You want to save your money for the big things in life. But, there are so many things that want you to part ways with your money sooner and not later.
Money mistakes such as a $4 coffee every work day or a $1 lottery ticket here and there might not seem like a big deal. It’s when you add up the cost of all those purchases that you realize they are all a waste of money.
If your goal is to inflate your savings account or put money aside for a specific goal, such as buying your first home, stop wasting your money on these items:
Coffee You Don’t Make at Home
Coffee is expensive no matter whether you prepare it at home or buy it from a cafe. Although a pound of coffee can cost around $10, depending on how fancy you like your beans and where in the country you live, buying a coffee drink from a cafe will always cost more.
A fancy latte from a chain or privately owned coffee shop can cost between $4 and $5 per cup. If you buy just one latte a day, five days a week, you’ll end up spending more than $1,000 per year, just on beverages.
I’ve got a secret for you: your work clothes probably don’t have to be dry cleaned.
Unless the label says “dry clean only,” you can more often than not get away from washing your dress pants, button-up shirts and dresses in cold water. Skip the dryer and hang or lay flat to dry to extend the life of your clothing.
Dry cleaning might not seem like it costs a lot of money, but it does add up. If you dry clean a $50 skirt four times a year at a cost of $5 per clean, you’ll end up spending an extra $20 each year on the skirt.
To avoid dry cleaning bills, check the garment’s tag before purchase. If it says “dry clean only,” leave it on the rack.
Bank fees can really eat into your budget and there’s no reason they should. Your bank might charge you a fee just to keep your account open or it might charge you a fee if you use another bank’s ATM.
If your bank does charge fees, consider switching to one that doesn’t or switching to a credit union.
Penalties and Late Fees
Late payment penalties are a complete waste of money. You are paying for your own forgetfulness.
You gain nothing from paying the late fee except maybe a feeling of annoyance at having to pay it. The best way to avoid paying penalties is to set up automatic payments or bill pay reminders, so that you are never late again.
Fancy Cable Channels
The premium cable channels seem to offer a lot. You get to watch high quality, engaging shows and see movies and specials before anyone else. But, paying for premium cable channels is one of the top money mistakes people make.
Instant video streaming and mail-order DVD rentals make it possible for you to watch the shows once only available on premium cable, without having to shell out $15 each month.
Whether you prefer scratch-off tickets or the daily number, buying lottery tickets on a regular basis is a big waste of money.
Your odds of winning big are somewhere in the neighborhood of 1 in 13 million. With odds like that, the chances of you recouping what you spent on those tickets are slim to none.
The next time you feel tempted to take a chance on lottery tickets, put the money you would have spent on those tickets in a savings account instead. You won’t have the chance to win a million dollars, but you also won’t be throwing your money away.
A Too-Good-to-be-True Offer
My husband and I were recently approached by a saleswoman who had an “amazing” deal for us. For just $100, we could stay in a deluxe hotel on the beach in Virginia during the off-season.
The catch was that we’d have to sit in on a 90 minute presentation about a condo timeshare.
The deal was tempting – $100 for a three night trip – but we turned it down, since we hadn’t budgeted for an extra trip. We had no need for it.
Any time a salesperson presents you with an offer that seems fantastic, look at the details closely. Odds are pretty high that the deal will benefit the salespeople more than it does you.
The Extended Warranty
Do you need to purchase an extended warranty? No, but the stores selling you the product don’t want you to know that.
When you purchase the warranty, you usually end up paying half of the product price again. The store you buy the warranty from lucks out, as most people never need to use it.
Most products will last for years and not break down. Save the money you’d have spent on the warranty and put it to better use.
Snacks at the Movie Theater
At the grocery store, you can get a pound of popcorn kernels for around $1. At the movie theater, the large popcorn can cost between $6 and $10.
The next time you head out to the movies, skip the concessions and you’ll end up spending half as much. If you don’t think you can go two hours without a snack, tuck a candy bar into your pocket.
Or, better yet, eat before the trip to the movies.
Magazines at the Newsstand
Reading a magazine is an enjoyable way to kill time while waiting at the doctor’s office or on a plane. But the cost of a magazine at the newsstand is never worth it.
If you really enjoy a particular magazine, consider subscribing to it or checking it out at your local library. Subscribing often lowers the per issue price substantially, from around $5 to around $1 or even less.
Kelly Anderson is a financial planner who blogs about financial advice you can use in your everyday life. Connect with her on Twitter, Facebook and Google+.