money down the drain

Stop Paying for Things You Don’t Need

A big coordinated garage sale in my neighborhood gave me a surprising wake-up call. It’s one thing to see a family’s stuff spread out in the front yard, but quite another to see a whole neighborhood’s castoffs at one time. All I could think of as I walked from one yard to the next was all the dumb decisions that led to this colossal display of stuff— purchased with dollars, now offered for pennies. 

money down the drain

Imagine how much cash you’d have right now if you could get a do-over on all the thoughtless purchases you’ve made in your lifetime. Me? I’d be one wealthy woman! 

I can’t tell you what those little money wasters are in your life (the five pairs of black shoes in your closet? dozens of owl figurines for your collection?). All you have to do is take a walk through your house to see what you’ve been throwing away your money on.

Me, I’ve learned that there are a lot of “conveniences” I don’t really need. Once you put an end to them, it’s like giving yourself a raise. Just think about it. If you can cut out the stupid stuff, you may have the money you need to start a serious savings program or to pay down your debts. Read and learn from my mistakes. 

1. Extended Warranties

Generally, they’re not worth the money. (The only thing I now have a warranty on is my laptop computer, and that’s because I practically beat it to death.) If a new gadget or appliance is going to fail, research tells us it will do so during the manufacturer’s warranty period or long after the extended warranty has expired. That makes extended warranties, which can cost anywhere from $5 to hundreds of dollars, a big profit center for retailers and a pretty useless expense for consumers.

Get Smart

If you’re worried about a breakdown, take the money you’d spend on a warranty and stash it into a special savings account. If your item fails, you’ll have the money to repair it. If not (which is more likely), in three or five years when everything’s gone well, you’ll have stashed away a nice little nest egg.

2. Gym Fees

The sales pitch is compelling and the promise of better health is hard to deny. But getting roped into a legal obligation to pay a big monthly fee for the next two or three years—whether you use the gym or not—makes no sense.

Get Smart

Find a gym or health club that requires no contract (you pay by the month if and when you desire). Or don’t pay at all: There’s a big wonderful world out there where you can walk, jog or run for free!

3. Fast-Food Runs

You know how ridiculous it is to spend $3 or $4 for coffee—over and over, day after day. But how about the other snacks and food purchases that can cause your bank account to evaporate? A morning egg sandwich here, an afternoon bag of chips there. Before you know it, you’ve spent $20 or more a week.

Get Smart

Before you leave the house in the morning, figure out how much cash you’ll need for the day, then take only that amount with you. Bring your own snacks and pack a brown-bag to reduce costs even more.

4. Phone Apps and Games

OK, so it’s cool to have apps, filters, and games on your devices. And sure, $2 to $3 a pop or $10 a month may not seem like a lot of money for so much fun. But watch out. You can blow through a lot of cash in no time.

Get smart

Make a hard-and-fast rule that you do not pay for apps or games—then find them for free. They’re out there; you just have to search for the ones that work on your particular phone and with your service provider. Check the Apple Store for iPhone, Google Play for Android.

5. Fees (Late, Over Limit, or Worse)

Not paying attention to your bills is a big mistake these days, when banks are doing all they can to boost their profits. Getting your credit card payment in late can mean a $39 whack on the wrist. Being sloppy with your bank account and bouncing a check can cost you around $27.

Get smart

Find your inner private detective. Go over every statement and question every entry. Don’t know what it is? Find out! Get bold! If you’re charged a fee for something silly like allowing your balance to drop a few bucks below the agreed-upon minimum or sending your payment a day late, call customer service. Explain that this is so not like you, as evidenced by your clean record. Then ask them to waive the fee or reverse the charge if it has already been assessed to your account.

6. Rental Car Insurance

Saying yes can add anywhere from $9 to $30 or more per day to the cost of the car. That’s a waste if you carry insurance on your cars at home, or if you pay with a credit card that offers rental car insurance as a perk. Your existing auto policy may be all you need if it includes third-party liability, collision and comprehensive coverage for rentals (most do!).

Get Smart

Before you even get to the car rental counter, call your insurance agent to make sure you’re covered. Check your credit card’s terms and conditions, too. Prepare to be surprised.

7. Computer Software

You got a great deal on that new computer, so why go broke loading it up with software? Before you spend a dime, take a look at all the freeware out there. You’ll find programs written by enthusiasts and distributed with no strings attached: games, graphics, office suites, fonts, every kind of desktop tool and gadget imaginable.

Get Smart

Get yourself into search mode to find free versions of otherwise pricey programs you’re interested in. Take Adobe Photoshop for example. It’s cool—perhaps even mandatory if you’re a professional. A quick search for “free Photoshop alternatives” turns up a bevy of options for that super pricey program. Give that a try and by the way, my favorite Photoshop alternative in that list is Gimp.org. Totally free and quite awesome.

8. Unlimited Texting

Most cell phone plans include a certain number of texts with the basic service. Texting is fun, but it can get out of control in a big hurry. Upgrading to an unlimited plan can add $15 (about $180 per year per phone on your cell plan) just so you can engage in a lot of meaningless chatter. How dumb is that?

Get Smart

Forget the upgrades. Scale back to a limited number of text messages for you and the kids, too. Or consider a lesser-known cheap basic prepaid cell phone plan. A little self-discipline could be a good thing for everyone involved.

9. Bottled Water

You’ve got to hand it to the bottled water industry. They’ve managed to convince otherwise rational people to pay around 800 times more to purchase water in a bottle rather than get it from the tap. These days a 16-oz bottle of “spring” water goes for about a dollar, which works out to about $8 a gallon—twice the cost of milk, and roughly on par with soft drinks. Home delivery is less per gallon, but still around $40 a month, according to online averages. However, 16 8-oz glasses of tap water cost about a penny. Bottom line: You’ve heard it before, but now you need to do it. Lay off the bottled water.

Get Smart:

The next time you feel thirsty, turn on the tap. Don’t like the taste of your tap water? Invest in a filter pitcher or install an inexpensive faucet filter. You’ll still come out ahead.

10. Music Downloads

Unless you’ve got money to burn, paying $1.29 or more per tune can add up. Or even $9.99 a month for an unlimited service. But not to worry. There are plenty of ways to get free music downloads, all totally legal and easy to access.

Get Smart:

Check out the free classical catalog at ClassicCat.net. Want country? Check out the huge library at Free Music Archive. Your Amazon Prime membership includes free music downloads.  Or Google the words “free downloads” plus your genre of interest.


 

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9 replies
  1. Joan devore says:

    Thanks for the computer program tip. Bought a new laptop and found that I could not obtain “works” program any more. With your tip–I found several possibilities. Thank you for all your tips over the years. Daily reader

    Reply
  2. Mrs. M. says:

    I do occassionally pay for the extended warranty on certain items, and I’ve used them many times… a dehumidifier, vacuum cleaner, coffee maker, etc. The way to make it worthwhile it to actually USE the warranty when there’s a problem with the item. But, I do understand that it’s a waste of money if it is forgotten about and never used.

    Regarding the free software, I use a really old version of Quicken for our finance tracking, and it still works great for our needs. However, i’d like to help our adult children get on track with their finances (they’re willing to learn), but now that type software has to be paid for annually.
    I’ve searched and found several free options. Do you have any recommendations for free finance software?
    Thanks, Mary, for all your many tips and financial training! I’ve learned so much from your books and emails!

    Reply
  3. nancy says:

    My Mother used to wonder about people complaining about the price of gasoline while drinking a bottle of expensive water.
    We are remodeling our house and went to the dump yesterday with construction trash. Seeing all the recently treasured items people were throwing out of the back of their vehicles was something to ponder. I am going to try hard to remember this everytime I go to Home Goods or anywhere for the new rooms we are making. Imagine this item on a garage sale table or just being thrown out.

    Reply
  4. Jenni says:

    We recently had to contact the credit card company about a late fee! The payment was mailed in the day after the bill was received, but with the state of the US Mail these days it was LATE!
    They reversed our fee and have included a note with the bill that addresses this problem now. Be careful with that, too.

    Reply
  5. Peg C.S. says:

    Re: Rental car insurance, I spent some time quizzing a helpful rental agent about the difference in coverage between use your own and the one you buy from them. He said that one problem many people do not anticipate is that in case of serious damage to the rental car, in the fine print, the renter is liable for the daily cost of the car while it’s being repaired. Your own policy may not pay for that.
    I would love to hear someone’s comments on this thought.

    Reply
  6. Linda says:

    I remember when the bottled water craze hit, a comedian on TV asked, “When did we all get so thirsty?” I’m still drinking tap water. I agree about the breakfast sandwich here, the afternoon snack there, the expensive coffees. It drains your money fast. I don’t do warranties and added insurance either.

    Reply
  7. Lori says:

    The plastic bottle is so true, and the easiest Skippack expense that helps save our planet. Another advice from me? Don’t look at sales flyers, don’t go to the stores, look less online. Instead go for a walk outside. It is amazing how much you can save. You aren’t really saving if you get “a good deal” of you didn’t need it in the first place.

    Reply
  8. Kathie says:

    Another one to add to the list is life insurance if you haven’t purchased a plan when you were young. I was in a family plan with my ex-husband. Before we got divorced he cancelled the policy and I had to look for my own insurance. Being in my 60’s, I found it was much cheaper to put the amount of my previous premium into a savings account for my final destination. I already have more than enough saved for final expenses with leftover funds and I’m not dead yet. Of course, I don’t have any other loans or a mortgage to pay off either.

    Reply
  9. Sue says:

    Regarding rental car insurance … I have never paid a rental company for their coverage, and used to get by with my own auto policy. However, now that our cars are older (well maintained), we have minimal coverage on them and lost that rental car coverage benefit. I also do not carry a credit card that offers this benefit.

    After some searching, a few years ago I found www.insuremyrentalcar.com (underwritten by Chubb) and have used it several times. The rental companies question it, don’t like it (they aren’t making money off you), but have to allow it because it is legitimate coverage, and much cheaper than theirs!! I just print the policy (17 pages!) to show them at time of rental, and they have accepted it. There are probably others (Allianz Travel comes to mind). Luckily I have never had to file a claim with this coverage, I guess that would be the real test, but I have felt safer having it.

    It would be great if you were able to check these out in your thorough way, and verify that they are worth buying for those who do not have rental coverage on their auto policy or credit card.

    Thank you!

    Reply

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