Despite the fact that the current economic climate is placing more and more importance on frugal behavior, many people continue to make the same spending mistakes year in and year out. While there are certainly some things that are well worth paying for, many people pay for things that not only fail to make financial sense, they also pretty much defy logic.
Therefore if you are interested in living a more frugal lifestyle, it’s important that you first get the basics right. Before you start cutting out those coupons, you should first make sure that you are not currently wasting your money on any of the following pointless purchases.
The only person that really benefits from the majority of extended warranties is the store employee that gets a nice commission from selling them. If you’re clueless about computers, a warranty on a new laptop might make sense, but how many times has your washing machine malfunctioned? Manufacturers of electrical goods calculate the probability of repairs when setting the price of extended warranties. When you purchase one, the odds are always against you.
Multiple Lottery Tickets
Purchasing multiple lottery tickets each week is probably the least frugal thing that you can possibly do. Although the cost of a single lottery ticket is too small to really moan about, purchasing ten a week is a ridiculous waste of money. Regardless of how many lottery tickets you purchase each week, you have a better chance of being hit by a car on your way into the store than you do of actually hitting the jackpot with one of the tickets that you purchase.
Coffee in Paper Cups
Although there are many times when people pay extra for convenience, is queuing up in a busy coffee shop every morning really more convenient than making your own? For the price of a travel mug, you can enjoy your caffeine fix for about ten percent of the price. And while in the past, the cappuccinos sold in coffee shops tasted better than anything you could make at home, times have very much changed. Nowadays, for a one off investment, you can purchase a coffee maker that can replicate just about any fancy coffee shop beverage.
Cutting Edge Electronics
Each year consumers waste a ridiculous amount of money trying to keep up with each other when it comes to having the best of the best. While not allowing yourself to purchase a flat screen television would fit into that category of frugality that affects your quality of life, is it really necessary to purchase the latest model? Unfortunately, when you aim for cutting edge, you always end up paying an arm and a leg for something that will be half the price within six months to a year.
While some people might argue that designer clothing is worth the pleasure you get from wearing it, do you really get the same pleasure from designer food? When you head to the supermarket and you purchase tinned goods and cereals from well known brands, you are generally being charged four times the price of the generic alternatives. And although the supermarkets would rather keep this fact a secret, most generic products taste identical to the branded alternatives.
High Street DVD Rental
A night in watching a movie can be a fantastic way to save some money but most people remain unaware of the savings that can be made by renting DVD’s by mail. Companies such as Netflix offer unlimited movie rentals per month for the same price as a single DVD rental on the high street. Despite this fact, high street DVD rental companies continue to make a roaring trade.
Unused Gym Memberships
If you are seriously into personal fitness, a monthly gym membership can certainly make a lot of sense. But if you are one of the many people that pays for gym membership but is lucky to hit the machines once a month, you are simply throwing your money away. And despite what the manufacturers of fitness equipment would like you to believe, it’s perfectly possible to get fit without ever setting foot inside a gym anyway.
Your Own Money
Finally, while everyone is aware of the problems associated with credit card debt, many people are unaware of just how much banks charge them solely for accessing their own savings. Because bank fees are automatically subtracted from people’s account balance, many people don’t even notice that they are paying them. And although some are minor, fees for foreign exchange, accidental overdrafts and ATM withdrawals can seriously add up over the course of year.
Martin Boston is an avid financial blogger and loves sharing tips on money management. He recommends logbook loans as they do not require a credit check, which enables people with any credit history to borrow a reasonable sum of money.