one or not.
Arrrghh. This one drives me nuts. The number of times I have had a conversation with someone who has been paying £15 per month for 3 years to have a warranty for a £300 refrigerator. These people are just wasting money.
You would be better off just putting that money in a bank account. You have a warranty for a year anyway so why not save that money then, if the appliance breaks after that then you will have the money to resolve the issue or buy a new one.
It has only been recently that Ofcom has decided to start looking into extended warranties again because of so many complaints.
Most appliances/white goods these days are built to a really high standard. If anything is going to go wrong it will be within the first year. This though is where the standard manufactures guarantee will cover you. If you have brought the item on a card there is also a level of protection for yourself there as well.
Unfortunately, these companies that sell extended warranties will always be around as long as there are people willing to hand over their money. The elderly and people living on their own or relying on a pension are the ones most at risk.
Most household items do not require you to need an extended warranty.
This is one of the things I have sworn to cut back on this year as it costs me an absolute fortune. When I looked into it a bit further I really was only watching a few channels anyway and with the onset of streaming services such as Netflix, it began to make sense to just cancel half the channels on my bill.
The main ones which were costing me money were the movie channels and sports channels. Well between me and my wife we probably spent about 3-4 hours per week watching these combined yet they add a massive £30 per month onto our bill. Talk about money wastage.
So we have slashed these off of our bill and we are looking at changing providers soon as well as loyalty gets you nowhere in this game my friend.
Not only will we save money by switching and therefore being NEW Customers, but we will also do this via a Cashback app. I love cashback and we could potentially earn £100 just for switching providers.
Netflix is £10 per month and we also have Amazon prime at a similar price so we have almost everything we need. We could even end up canceling altogether if we dont find the right deal for us.
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Ahh, the dreaded gym membership, possibly the biggest money wastage in the history of wasting money. The real issue here is you actually feel bad canceling. This cloud of despair creeps over you as you realize by canceling you have totally failed with your fitness goals. You are doomed to be a couch potato for the rest of your days.
So the £30 per month keeps coming out of your account and heck you may even go once a month to tell yourself its all worth it. (It isn’t).
The trick here is to be totally brutally honest with yourself. Are you going to go 3 times per week every week because if not only will you not reach your fitness goals but you will also be spending £300-500 per year not going.
Can you achieve fitness another way? Take my journey into fitness. I was at a gym and paying £30 per month and it was ok. I went 2-3 times per week but it was quite small and I didn’t like being in close proximity to too many people so I quit.
What happened was I ended up popping on a pair of running trainers and that is how I get my fitness kicks these days. It is free and easy and I can steer clear of other sweaty people. Unless I’m running in a race of course.
I’m guilty as charged your honor. On a hot summer day especially after I have been out for a nice run I love a nice cold bottle of water from the shop.
This is just wasting money. I could quite easily pop home and get my filtered water out of the fridge and pour myself a glass.
A Brita water jug is around £10 and the filters are about half that price. For the cost of 4 or 5 bottles of water, I can have a jug and filter which will last for weeks and just filter my tap water and leave in the refrigerator to be nice and cold.
Also not buying the bottled water means you are putting less plastic out there which means technically you are saving the environment. (Go You!!)
Most forms of public transport are getting more expensive and not only that but providing a worse service. I was shocked recently when I had to go to a town near me which is about a 20-minute journey by train. It was £8 for a return ticket.
That is bad enough but when you factor in that at peak time it is nigh on impossible to get a seat this means you are paying £8 for a 20 min journey for which you have to stand up.
Buses are cheaper but not by much and cabs you can forget about if you are trying to save the pennies.
You might think your own car would be cheaper and it can be but generally, by the time you have factored in insurance and fuel and maintenance costs it also ends up being a huge expense.
I work about 2.5 miles from my house but every morning I jump in my car without a second thought. This is from someone that can easily run that far as well.
My simple advice to save wasting money would be if you can walk your journey and it isn’t horrendous weather then why not just take the walk. Your body will thank you for it and you may save yourself a few pounds.
One of my colleagues lives 1 mile and about a 15minute walk from his work and still drives in. That’s crazy and such a waste of money.
Ok so I dont mean you should stop eating. I mean we as people waste entirely too much money on food. How much of that food ends up in the bin anyway.
Aim to cut down on the amount of food you make. When you make too much one of two things happens. Either you eat it all and this is no good for your health or waistline or you throw the remainder away which is just wasting money.
You should also try and make lunches for when you are at work. This will stop you from going to the shop for premade sandwiches and or going to the food truck when it comes round your offices and spending way too much money on food and drink.
Aim to drink water which is probably in a dispenser at your work or you could bring in your own. Also, make a healthy lunch from home which is going to fill you up. This will decrease the likelihood of you spending money on snacks.
Printed newspapers have been made pretty much redundant. I used to spend around 0.50 pence every day buying the newspaper. Add this up and it totals around £110 per year.
Nowadays nearly everyone has a smartphone and most major newspapers are represented on the app store with their own apps.
They do obviously have targeted ads pop up every now and then but I read the Daily mail on most days and although sometimes it seems to have not been proofread first it still means I can access all the daily world events without having to spend a penny.
Some of the paper apps are great some not so much but if you have to switch papers just to get a great news app experience then it is totally worth it due to the money being saved.
I get it, You are like me. You cannot function without a gallon of coffee in the morning to kickstart your day. The only issue with this is you tell yourself it is your only vice. “Its just one caramel latte a day I dont see your problem”.
Well, the problem is this. If you are spending say on average £3 per day on a coffee then that’s £60 per month for your average work month.
There are of course ways of cutting this unessecary expenditure. You could just choose to have a coffee before you leave the house. This is the most cost-effective way of doing it.
You could always sign up for your particular favorite coffee house loyalty program. This could earn you the odd free coffee.
Most coffee establishments will do reduced prices if you bring in your own mug. Also if you just go for plain filter coffee it is way cheaper and not only that but most places will do unlimited refills while you are on the premises.
Just think £60 per month is around £700 per year. That’s enough for a cheap holiday.
Brand Name Medicines:
If you are anything like me I love a medicine cabinet to be full of everything I might need. For example, I do get Indigestion quite badly sometimes so I love to swig on Gaviscon.
I recently went to my local superstore to get some more and they had sold out. I got the cheaper version which was around £2.50 instead of £5 and when I got back and checked with the old Gaviscon bottle it has exactly the same ingredients.
You are paying for the name. Why spend £2.50 on headache tablets when Paracetamol can be had for 0.20 pence. The same goes for most medicines. Make sure you get the local shop’s own brand or a non-name brand as this will save you an absolute fortune.
And that is it. 11 Things you are wasting your money on. I’m guessing you are guilty of at least 5 of these money-wasting items and I’m hoping that you change your ways and save some money not only this year but for the coming years as well. Never pay more than you have to.
If any of you have your own stories of how you have been wasting money then I would love to hear them in the comments section.