10/18/2012 6:06 PM ET|
6 mindless ways you waste money
Dollars you could be saving may be slipping through your fingers. Here's where to check for cash you may not know you're squandering.
Most of us say we are interested in saving money. Saving money in one area allows us to spent it in another. Even better, the money can grow as an investment in the future. Despite the benefits of putting money away, many of us have trouble actually doing it. As young adults, we don't think much about retirement. As adults, we may let credit card debt become a way of life. But recent tough economic times have been a wake-up call for many people, leading to a shift in the public's view of saving. If you want to make regular saving a part of your life, read on to find out how to conquer the first step: finding that extra money.
You can begin by paying attention to these top money-wasters:
● Convenience stores. Do you know how much of a markup you pay for convenience-store items? Here's a hint: It's huge. This is because, unlike grocery stores, convenience stores don't purchase food in large quantities, and also because you pay more for the convenience the stores provide. So, unless it's an emergency, avoid shopping at convenience stores. The premium you pay is seldom worth the assumed convenience you get. For example, a soda at a convenience store might cost you a dollar, while you can go to the grocery store and buy a 12-pack for around $6. If you get thirsty when you drive, buy a 12-pack of sodas and keep it in your car. If you visit convenience stores often, the annual savings of cutting out these visits can be tremendous.
● Cellphone plans. Take the time to check your monthly cellphone bill -- you may be paying more than you need to. If you are using fewer minutes than your monthly plan allows, switch to a lower-rate plan. If you are using more than your monthly allotment, upgrade to a plan with more minutes. Before making any changes to your plan, sit down with a list of your cellphone company's offerings to determine which plan best fits your needs.
You should also check your cellphone plan for added features like text messaging and mobile Internet. If you don't use these features, get rid of them -- they cost money!
● Soft drinks. This one is sneaky. Not only does ordering beverages with a restaurant meal boost your tab, but soft drinks also have one of the highest markups of any restaurant item, and thus provide lower value for your money. Consider a typical family of four that eats out twice a week at fast-casual restaurants. Assuming an average price of $1.50 for a soft drink, that adds up to $12 a week, $48 a month, $624 a year. Just cutting this one item from your meal could mean significant savings that could go into something much more productive, such as a retirement plan. If you invest $624 a year at an 9% annual rate of return, you would have almost $32,000 at the end of 20 years. So dine out, but opt for water.
● Unnecessary bank fees. Many people unknowingly pay a lot to their banks in the form of fees. If you don't know what fees your accounts are subject to, spend a few minutes finding out. Some banks levy a fee for using another bank's ATM, for example. These can be as high as $5 per transaction! This amounts to a 25% one-time fee for a $20 withdrawal. The key with this type of fee is simply knowing about it. You would be better off using a credit card to make the purchase.
Take a good look at the rules governing your checking and savings accounts. Many people have accounts with a fixed number of withdrawals and deposits per month. You would be better off with an account maintenance fee of $10 a month than getting hit with two or three different fees a month.
Also consider consolidating bank accounts, as often one account with a larger minimum can curb or eliminate fees.
● Magazines. If you occasionally pick up your favorite magazine at the local grocery store or newsstand, consider subscribing. Even if you don't want the magazine every month, the money you would spend on a few issues at the newsstand is enough to cover the entire annual subscription. For example, an annual subscription (26 issues) to Forbes Magazine will cost you around $20, while one issue at the newsstand costs $5.
● Annual credit card fees. Unless you have a poor credit history or you hold an elite-level credit card with exclusive perks, there is no reason for you to pay annual credit card fees. A host of Visa, MasterCard and Discover cards have no annual fee, yet some people pay up to $100 a year for the privilege of holding a credit card.
Speaking of credit cards, be sure to make your payments on time every month, even if you pay only the minimum. Many credit cards charge high monthly late fees, and they accrue interest along with your existing balance.
Check for money leaks
Spend a couple of hours looking into the above areas, along with examining any other habits that may be costing you money. The time will be well spent; it could mean hundreds of dollars of recurring annual savings.
Shopping at convenience stores, wasting money on magazines, and high credit card and bank fees are easy ways to waste money. They are also easy money-wasters to avoid.
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Wealthy people do save...a lot, plus they get massive tax breaks under the GOP tax plans. I pay a higher percentage of my income that my wealth relatives and they don't even invite me to dinner...ever.
Well, they get a couple things right, but mostly wrong.
Convenience stores, many of the ones near me are quite competative. I can buy things such as soda, milk, butter, eggs, and a small assortment of produce for LESS (sometimes considerably less) than at the grocery store, and I don't have to spend an hour to pick up that one thing, such as we ran out of milk mid-week and I don't have a grocery shopping trip planned for a few days.
Soft drinks, again, see point number one for convenience stores. Soda is often cheaper at the convenience store than the grocery store, as commented by several others. No we don't need it, but live a little and have one on occasion.
Magazines? I don't waste my money on 50 pages of advertising and a dozen one-page fluff articles. Don't bother killing trees for the newspaper either, as I can get all my news, local, nationwide and internationally online.
Credit card fees? Unless you have a card with a terrific grandfathered rewards program, of which there are few any more, why are you using a card with a fee? I've never held a credit card that charged me an annual fee, even when first establishing credit.
Cell phones, I have a plan that costs me $12 per month (no, that's not a typo, it's actually $12) and it gives me adequate talking minutes, way more texts than I'll ever ues and a small amount of data. Most of the time, my phone can be connected via wifi, so this suits my needs very well and is a fraction of even the lowest priced plan from any of the major carriers.
Banking fees - people, join your local small community bank or credit union. No/low fees. They don't try to nickel and dime you to death with fees.
It comes down to common sense and being informed. Read the fine print on everything,so far as things that may incur fees, and weigh time cost versus pennies saved when it comes to other things - just common sense!
Money not wasted can grow as an investment, HELLO!, unless you are a Rockefeller, Warren Buffet, Bill Gates, or Donald Trump any investment you make is extremely low yield and extraordinarily long term at best. The last time I checked into investing between $5,000 and $15,000 into a Certificate Of Deposit I found out I would make less than .5% per yr., if I recall I think it was .475%. Pertaining to aforementioned considering how much the sinfully greedy main investors and quite likely board members of financial institutions make off of using your money as loans to others they are the only ones profiting. I do not know about what others believe in regards to locking their money up in an investment, but I have far more immediate needs that need to be provided for.
Even Crdit Unions take advantage of the average investor, yet again because you have a select few of the investors making all the institution's policies, 1 would think that with the information highway data/technology age there would be a 1 person/1 vote system. As to prior comment, what can the peasants expect when our Federal politicians are elected off of a system that allows a lackey politician to vote on behalf of their constituents.
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