5 ways Americans waste money without noticing it

A woman standing in front of a multi-unit mailbox, which she opened with a key, looks at the mail she has received.

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Life is busy and it is easy to ignore the small sums that fall from our pockets.

the main points

  • It’s easy to overspend on everyday items that we actually need.
  • Take a look at your expenses for things like clothes and food to see if you’re overspending.

We are a nation of consumers. If we have money, we spend it. Unfortunately, many of us have a habit of spending money on things we don’t need. The problem is that we need clothes, insurance, food and housing. And because we need these things, it’s easy to overspend. The trick is to pay for what we need without overdoing it.

Here are five things Americans tend to waste money on and some locations where you might be able to cut your budget.

1. Fashion

According to a recent survey by the US Bureau of Labor Statistics, women and girls spend an average of $545 on clothing annually. Men and boys spend about $326. However, these are averages, which means that some people spend less and others spend more. And those who spend a lot more are chasing the latest fashions.

If you’re the kind of person who jumps on the latest fashion, you might be throwing money away. This is because really hot trends don’t last long, and by the time something goes out of fashion, you find yourself buying the latest fashion.

The best bet for most of us is to buy classic pieces that won’t look “until 2022” in 2023.

2. Insurance

Insurance is essential to our financial health. Whether it is at home, life or car insuranceGood politics may be all that stands in the way of financial ruin. Still, it can be overstated. Here are some examples where policyholders may be able to cut costs.

Mortgage life insurance

It’s less popular than it used to be, but some people buy a policy that promises to pay off their mortgage if they die. It is almost always a waste of money. Let’s say you buy a house with $300,000 in credit. The cost of a $300,000 real estate life insurance policy is usually much higher than the cost of life term policy With the same death benefit.

collision insurance

If you drive an old car with a low Blue Book value, paying for collision coverage may not make sense. While drivers always need liability coverage (to pay for any damage they may cause), you can ask your insurance agent how much you are likely to receive if your car is bundled. If the amount is tied to the value of the car, you may find that paying for collision coverage is not worth it.

Car rental coverage

It may be helpful to review your car insurance before purchasing car rental coverage. Rentals are often covered by auto insurance on personal vehicles.

identity theft coverage

Check your credit cards to see if any offer free identity theft coverage. If so, you may not need a separate policy. The same is true if you tend to purchase travel insurance. many credit cards Covering issues such as baggage loss and flight cancellations. Before you pay extra, make sure you don’t actually have the coverage you need.

3. Grocery

It is easy to overestimate the amount of food we need to buy. According to Feeding America, nearly 40% of all food in the United States is wasted as Americans throw away an estimated $408 billion. Consider this: Even if you “just” throw in $10 worth of groceries each week, that’s $520 a year. Buying only food you think you’ll eat could leave you an extra $520 to save or invest.

4. Memberships and subscriptions

It’s easy to tell ourselves that we’ll go back to the gym someday, or need the wine club membership we signed up for in Napa Valley, or we just can’t live without every available streaming channel. To see if you can make some savings, make a list of all your existing memberships and subscriptions. Then, go through them one by one to determine if they are still valuable to you and eliminate the ones you can live without.

5. Houses

As evidenced by the housing-buying frenzy of the past couple of years, some people are willing to go beyond their housing budgets to get a home. While it’s tempting to buy a house bigger than we need, it’s easy to get in over our heads. plus a MortgageBuying more homes means paying more for things like utilities and repairs. It could also mean higher property taxes and homeowners association fees.

Think carefully about how you plan to use the house and how much space you need to be comfortable. For example, if you share 3,500 square feet with a partner, but you both usually hang out in the same room, you may have more home than you need.

American author Robert Collier once wrote something touchingly on “Success is the sum of many small things done right.” And one of the little things we can all do to manage personal finances Less is wasted.

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