When we think about frugal living, there are a number of easy things we turn to to cut back on costs: cheaper food, using less car, eating out less.
But what about all the unconscious spending habits we’ve acquired, or those other ways of parting with our money that we often forget about? For a moment I want to make you think about some of your own “money traps” – places where your usual rules seem to “go out the window” at just the wrong time. Here are some of mine.
Try To Avoid These 10 Dumb Ways of Wasting Money
- Tourist traps. The main culprit here are the “gift shops” which persuade you into thinking that you’re never going to be able to remember the nice time you had unless you buy the t-shirt or gizmo, which of course, is only available on location at the site. “Get your picture taken next to the ____” or sites located in the middle of nowhere that have one tiny cafe that sells water for $5.00 a bottle – take your own picture and bring your own water! Gift shops are great – for looking maybe. Next time you’re in one, try to remember where all that stuff is going to go when you get back home – or if there’s even enough room in your suitcase for it in the first place.
- Travel Books and Maps. While maybe these shouldn’t be considered an outright “waste” of money, I think they’re very unnecessary for a number of reasons. If you spend on these at least don’t buy the brand new ones. Travel books go out of date; they’re heavy (when you want to travel light); if you have a laptop you can always or usually find an internet connection somewhere and get your info that way. Do your research online – all maps are also online. You can print them off. Finally, just talk to the locals as well for great, current ideas on how and where to spend your time. Besides, are you ever going to use that travel guide again once you’re back from vacation?
- Library/video rental fines. An obvious one, hopefully a bit easier to avoid these days with the slow disappearance of “late” fees. I bet I’ve lost at least a thousand dollars on this mistake.
- Speeding/parking tickets. Luckily I’ve only had about three of these in my life, but it still doesn’t feel good to have to fork over $25-$80 because of parking in the wrong place or not coming to a very full stop. This one’s a no-brainer if you’re trying to save money.
- Getting ripped off. Recently I tried a new Vietnamese restaurant in my area and had the pad thai. Within five minutes of leaving the restaurant (after not being able to finish the meal), I became violently nauseous. Unfortunately, I had to get sick in a public place. Luckily, I felt quickly better as soon as the food was out of my system – the problem was obviously something in the food. I spent $15 on that meal, but I didn’t go back to try to get my money back. I should have. I did end up going back the next day to tell them about it, but I couldn’t bring myself to ask for the money. Make sure you eat your food slowly (for this reason among others!) and make sure you’re getting value for what you pay for. Check your receipts and statements and inquire about anything that doesn’t make sense.
- Get Rich Quick (or Eventually!) Services, aka “How to Make Money Doing X”. Sometimes it makes sense to spend money to make money. Other times it doesn’t. Unfortunately it takes some experience to be able to make a judgment either way. I confess, I once bought one of those “adsense secrets”-type books for ten bucks. I wish I hadn’t. All that information is already on the web somewhere if you take the time to read it and filter it all out and test it for yourself. Other bloggers will help you too, and often post about their experiences.
- Buying too much furniture and “house stuff” before you’re ready or able to settle down. This might apply more to those just starting out, but I made the mistake of getting “house-happy” etc. and buying great living accessories when I didn’t even have a full-time job to pay for them, let alone a mortgage or long-term lease. And if you’re already settled in a house, reconsider what you really need to fill it with. Don’t spend on kitsch knick-knacks and decorations. Sometimes less is more, and I think that applies here. Keep your home a minimalist oasis, a place for relaxation. It’s more practical and will help energize your life as well as save you money. Remember, you have to take care of all these things and someday you’ll probably end up just selling many at a garage sale, so just don’t buy them. Invest that money instead.
- Skip the DVDs, CDs and Magazines/Newspapers. Unless you have a professional need for these, it’s much easier nowadays to rent or buy/watch these and listen/read online for a fraction of the cost of buying them. No, I’m not advocating stealing them by burning them for free, despite what “open-source” advocates argue for. Producers need to be paid for their work. I’m just saying that not only is it less expensive for you, but you don’t have to worry about storing them or misplacing them. Simplify your life! Help the environment. It’s not just the paper but all the ink that goes into these publications that matters.
- Gift-giving for the Wrong People and the Wrong Reasons. Gifts make sense when they’re genuine and meaningful, not when they’re expected or part of some social obligation. Opt-out of Hallmark cards and token party gifts except in cases that really reflect your values. Don’t be guilted into spending money on gifts, especially because these so often coincide with the heavily-marketed calendrical holidays that usually go hand-in-hand with candy so you can thin your wallet and loosen your belt.
- Unexpected purchases under $5.00. These are tricky and can’t be listed in advance. They’re hard to notice because they cost so little. We won’t even think about buying them because it feels like the price doesn’t matter – it won’t make much of a dent on our card, after all. I’d say it might be worth trying to make a list of all the things you buy for less than $5.00 and see what you learn. How much of it is really necessary? Are you spending a lot more on gum than you think? How will it make you feel to know that at the end of the month you not only ate 20 chocolate bars but spent $35 to do so? Uugh.
Some purchases might seem extravagant (a Starbucks latte) but might add quite a bit to quality of life (spending an hour chatting/reading in the cafe). If a purchase adds to your life experience or education, then I’d say it’s giving you something back. But if you can find an effective, cheaper substitute for it, then I’d try to do so.
What are your money traps? Do you share any of the above? I’d love to hear your thoughts in the comments below.
The Weakonomist says
My dad got a speeding ticket a couple of weekends back. The lawyer to get it dropped will set him back $300+. Definetly not worth it, especially since speeding burns more gas too.
The Weakonomists last blog post..Six Lessons Star Wars Can Teach Us About Money
Wojciech @ Fiscal Fizzle says
#7 hits home hard. Thankfully, most of our furniture is hand-me-downs from friends and family, because after the amount of times we’ve moved, each piece has more dings and pieces missing than I can count.
I’m not buying a single piece of furniture, save maybe for an office chair, until we have a permanent home.
You got me at #1, congrats :p
I went to the Dominican Republic and bought two of these pictures.
But where else will you have a professional photograph of your g/f taken… on the beach… with 2 parrots on her feet and shoulder (in one)! Or a monkey on her head (in the other)!
Nice list. My addition is the ‘single pack’ servings of crackers, pretzles, potato chips, etc. They’re about 4X the price per pound of the larger size, and you can send the kids to school with a little bag or re-usable container with a portion. Takes a few seconds to put them in the lunch bag.
My town is part of a library network that lets you reserve books or videos on line. A bit of patience, and the DVDs are free for a week.
Nice post and several interesting bits of advice that look good. You *do* need to understand something, though. “Open Source” (and it doesn’t need quotes–it’s a real phenomenon) is not a group of piracy advocates. Open Source is a movement to make source code for software openly available. Consequently, this code is free, but there’s nothing in the ideology or method of development that says that piracy is ok.
Ditto Matt. Open source and piracy are entirely different altogether. I highly recommend reading up on what open source is and taking full (legal, of course) advantage of it.
One of my money traps is going to the drugstore and waiting for a prescription to be filled. I just fell into the trap again this morning!
I don’t like coming back to get my meds, so I will hang around and wait. I get a shopping cart and walk around. I always see something that I need (or think I need): cat food tins, single wrapped tissues, make-up, nail polish, the latest People magazine, even vitamins (when I know I can buy them cheaper elsewhere). I often end up spending 60 bucks in addition to the medication! UGH.
We had been wasting $85 per month on Comcast Cable when we decided that the next time it went up even one cent we’d drop to basic service. In March, 2010, we made a guess that it would go up so we downgraded to basic for about $15 per month. Sure enough, we got a letter 3/25 that they were raising what had been our old rate by $3 per month. We were thrilled to have beat them to the punch.
I’m an attorney for a boutique private bank. I’ve seen the habits of people who are worth millions and have learned from talking to them how they got there. They got there by not wasting a dime, foregoing short term pleasures for long term gain, by investing instead of spending. You can never make money by spending it.
Over a lifetime, you don’t lose $1 million by misplacing it. You lose it $50 at a time, buying things you don’t need and will throw away. Or by paying Comcast for worthless programs peppered with commercials and reruns of the same films. Cancel or downgrade cable today and invest the money in your retirement plan. You can bet that’s where Roberts and the other Comcast executives put the money they drain from you each month.
Good Luck. Change your habits today and don’t wake up one day at age 50 or 60, having earned a lot of money, with nothing to show for it but old Comcast bills and a bunch of receipts from restaurants and bar rooms.