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We’ve all spent money on things that we don’t need. It happens. In fact, it’s hard to avoid. That said, there are definitely steps you can take to cut way back on the money that you spend.
In this post, I’m sharing a lot of different ideas and ways of looking at things that will help ensure that you waste a lot less money. Now, before we dive in, I want to give you a heads up that this post is more about mindset than it is about actionable tips. That said, there are certainly some very actionable takeaways included below.
By the way, if you’re looking for tips on how to save money, check out my free eBook of money saving ideas.
- Track Your Spending
- Plan Your Meals Ahead Of Time
- Wait A Day Before Making Purchases
- Consider How Many Hours You Need To Work To Pay For Each Purchase
- The Small Stuff Adds Up, But The Big Stuff Has A Major Impact
- Shop Used
- Sell Old Things, When You Buy New Things
- Ditch The Brand Names. Maybe…
- Buy Quality Things That Last
- Fill Your Time With Low Cost Hobbies And Activities
- Avoid Shipping Fees
- Take A Hard Look At Subscriptions
- Shop For Auto Insurance
- Final Thoughts
Track Your Spending
It’s hard to improve at something if you don’t measure it. So, if you feel like you’re wasting a lot of money, it can be a really good idea to track your spending. That way, at the end of the month, you can look back and flag anything that is really wasteful.
Whatever your baseline is now, don’t beat yourself up. You have to start somewhere, and the first step toward reigning in wasteful spending is to see just how much of it there is to begin with.
Plan Your Meals Ahead Of Time
One of the easiest ways to waste money is to start thinking about what to have for dinner when it’s dinner time and you start to feel hungry. It’s really easy to pick up your phone, tap a few times, and have something delicious show up at your door in half an hour. The thing is, you pay a lot for this convenience.
I used to fall into this pattern all the time. I’d go to the grocery store, pick up necessities like coffee, bananas, cereal and a few other things that I always like to have on hand. Then, I’d plan maybe two simple meals and buy all the ingredients needed to make them.
For all of the other meals that would come up throughout the week, I’d order pizza, take out, or go out to eat. Turns out this is a huge waste of money, and incidentally not the healthiest way to live either.
These days, I’m much better about planning ahead. I’ll still go out to dinner or get take out once in a while. But, now, I do it because I enjoy it and not because I’m in a pinch and have no food in the house. I also do it a lot less.
If you find yourself running out of good meal ideas, check out $5 Meal Plan. For $5 per month, they do all the meal planning for you. It’s pretty cost effective since the meals they include only cost about $2 per person. Plus they have a two week free trial. So, if nothing else, you can get some free ideas.
One other advantage of planning your meals ahead of time is that it puts you in a position to plan your grocery shopping a bit better. That way, you’re much less likely to roam around, making impulse purchases, and ultimately forgetting to pick up the things you really need. Believe me, I speak from experience.
Wait A Day Before Making Purchases
We live in an on-demand world, and that can be a wonderful thing. If you think of something you want, all you have to do is to pick up your phone, and through the magic of the Internet, it will be delivered before you know it.
This really is amazing. But, the amazing convenience of online shopping has also created limitless opportunities to make impulse purchases. It’s also a great way to waste money.
One way to combat this is to force yourself to wait at least a day (and ideally even more), before buying something that you don’t need. You would be surprised at how often the thing that you really want right now, turns out to be something that you don’t care about at all tomorrow.
Consider How Many Hours You Need To Work To Pay For Each Purchase
One mental trick that I sometimes use to stay disciplined is to think of things in terms of hours worked rather than in dollar amounts. Let’s say that you make $2,000 per week after taxes and that you work 40 hours per week. Well, you’re making $50 per hour.
Now, let’s imagine that you’re thinking about buying a new car for $30,000. On the face of it, you might think that’s a reasonable price to pay for a new car. But, consider how you frame it.
You have a couple of choices.
One choice is that you continue driving your old car.
The other choice is that you buy the new car, and work for 600 hours to pay for it. That’s every working hour for the next 15 weeks. Does that seem like a reasonable sacrifice for the pleasure of driving a new car? For some people, it does. For me, it doesn’t.
The Small Stuff Adds Up, But The Big Stuff Has A Major Impact
People always talk about watching every penny. You might hear the story of how someone that spends $5 a day on coffees or lattes, ends up spending over $1,800 per year on this daily indulgence. It’s true, the small things do add up.
But, don’t lose sight of the major purchases. Let’s go back to the car example for a minute, because it’s something that comes up fairly infrequently that ends up costing a ton of money.
I know a lot of people that buy new cars every three or four years because they like driving new cars. I mean, really, who doesn’t like having a new car?
Cars are also one of the easier purchases to justify. After all, when you buy a new car, you trade in your old one. So, you’re not out of pocket the entire purchase price, right? While this is true enough, chances are that your trade-in covers less than half the cost of the new car. So, you’re still spending kind of a lot of money.
Let’s say that you buy a new car every four years and your out of pocket cost (after trading in your old one) is $20,000. So, you buy one today for $20,000, then in four years you spend another $20,000, and in eight years, you spend another $20,000. That’s $60,000 in total over eight years.
Now, instead, what if you buy a car for that same out of pocket cost of $20,000 but you keep it for ten years. Well, over that same eight year period as above, now you’ve spent only $20,000 instead of $60,000.
Take this a step further. Instead of spending $20,000 on a new car once every ten years, what if you buy a three year old car for $10,000 and hold onto it for ten years. Now, you’re spending $10,000 over eight years while someone else is spending $60,000.
So, by foregoing this luxury, you’re saving $50,000. That’s a lot of lattes.
Now, my point isn’t that you should forgo everything enjoyable in life and only focus on saving money. That’s no way to live.
Rather, my point is that if you get the big things right, you can be a little more lenient on the small things.
So, pick the ones that matter to you. If you love driving or have a long commute and spend a ton of time in your car, maybe it’s worth it to you to have something nice and new. Just make it a conscious choice, rather than doing it out of habit or because other people are doing it.
Look, there are some things that I personally like to buy new and other things that I like to buy used. You’ll probably never catch me wearing a second hand shirt. Furniture on the other hand, I’ll buy used all day long.
Tech and electronics can be a great thing to buy used because when you buy one or two year old technology, you can save a ton of money.
Now, even within tech, there are some things that I’m reluctant to buy used. For example, I tend not to buy used laptops. I don’t know enough about them to really tell if I’m getting a great deal. Plus, I do worry that they’ll be slow and clunky sooner if I buy used.
On the other hand, things like TVs, smart speakers, and sound bars are things that I love to buy used. They tend to last for a pretty long time, and the improvements in the latest and greatest tech aren’t all that important to me personally.
Facebook marketplace is also an awesome place to buy things from people that live nearby at a really low price.
Sell Old Things, When You Buy New Things
Oftentimes, when I go to buy something that I really don’t need, I force myself to fund it by selling something else that I don’t use anymore. So, in a way, I’m still wasting a little money, but at least I’m finding a way to cover the cost.
Let’s say that I want to get serious about making good coffee at home, and find a new coffee maker for $200. Now, I have a coffee maker already but it’s a little old and lower quality.
Well, I’ll look around the house and sell $200 worth of other things first. I have kids, so it tends to be really easy to find board games, puzzles, and other toys that they’ve outgrown and no longer use.
But, I sell a fair amount of my old things too. I actually have a set of golf clubs that have been sitting in my garage untouched for five years that would probably make a good starter set for someone else. Suffice it to say, they aren’t going to be there for a sixth year.
Ditch The Brand Names. Maybe…
Brand name products tend to cost a lot more than their unbranded counterparts. So, on the surface, it can seem like a waste of money to buy brand names.
Personally though, I think that purchasing generic products only saves money some of the time. Other times, the branded product actually is much higher quality and worth the extra money.
I’ll leave it to you to decide when it makes sense to go generic. But, at the very least, I thought it was worth flagging this, because sometimes branded products are a waste of money.
Buy Quality Things That Last
I often think buying quality products makes good fiscal sense, and buying cheap products can be a waste of money.
Clothing is one area that comes to mind. Do you buy jeans that will last six months? Or, do you go for a higher quality pair that will last for six years? Even if the higher quality jeans are twice as expensive, you’ll save money in the long run.
Beyond clothing, there are some things where quality makes an even bigger difference. My wife and I once picked up a used coffee table and end table set for $100. It was really sturdy, well built, and probably ten years old when we bought it. We owned it for seven years, and gave it away to a friend when we moved to a new home. That said, it was still in good condition when we gave it away. I believe, if we tried to sell it, we would have gotten at least $100 for it.
There is something to be said for buying high quality, used products. You might end up getting your money back or even making money when you sell them again down the road.
Fill Your Time With Low Cost Hobbies And Activities
One of my favorite theories from economics involves the concept of crowding out. In economics, this refers to government spending in one area which may then crowd out private sector activities.
In my life, I think of crowding out in a different way. I try to crowd out the things that I don’t want in my life by filling my time with things that I do like.
For example, let’s say that I watch a lot of TV and want to cut back. One way to do this would be to simply state my goal of watching less TV, and then to resist the urge to do so. If I go about my goal of watching less TV in this way, it really just becomes a question of will power. Maybe I will succeed and maybe not.
Now, alternatively, let’s say that I tend to watch TV right at the end of the work day as a way to unwind. Well, I might just start scheduling other activities during that time slot instead. That could mean making some fun dinners, playing tennis, going running, or taking up a new hobby. By pursuing one activity (i.e. tennis), I’m crowding out another one (watching TV in this case), and cutting back on TV becomes rather effortless.
The same can hold true when it comes to cutting back on your spending. If you consciously fill your time with low cost hobbies, you’re going to be way less likely to online shop out of boredom.
If you really want to take this to a new level, maybe you spend some of your free time with money making activities. Sometimes at the end of a long day, I’ll throw on a podcast (for free) and fill out surveys or do something else that is reasonably easy and low intensity. It’s enjoyable and profitable. Win, win. Survey Junkie and Swagbucks are both great options.
Avoid Shipping Fees
Shipping fees can feel like a total waste of money, especially given the prevalence of free shipping these days.
Careul trying too hard to avoid these though. I can’t tell you how many times I’ve gone to buy something online for $10, and then noticed that the threshold to get free shipping is $50. Well, before you know it, I’ve gone and spent $50 to “save” a $5 free shipping charge.
So, how should you avoid shipping fees? You might shop around online to see if you can get the product from another site for the same price and with free shipping. If that doesn’t work, try searching for coupon codes. Somes sites will even give you free shipping if you register with them rather than checking out as a guest.
If none of these things work, you can consider driving to buy the product at a brick and mortar store. Of course, you want to consider the distance and the value of your time. It might not be worth spending an hour driving, parking, and shopping in person just to save a few bucks.
If all else fails, go ahead and pay for shipping. It’s not the end of the world if you do it once in a while.
Take A Hard Look At Subscriptions
Subscriptions are such an easy way to waste money. How many gym memberships go unused every month? How often do you sign up for a monthly subscription only to stop using the service but forgetting to cancel it?
Beyond subscriptions that you might actually want to cancel, I’d be sure to check on your phone bill every once in a while. You might find that you’re on WiFi more these days and no longer need an unlimited data plan.
Then there’s cable. Don’t even get me started on this one. Unless you really need live TV for sports or news, there is probably a much cheaper streaming service that will satisfy your needs. For that matter, live streaming is really making the case for cable TV harder and harder to make these days.
Shop For Auto Insurance
Ever watch one of those Geico commercials that says 15 minutes could save you 15% or more on car insurance? Well, it’s true and it works if you try calling other insurance companies too.
Paying too much for car insurance is about as close as you get to just lighting money on fire. It’s possible that you can get the same exact coverage for less money. So, it’s definitely worth trying once a year or so. It sounds mundane, but it’s pretty low effort.
If you’re reading this post, then you’ve clearly got a desire to stop wasting money. That said, it’s really easy to read a post like this, and then go on with your day.
If you’re serious about trying to stop wasting money, I’d urge you to start tracking your spending and then build a budget. You might even include a budget line for splurges since none of us are perfect and you want to allow for a little wiggle room.