Wasteful Spending

I recently read an article on the Dave Ramsey blog about the top 10 things people waste their money on. It got me thinking about wasteful spending in general, and how much of it went on in our household during this past year. It’s good to periodically review habits and see where thing may have gone off course and as we begin the new year, now might be a good time as any to review spending habits to make sure you start off 2016 on the right track.

Wasteful Spending According to Dave

10. Shipping Charges – Upgraded shipping charges to revive item sooner

9. Timeshares – $16,000 on average.

8. Name-Brand paper products – paper towels, napkins, paper plates, etc

7. Car wash upgrades – all the extras like wax, sealer, protective coating, etc

6. Car leasing – Average car lease in 2015 – $405 a month

5. Car payments – Average car payment in 2015 – $483 a month

4. Daily coffee trips – Starbucks anyone?

3. Gym memberships – Average membership cost in 2015 – $58 a month

2. Ziosk tablets – Those little tablets on restaurant tables

1. Student loans – 2015 college grad will back an average of $35,000 each.

wasteful spending

Here’s how we did with Dave’s top 10:

10, Shipping Charges – I don’t upgrade shipping charge, and often look for merchants that offer free shipping.

9. Timeshares – I was tempted to buy a time share when our three children were younger, but educated myself on them and never gave it a second thought.

8. Name-Brand paper products – We buy in bulk as Costco.

7. Car wash upgrades – I wash my cars at home, even in the winter, unless of course it’s below freezing.

6. Car leasing – We paid cash for our cars.

5. Car payments – We paid cash for our cars.

4. Daily coffee trips – We do treat ourselves to coffee one and awhile. I drink tea and usually make it at home.

3. Gym memberships – If you’ve seen me you would never accuse me of being at the gym. My oldest son does have a membership and regularly attends.

2. Ziosk tablets – Sorry we have plenty of free games on our Smartphones.

1. Student loans– No student loan debt for us. We are educating our three children and saving to not become part of this statics.

I think we did pretty well, no major budget buster in the ten categories Dave listed. I want to dig in a bit more and see what areas we might be overlooking in our day-to-day.

Spending is Relative

I believe the way someone spends their money should be relative to their overall net worth, income, current financial situation, and convenience. Someone may see an indulgence on eating lunch out as wasteful spending, while someone else may view that same purchase as a reward, and yet a third person may view it as a planned expense.

We recently took a trip into New York City and we have two options to make the trip in, either drive in and park or take the train. Typically the drive will cost about $65-75, parking, tolls, gas, etc. now the train for our family of five can run from $130 to $145 depending it we take peak or off-peak trains. We decided to take the train, the higher cost of the two options. The reason we did was out of convenience because we were making the trip mid-week and wanted to avoid the traffic, both car and foot while in NYC and we had the budget to do so. Could some view the additional cost as wasteful spending? I’m sure, but for us it was the right decision.

If we were still in debt payoff mode I doubt we would have made the trip into NYC altogether, we would have saved the money and put it towards out debt snowball. That’s the point spending is relative to situation. Our current situation gave us the ability to spend a little extra on convenience, but yet some might still view it as wasteful.  So if you want the Starbuck coffee, go for it. I won’t judge.

The one area that I know we need to try to do a better job in the New Year is with food. We are organized with shopping list, and use some coupons, and buy products on sale, but often at the end of the week end up throwing some unused, left over or spoiled food away. I can feel the money being thrown right out to the curb. We try to buy less when we shop since we make a trip or two to the store each week, we utilize freezing fresh food to have on hand, but still seem to come up with food we end up throwing away. I would think with three teenagers that there would be nothing left, but we have some picker eaters who seem to be afraid of anything green. So in 2016 we will try to do a better job with our food and avoid wasteful spending in that area..

Are you guilty of any of Dave’s 10 wasteful spending habits? What spending habits do you need to rein in for the New Year? Any thoughts on how I can minimize our food waste?

28 thoughts on “Wasteful Spending”

  1. I agree with most of those, particularly timeshares – never understood the appeal – and leasing cars. However, I have found tremendous value in my gym membership. No doubt that there are a number of exercises (e.g. walking, push-ups, sit-ups) you can do for free at home, but I do enjoy participating in some activities (e.g. group fight, group power, yoga) in a group setting that adds variety to the exercise mix.

    1. I think the only time a gym membership is not worth the cost is when you don’t go. 🙂 Paying for something you are not using is pointless.

  2. The only things I do are buy brand name toilet paper (I tried the generic 99 cents store brand and uh, nope! I do use generic everything else though) and car washes, which I really try and limit. I live in an apt so I really have no choice. It’s only $6 though.

  3. Interesting list. I’m guilty of paying a car loan (but paying it off early is one of my goals for 2016), and student loans.

    I have to disagree with DR on brand-name paper products. We mainly use cloth napkins, sponges, and rags in our house, but there are times I just need a paper towel. (Most of those times have something to do with my cats…) I’ve bought cheaper paper towels, but they’re flimsier and absorb a lot less, so I end up using more, thus defeating the savings. So it’s worth it to me to shell out a bit more for my favorite Bounty, which I always buy on sale and with a coupon. (I had no idea I had such strong feelings about paper towels!)

    Groceries are an ongoing trouble spot for me, too. I’ve gotten much better about cutting down on waste, but I have a very difficult time sticking to a $400 per month food budget. It’s doable, but I need to be more disciplines about sticking to my list.

    1. We use Costco brand paper towels, cheaper than name brand and good quality.Agreed the cheaper brand are not worth it. We too try and use sponges and towels to reduce overall cost.

  4. I think that list itself is very telling. A lot of things on it are the sort of things you cut out very early when you’re on a frugal journey. I didn’t feel like I could relate to over half of them. Although I am guilty of pretty frequent coffee and a gym membership – but I don’t think guilty is the right term when you have the money and are using it how you want. You’re right – it’s all about decision making.

  5. Some people wash their cars? Maybe that’s why they don’t have their lugnuts rusting out.

    I do well on all of these, but I would certainly spend on a gym membership if there was one I liked nearer to my house.

  6. I actually stack up pretty well on the list. We do have Amazon Prime, that eliminates most shipping charges. No timeshares, car payments, lattes from Starbucks or anything like that.

    Happy New Year!

  7. From that list, I do have a few that I’ve chosen to spend money on. I have a timeshare from long, long ago and while I feel like in the past I’ve gotten great use and value from it, that time seems to be coming to an end. I have very low interest car payments on our only family car, but this will be my last car loan as we’re planning to keep this car for many years to come. Finally my gym membership costs a quarter of the average and is very important to controlling my healthcare costs. I agree that spending is relative, and the most important thing is to examine whether an expense makes sense for your situation.

  8. To me gym memberships are NOT a waste. But being my frugal self, I’ve negotiated my membership rate and pay a lot less than most in Manhattan. If an Aunt asks what I want for Christmas, I always say Starbucks and those gift cards usually fill my 2x a week Starbucks fix (I only drink coffee – nothing fancy). I still have a small student loan but it’s only $4k @ 3%, but that will be paid off in 2016 🙂

    1. Memberships are not wasteful if they are being used. We recently signed up for a gym membership for our oldest son and he goes 3x a week, so it’s worth the money.

  9. I consider hitting the gym not a priority as of now because I can exercise at home and use my space for fitness and active exercise. And, I can run outside or around the village. I think with my body structure I don’t need it. Probably, I may need it when I get serious about maintaining a good physique or healthy body or I have exercise equipment to tone those muscles.

  10. Student Loans? If someone goes to school for an education that prepares them for a well paid job, how does that fall under ‘wasteful’?
    The rest, I mostly agree with.

    1. Are all college grads getting well paid jobs with their degrees? If you spend $120k on a degree that will earn you $40K in return, that might not be a smart option. You can’t just blindly borrow money for college, educate yourself on career path, ROI, etc will help avoid a be pile of student loans when you graduate.

      1. Agreed, Brian. The one line generalizations are tough to read sometimes. Our own experiences also impact our reactions. When I graduated, from an engineering school, we all graduated with jobs, with pay above average. Today, graduates in every field aren’t guaranteed a job. So it seems the warning is well taken.

  11. I appreciate the way you bring up the whole issue of expenses being relative. I think you made the right choice in choosing the train when you went to NYC. You increased the value of your experience by a ton in avoiding the head-ache of traffic. I find I often engage in a back-and-forth debate in my head before choosing to spend something that is not the absolute cheapest option – but that’s a good sign, right? I used to just go with what seemed most appealing – end of story. I’m surprised Ramsey included gym memberships on that list. I’ll have to check out that post. Happy New Year, Brian!

    1. There was major discussion around the train/drive in to NYC. 🙂 It is good, it shows we are not on auto-pilot when it comes to money. Happy New Year Ruth!

  12. It is kind of scary reading this list and realizing how many of those things are on your list or your friends/familys list. Unfortunately, spending and the necessity of owning many of the things on this list drive our monthly costs up to the point where we are barely saving. If not monitored correctly, you can find yourself pretty far behind. Luckily for me, I found myself under the average for most of the items on this list. Thanks for putting this together and bringing the focus on an issue that we can all solve if we act.

    Bert

  13. Mmmm….coffee. When I started working from home the thing I missed most was the morning trip to the coffee guy. So I did the numbers & bought a very good quality coffee machine for my daily fix. I worked out that if I had one cup a day it would pay for itself in about 3.5 years. I have been using it now for about six years, it has never broken down & so I am way ahead. Besides, since I worked from home (now retired) I claimed it as a partial business expense & depreciated it on my tax so the break-even point was more like 18 months than 3.5 years.

    As for food waste, there will always be some waste. But…buy less perishables but more frequently. Buy a vacuum packing machine, which can extend the life of certain products without freezing and dramatically extend the life of others that can be frozen as well as reducing the space required to store. And plan your meals to use the leftovers/excess items before they go off. Planning is the key…always.

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