You work hard for your money and you want to make sure you aren’t wasting it. But over and over again, you are probably doing just that, in the form of unnecessary fees and purchases.
Generic brand cereal and milk are cheaper than name brands, usually by at least a dollar, but for some reason many of us can’t ignore the familiar, fancier logo of a recognizable brand. We fall for it repeatedly even though oftentimes the difference between a generic and brand name product is just the packaging. The ingredients may be similar.
How to Save Money: Take time to compare products by going over the ingredient list. Don’t tell your family members, and see if they notice the difference. And if they don’t, you’ll end up with more money in the family budget.
You might think it’s better to put premium gasoline in your car because you think it contains more cleaning additive than regular unleaded gasoline. That sounds like a good theory, but it is not necessarily true. Go by your owner’s manual. If it suggests premium, use it. But if it doesn’t, don’t feel bad about keeping the extra money. Your car probably doesn’t need it.
How to Save Money: Look into ways you can save a few bucks by signing up for rewards cards that shave off your price-per-gallon, or gas credit cards that give you cash back for the gas purchase that you have to make anyway.
Consumer Reports surveyed thousands of car owners, and most of them found they paid a lot more for their extended warranties than they got back in savings when it came to repairs. Some people never needed the extended warranties at all. Others found that the repairs they needed weren’t even covered.
The same issue comes up with extended warranties on other big-ticket items around your home. While a warranty that covers your electronics or appliances sounds helpful, it won’t do you much good if you don’t use the items very much, if the gadget is obsolete by the time it breaks down, or if the warranty cost more than the service charge to repair it.
How to Save Money: You may automatically get an extended warranty when you purchase a big-ticket item, such as a computer or an appliance, with your credit card. Exclusions apply, of course, but many top credit cards do offer this perk. Check with your credit card company to see if your card offers it, and what the limitations are.
Memberships like gyms are great but only if you go regularly. Gym owners know this – that’s why they tend to put members on a payment plan that automatically pulls monthly fees from their credit card or bank accounts. These charges can be as high as $50 to $100 per month.
How to Save Money: Regularly review your credit card statements to check for any recurring charges you may have forgotten. Don’t forget to consider cheaper alternatives. For instance, if you’re not passionate about the gym, then make your own workout space at home or take up outdoor activities, like running, which don’t cost more than the price of sneakers.
Whether you grab an extra bag of chips toward the end of your grocery store trip or pick up a soda on the way out of the gas station, it’s impulse buying. Retailers know they can tempt you by putting items in a bin close to the checkout counter when you have less time to second-guess your purchases.
How to Save Money: Practice the walk-away test. Stick to your shopping list and walk away – for at least 10 minutes – when you suddenly feel compelled to buy something that’s not on your list. You may forget all about it after the time has passed.