Don’t Make These Money-Burning Mistakes
According to a GOBankingRates survey, 57% of Americans have set aside less than $1,000 in financial reserves.
Clearly not enough to fund a comfortable retirement.
But even if you have lots of money in the bank, there’s no reason to throw any of it away.
So here are eight simple money-saving tips that could help you stop wasting money and pump up your savings going forward.
Tip #1: Water bills
Do you linger in the shower? My ten-year-old daughter sure does!
The average American spends 8.2 minutes in the shower and uses 17.2 gallons of water.
Cutting shower time to five minutes or less can save up to 1,000 gallons per family member per month.
Faucets are another easy place to save water…
An average American household of three uses between 18.1 and 26.7 gallons per day for all faucets (bathroom, kitchen, and utility sink).
Turning off the water while brushing your teeth can save up to 200 gallons per family member per month.
Besides reducing your water bill, you could also see a drop in gas and electricity bills.
Moreover, you’re helping save one of our world’s most precious commodities!
Tip #2: Speeding tickets
Most of us occasionally push the pedal to the metal.
But if we’re caught, a double whammy awaits… a hefty fine plus the possibility of higher insurance rates for several years.
In fact, a staggering 41 million people receive speeding tickets annually. That’s 112,000 each day.
What’s more, it’s costing $6 BILLION or about $150 per offender for the tickets alone.
So easing off the gas could mean more money stays in your pocket.
Tip #3: Unused gym memberships
You joined a gym as one of your New Year’s resolutions. But you just never get around to going. And you haven’t dropped your membership because you know you should go.
The industry counts on members like you…
According to the International Health, Racquet, & Sportsclub Association, gyms sell memberships with the expectation that only 18% of people will show up on a consistent basis.
If you’re not getting value out of your gym membership, cancel today.
Then look for alternatives such as free – or almost free – cardio classes at the local community center, a neighborhood park, or even through web channels like Youtube.
You can also join a team sport like volleyball or softball or do some other activity that burns calories and makes you happy.
Tip #4: Bank fees
ATM and overdraft fees are at record highs.
The average fee charged by a customer’s own bank for using an out-of-network ATM rose 3% percent in 2017 to $1.72. On top of that, the average ATM surcharge rose to $2.97, a 13-year high.
That puts the average total cost for withdrawing cash at an out-of-network ATM at $4.69.
The takeaway: Plan ahead so when you need to get cash you can do it for free within your bank’s network.
Or at least do it in larger amounts so the fees don’t sting so much.
And if you have to walk another block or two to get to one of your bank’s ATMs, consider the exercise is a bonus.
What about overdraft fees?
Well, the average charge climbed to $33.38 in 2017 and the number of banks that increased their fee outnumbered those who lowered their fee seven to one.
No wonder the Consumer Financial Protection Bureau (CFPB) calls overdraft fees a short-term loan with a 17,000% APR!
To protect yourself against those outrageous fees, sign up for e-mail or text alerts that let you know when your balance gets below a certain level.
Or link your checking account to your savings account so that your money — rather than the bank’s money — can cover any shortfall.
Tip #5: Extended warranties
If you’re plunking down hundreds — or thousands — of dollars for a TV, refrigerator, or other expensive product, you’re sure to be offered an extended warranty.
It makes sense. After all you don’t want to get stuck paying for costly repairs.
But is it worth the price?
In most cases no, according to the Federal Trade Commission and Consumer Reports.
Several of the reasons why that is:
- Some duplicate the coverage that automatically comes with the product
- Some cover only part of the product
- Some make it next to impossible to get repairs when you need them
And most products don’t break during the two or three years covered by the average plan.
These warranties can also come with tons of fine print, such as a deductible or fee each time the product is serviced or the exclusion of certain parts.
So why the high pressure to buy them?
Consumer Reports says retailers keep 50% (or more) of the premiums!
So the next time you buy a product in a store or online, think twice before going for the extended warranty.
Putting that money into a savings account to cover repairs or future replacement is typically the better option.
Tip #6: Not-so-obvious airline fees
The Internet makes it easy to shop for an airline ticket.
But jumping on an especially attractive offer might leave you wishing you had chosen a pricier option.
Companies are now charging for things that were free not too long ago.
Many will tack on fees if you want to select a seat or check a bag.
Some, such as Spirit, charge more if you bring a bag on the plane rather than check it in.
And if you wait until arriving at the ticket counter to check in, you could get hit with another fee.
When shopping for your next flight, look carefully whenever you see a very low price.
You might find that after you add in the little extras, it’s higher than others that provide the same services within the basic fare.
Also consider ways to avoid paying extra – whether that means bringing your own food, adjusting your baggage count, or taking whatever seat is assigned.
Tip #7: Convenience stores
Exactly as the name implies, convenience stores get you in and out in a flash.
According to the industry’s trade group, the NACS, the average time it takes a customer to walk in, purchase an item and depart is between 3 and 4 minutes.
Here’s the breakdown: 35 seconds to walk from the car to the store, 71 seconds to select item(s), 42 seconds to wait in line to pay, 21 seconds to pay, and 44 seconds to leave store.
Of course, all that convenience comes with a price.
The International Journal of Environmental Research and Public Health published a study from Minneapolis/St. Paul, MN, revealing prices of 15 staple foods in supermarkets vs. small food stores, such as corner stores, gas-marts, dollar stores, and pharmacies.
A sampling of the findings:
A pound of bananas: $1.18 at the quickie mart vs. $0.77 at the grocery store, 53% more
- A 17 oz. jar of peanut butter: $3.89 vs. $3.00, 30% more
- A gallon of whole milk: $4.28 vs. $3.86, 11% more
- A box of Cheerios: $7.41 vs. $4.82, 54% more
The prices in your area are sure to be different. But I think you get the point…
Convenience stores are great if you need something in a hurry that just can’t wait.
For the rest of your grocery shopping, stick with the supermarket or other discounted provider.
Tip #8: Take a mindful approach to spending
I could keep going for many pages on all the different ways to save money, and we will certainly continue to talk about more of them in future articles.
But for now, let me leave you with a blanket idea…
During the next few months go through your checking account and watch where each dollar goes.
You’re bound to find many more places where money is wasted… money that could be set aside to help fatten your nest egg a little bit at a time.
To a richer life,
Editor, The Rich Life Roadmap