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Are You Wasting Money? 20 Ways to Waste Money

written by: Lucinda Watrous•edited by: Rebecca Scudder•updated: 6/4/2010

Many people waste money on a daily basis, and some may not even realize it. Take a look at these 20 ways to waste money to see where you can cut the waste and turn it into savings. Some of these ways may be more obvious than others, but eliminating waste here is an easy way to start saving money.

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    Buying New

    When purchasing a new vehicle, the depreciation generally puts you upside down shortly after the first mile. Buying used, even when it comes to furniture and computers, will save a great deal of money. Furniture can be restored or slip covers can be used to glam up the furniture. Replacing or upgrading individual parts of a computer on your own is much cheaper than purchasing new or paying someone else to do the upgrades for you.

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    Dining Out

    When it comes to food, dining out is much more expensive, even for one person, than cooking meals at home. Grocery shopping, cooking, and doing dishes may all be a hassle, but getting out of those chores is not worth the price. Considering most fast food meals for a family of three are anywhere from $15 to $20 each, it's definitely worth it to plan a grocery list and prepare meals at home. Frugal shoppers can prepare meals for as low as a dollar per person, per meal, meaning a family of 3 can eat breakfast, lunch, and dinner at home for 7 days on around $63 per week--what some people would spend in a day or two when eating out. Obviously, food prices will vary on location, making groceries higher in some places than others, but where groceries are higher, so are dining out costs.

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    Using a Traditional Checking or Savings Account

    These accounts do not offer the high interest other accounts do. While not really wasting money here, people who don't use a high interest savings account are not getting paid to save and therefore are missing out on a great chance to make more money.

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    Paying to Use an ATM

    Many banks are compensating their account holders for ATM fees, up to a certain point each month. Those who are not, should use credit union ATMs when possible as there are no fees. If possible, use a debit card for all transactions, eliminating the need for cash and ATM fees.

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    Carrying a Balance on Credit

    No matter the interest rate, carrying any balance on a credit card will cost money. Avoid it whenever possible by keeping balances low and making on time payments to avoid interest rate hikes.

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    Impulse Buys

    Don't ever buy something without taking time to think about it first. Impulse buys can really add up and you may find you didn't want or need the item after all.

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    Buying Brand Name

    Learn to love generics. Many times, especially when it comes to food, generics are the same thing as the brand name items, with a different label. Buying brand name means you're not paying for the product so much as you are the label, so it's a great waste of money.

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    Taxable Investments

    Before investing in taxable investments, place money in non-taxable accounts.

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    Wasting Electricity

    Replace your light bulbs with CF bulbs. Unplug items when they are not in use. Turn off lights when not in a room. Install motion detection lights outdoors. Turn your computer off at night. Turn your water heater down. Adjust the thermostat to 72. These are all ways you can save money on your electric bill. A high bill is not a necessary evil in life... power may be a necessity, but paying outrageous amounts for it, isn't.

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    Paying When Free is an Option

    Why pay $5 a pop to rent a movie at your local Blockbuster, or even $1 per night at your local RedBox, when you could get a library card for free and rent movies that way? Why buy a book to read from a local bookstore when you could use the same free library card to check it out and read it?

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    Ways to Waste Money Most People Don't Think AboutLook at this list of things to see if there's anything you're wasting money on. If so, turn the wasted money into savings!
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    Banking Fees

    Keep a budget and stick to it. Watch your balances. If you overdraw, you're looking at $20-$35 each time you do. Make sure all the services offered are free--because some banks will charge customers to download their banking transaction information into a personal finance program such as Microsoft Money or Quickbooks.

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    Bad Habits

    Cigarettes, beer, even soda, adds up! Cut back on the bad habits--quitting smoking could save you $35 a week, at $5 a pack and a pack a day, and it could add years back to your life.

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    Forgetting the Dollar Store

    Local dollar stores always have great deals on essential items such as dish detergent, laundry detergent and other cleaning supplies. Forgetting to check the sales papers each week could cause you to waste money on these items at other stores.

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    Buying Items You Won't Use

    Buying something you don't normally buy, just because you have a coupon, is still a waste of money. If you wouldn't spend it before, and you're going to spend it now, (even though it's at a discount) that's still spending more than you normally do. If you buy in bulk, but buy too much, it's going to waste, therefore putting the money to waste, too.

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    Owning Additional Vehicles

    For most families, owning two cars may be necessary. For each additional vehicle, you're spending more every month on gas and insurance coverage. Add on maintenance costs and suddenly, having the second vehicle isn't worth the convenience. If possible, use public transportation or look into car share programs for the person who has less traveling to do.

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    Too Much Insurance

    Making sure your covered in the event you need to call on your insurance is necessary, but having too much coverage is just putting money in the insurance companies pocket. Raise deductibles to lower premiums, and for a little while if you're worried, save the difference in premiums toward the deductible in the event you need it. Don't forget to shop around with different providers to make sure you're still getting the best possible rate.

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    Too Much Withholding

    Make sure your tax withholding is putting more money in your pocket each week, rather than giving an interest free loan to the government. Some people benefit from the large lump sum of money each year, so it's best to decide what's right for your family, but in either case, try withholding a little less if possible, so you can make better use of it throughout the year.

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    Not Using a Flexible Spending Account (FSA)

    If your employer has the option, a FSA will give you the ability to set aside pretax dollars for important expenses not covered by insurance. It'll save you money on the IRS bill, at the very least.

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    Paying for the Unnecessary

    Stop paying for magazine subscriptions, and if you pay for a gym membership, make sure you're using it. If possible, start working out at home, or going to the local park for a walk each day.