How to Tell if You’re Wasting Money

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No one intentionally opens up their wallet and throws their cash directly down the drain. But some spending habits have the potential to feel like the equivalent. 

Here’s the catch: What may be “throwing money down the toilet” for one person might not be for another. Some may allot more flex spending for restaurants or boutique fitness classes, and that’s OK. As long as it’s a healthy spending habit within the predetermined budget, who’s to say it’s a waste? 

But not all of us are budget brainiacs. Here are some common spending habits where many of us waste money without even realizing it.

1. Recurring Subscriptions

Set it and forget it is great when it comes to automating your personal finances, but it’s less than ideal when it comes to subscription services. Seventy percent of American homes have at least one streaming service subscription, and the average U.S. subscriber watches just over three services. 

On top of streaming entertainment services, 15% of American consumers subscribe to a box service like Dollar Shave Club, Hello Fresh or FabFitFun. These figures don’t include other monthly recurring payments, such as Patreon subscriptions. The average service costs just over $8 a month, which doesn’t seem like much, but it adds up. The vast majority of people who subscribe to monthly services underestimate the overall costs of them by at least 40%. Some might use up their monthly razors religiously or exclusively watch content on Hulu, but others may not use what they are subscribed to. 

Whether a person is ready to ditch some monthly services or not, they can try tracking their monthly recurring spending on a spreadsheet or enrolling in a free service like Trim or Hiatus to catch those monthly bills. From there, subscribers can decide what stays and what goes. What might be worth the cost based on frequency, or what is worth canceling because they didn’t even realize they were signed up.

Keep reading: 20 Budgeting Tips for Beginners

2. Food Expenses

Buying groceries is an essential part of budgeting, but it’s one everyone should keep an eye on. Purchasing too many groceries or creating food waste can be a big wasted expense. The average American throws away 219 pounds of food a year, and the average U.S. family of four will throw away $1,600 worth of produce alone in a year. Meal planning and buying only what’s needed can help reduce wasted food and money. 

But groceries aren’t the only area where money is wasted on food. According to the Bureau of Labor Statistics, the average home in America spends nearly $3,500 annually on food away from home, which includes home delivery. 

The average meal out costs $13, which can be as much as a 325% markup of the cost it would take a person to cook the same meal at home. Dining out is great for special occasions, but eating even a few more meals at home a week can lead to some serious long-term savings.

3. Small Impulse Buys

When a purchase is one click away, buying things on impulse becomes almost automatic. It makes ordering new pens or purchasing a latte on the way to work easy, and many of us rationalize the purchase because it’s only a dollar or two. 

But a dollar or two adds up faster than most of us think. According to crowdsourced shopping platform Slickdeals, U.S. consumers spend $155.03 on average each month on impulse purchases. Impulse spending ranges dramatically from shopper to shopper, but curbing it can look the same across the board. Try implementing the 30-day rule on most purchases. That means letting something sit in a digital shopping cart for 30 days before determining if it’s worth purchasing. Slowing down the buying cycle can help separate want from need and prevent purchases that are forgotten moments after the transaction.

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4. Unreturned Items

Some of us leave cash sitting on the floor of our closets. Ordering clothing and other items online has become fast and seamless, but when something doesn’t meet our expectations, returning it becomes a chore. According to a Cosmopolitan Magazine survey, the average U.S. millennial keeps $120 of online merchandise a year that they’ll never wear. That might not feel like much, but because the clothes go neglected or unworn, the money spent is truly wasted. 

Buyers with a closet full of years of unworn clothes can try to recoup some of the money spent with trips to the consignment shop or selling through online marketplaces like Poshmark or Depop.

Related reading: 20 Bad Money Habits That Are Keeping You Poor and Broke

5. Transportation Costs

Transportation costs are a necessity in budgeting. But many of us don’t account for the true cost of transportation, whether that’s fees associated with parking or the occasional Uber ride. 

Owning a car comes with additional expenses, such as gas, insurance and maintenance, but the cost of parking and traffic can be easy to neglect. Parking-related expenses can make up to 45% of a driver’s annual budget, around $3,037 a year. Meter payments, lot fees and parking tickets can add up quickly. With a little research before heading somewhere, drivers can avoid the pricey lots or meters or might even opt to take public transportation if alternatives are too expensive.

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People who don’t own a car can still be wasteful with transportation spending. Rideshare apps have made it easier than ever to call a ride on impulse — with the touch of a button, a car will be there in minutes. Since 2015, household annual spending on rideshares, including taxis, has more than tripled

Rideshares give us the ability to move on demand, but they also can rapidly inflate a transportation budget with a few rides a week. By planning ahead and allowing time for transportation, riders pay a fraction of the cost of a rideshare if they use public transportation instead.

When considering transportation, it’s worth thinking about what rides and trips are absolutely necessary and which can be achieved through public transport.

6. Bank Fees

Many Americans might not even realize how much they’re being charged simply for accessing their money. A 2019 Bankrate study revealed that the average bank overdraft fee is $33.36. That means any time a person overspends on a checking account, they’ll incur the hefty fee. If a person isn’t paying attention, they could overdraw multiple times before realizing what they’ve done. 

Some banks will even charge customers just for holding an account with them. The cost of these services fees vary based on interest-bearing and non-interest-bearing accounts but settle out to $15 and $5.61, respectively, each month.

Finally, ATM fees can take a chunk out of a customer’s account in moments. When someone chooses to use an ATM outside of their bank’s network, they’ll pay $4.72, on average, each time they withdraw money.

Each bank fee might feel small when you consider its face value, but these figures add up over time. However, not all accounts are built the same. Everyone budgets a little differently, and what might feel wasteful for some could be intentional budgeting and spending for others. However, sizable banking fees don’t need to be part of anyone’s spending.

This article originally appeared on and was syndicated by

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