To get your finances under control, one of the most crucial steps is to stop wasteful spending.  This is mostly due to the fact that it’s a whole lot easier to save a dollar you already have than earn another.  Unfortunately, in our consumer society, this can sometimes be difficult for all but the most disciplined of us.

I myself once wasted money on a regular basis.  Whether on clothing, banking fees, and/or partying, if I earned it, I spent it.  In fact, like many of my fellow Americans I lived paycheck to paycheck, even taking on some debt. Thankfully, I eventually “got it,” stopped blowing my paychecks, and turned my debt into a net worth.

Below is a list of 20 ways to waste your money, as compiled by Kiplinger.com.  You may notice that I have already addressed many of these.  The ones I haven’t, however, are also very worthy of discussion.

20 Ways to Waste Your Money

1. Buy new instead of used:  Purchasing gently used items in place of new ones can potentially save you thousands (if not millions) over the course of your life. This holds especially true for automobiles, which depreciate by thousands of dollars from simply being driven off the lot. I have found Craigslist, eBay, and even the local paper to be excellent sources for used items.

In addition to buying used, I suggest you look for free items first.  This is what I personally try to do. Over the years, I have found a lot of great stuff that people simply did not want anymore.  Remember, the constant push to get Americans to consume has in turn produced a lot of surplus goods that still have life left in them.

2. Carry a credit card balance:  Credit cards provide some of the worst finance rates available, yet thousands of Americans still carry a balance from month-to-month.  If you are among them, I highly recommend that you start  paying off the entire balance at the end of every month. I have never paid 1 cent in interest to a credit card company.  Alternatively, they regularly send me checks of up $100 from accumulating cashback.

3. Buy on impulse:  This one gets a lot of us.  The article suggests taking a “cool-off” period to resist the urge to buy. I agree and suggest waiting 3 days before making any purchase >$100 that falls into the “want” category, instead of the “need” one.  After thinking about it, you’ll often find yourself having second thoughts about the potential purchase.

4. Pay to use an ATM:  If your bank doesn’t reimburse ATM fees, only use their machines or better yet switch to a bank that does. 

5. Dine out frequently:  This is another big one.  You can usually cook the same foods at home for a fraction of the price you’d pay a restaurant to prepare them for you. 

Thus, if you can’t cook, start learning now!  I did and it has saved me thousands over the years.

6. Let you money wallow:  This one is easy.  If your liquids assets are not earning interest, they are losing you money.

I recommend keeping what you have in a rewards checking account.  In case you are unfamiliar with these accounts, I will post more about them in the future.

7. Pay an upfront fee for a mutual fund: I only invest in no-load mutual funds and suggest you  do the same.

8. Pay too much in taxes on investments:  I know firsthand that capital gains taxes will eat away at your profits. Thus, as the article suggests, max out your Roth 401k/IRA first, if you have one.

9. Buy brand-name instead of generic:  The only brand-name item I regularly purchase is A1 Sauce.  To me, there is no substitute for it, but for everything else, it’s the generic.

10. Waste electricity:  Most of us do this (some much worse than others).  See my previous post on this topic for easy ways to conserve.

11. Pay banking fees:  It boggles my mind why anyone would tolerate their bank “nickeling-and-diming” them.  If your bank does this, switch now.  If it’s your own fault, identify what you are doing wrong and fix it.

12. Buy things you don’t use:  This goes out to the 3-year-old, unused sweater in your closet and that juicer in your cabinet.

13. Own an extra car:  This one will really cost you.  Cars are a major economic drain.  Instead, own a car and a bike.  Try to make the bike your main source of transportation if possible.

14. Ignore the local dollar store:  Sounds like this is starting to become a recurring theme on this blog!  I don’t know why anyone would purposely avoid my favorite store?  Maybe they like needlessly wasting money? :)

15. Keep unhealthy habits:  Again, already discussed here.  Remember, what kills you can also financially burden you.

16. Be complacent about insurance:  It is easy to shop and compare insurance coverage these days, so why not try it yourself? 

17. Give Uncle Sam an interest free loan:  I am guilty of this one, because every year I get a fat income tax return check.  It would be way more lucrative for me to earn interest on that money instead.

18. Pay for something you can get for free:  I already discussed this above.  The article recommends using the library, and I couldn’t agree more.

19. Don’t use flexible spending account:  I was once guilty of this one for many years.  However, I finally got around to funding my flex plan, and it has saved me a lot on health care costs.

20. Pay for unnecessary services:  I live a pretty a “Spartan” existence myself.  However, I know too many individuals that pay for stuff they don’t use.