21 Things You Should Never Waste Your Money On

Summary

This video script outlines 21 common financial pitfalls to avoid for smarter money management. It advises against unused gym memberships, high expense ratios on investments, fast fashion, late fees, bank account fees, lottery tickets, extended warranties, daily coffee and lunch purchases, excess food waste, bottled water, subscription services, physical magazines, cable TV, expedited shipping, ATM fees, foreign transaction fees, hotel stays, airline fees, and private mortgage insurance. The speaker emphasizes the importance of planning, utilizing tax deductions, and leveraging credit card benefits to save money and make informed financial decisions.

Takeaways

• 🏋️‍♂️ Cancel unused gym memberships and consider free home workouts or bodyweight exercises.
• 💰 Avoid high expense ratios on investments; opt for low-cost index funds like Vanguard's VTSAX or VTI for minimal fees.
• 👗 Ditch fast fashion for its low quality and environmental impact; invest in quality clothing instead.
• ⏰ Set up automatic payments to avoid late fees and protect your credit score.
• 🏦 Look for bank accounts without monthly fees or meet requirements to waive them, and consider online banking options.
• 🎟 Avoid lottery tickets due to poor odds and the potential curse of sudden wealth leading to bankruptcy.
• 📱 Skip extended warranties as they often cost more than the repair or replacement of items.
• ☕ Cut back on daily coffee purchases by investing in a latte machine for homemade coffee.
• 🍱 Save money by meal prepping and bringing lunch to work instead of eating out daily.
• 🛒 Reduce food waste and save money by planning meals and sticking to a grocery list.
• 💧 Use a reusable water bottle to avoid the expense and environmental impact of buying bottled water.
• 🔄 Regularly review and cancel unused subscriptions to prevent wasting money.
• 📰 Access magazines and newspapers digitally instead of in print to save money and reduce waste.
• 📺 Consider cutting cable and using streaming services for more cost-effective entertainment.
• 🛒 Avoid expedited shipping fees by planning ahead and not rushing purchases.
• 🏧 Keep an eye out for ATM fees and use in-network ATMs or credit cards to avoid them.
• 💳 Find credit cards without foreign transaction fees for international purchases.
• 🏨 Use credit card points and travel hacking to avoid paying for hotel rooms.
• ✈️ Utilize travel rewards credit cards to dodge airline fees for checked bags and priority boarding.
• 🏡 Wait until you can afford a 20% down payment on a home to avoid paying private mortgage insurance (PMI).
• 💼 Maximize tax deductions and credits to keep more of your hard-earned money.

Q & A

Why should you avoid unused gym memberships?

Unused gym memberships are a waste of money because they don't provide any value if you're not utilizing the gym facilities. It's better to cancel the membership and opt for free exercises at home, such as following YouTube videos or doing bodyweight exercises.

What is an expense ratio and why is it important in investing?

An expense ratio is the fee that investment firms charge to operate mutual funds or ETFs. It's important because it directly cuts into investment returns, and high expense ratios can significantly reduce your returns over time. Investing in low-cost index funds with low expense ratios can save you a substantial amount of money in the long run.

Why is fast fashion considered a bad investment?

Fast fashion is a bad investment because it uses low-quality materials that wear out quickly, requiring frequent replacements. Additionally, the rapid production cycle and reliance on cheap materials contribute to environmental issues such as waste and depletion of natural resources.

How can I avoid late fees on my bills?

To avoid late fees, set up automatic payments online for your bills such as credit cards, internet, and other recurring expenses. If automatic payments are not an option, consider finding a new supplier or service provider that offers this feature.

What are some ways to avoid bank account fees?

Bank account fees can often be avoided by understanding the account requirements. Many banks waive fees if you maintain a certain minimum balance, make a specific number of transactions each month, or set up direct deposits. Alternatively, consider switching to an online bank that offers no account fees.

What are the odds of winning the Mega Millions lottery?

The odds of winning the Mega Millions lottery are approximately 1 in 176 million, making it highly unlikely to win the jackpot.

Why should you avoid extended warranties for electronics?

Extended warranties for electronics often don't add up financially. They can be more expensive than simply buying a refurbished replacement, and they may not provide better coverage or value than what's already included with the product's standard warranty.

How much money can be saved by making coffee at home instead of buying it out?

By making coffee at home, you can save a significant amount of money. For example, if you spend $5 per day on coffee, over a year, this amounts to nearly $2,000. Investing in a good latte machine can provide better coffee and save you money.

What is a simple way to save money on lunch expenses?

Meal planning and packing your lunch for work can save you a considerable amount of money. Instead of spending around $15 per day, which adds up to $3,900 per year, preparing your lunch at home is more cost-effective and healthier.

Why is it recommended to avoid buying too much food at once?

Buying too much food at once can lead to food waste, which is both a financial loss and an environmental concern. According to the Natural Resources Defense Council, up to 40% of food in the U.S. is never eaten. Planning meals and sticking to a grocery list can help reduce waste and save money.

How can I avoid paying for bottled water?

To avoid paying for bottled water, invest in a reusable water bottle. This not only saves you money in the long run but also helps to reduce environmental waste from plastic bottles.

What is the issue with unused subscriptions?

Unused subscriptions can be a waste of money as they represent a recurring expense for services that are not being utilized. Regularly reviewing your subscriptions and canceling those that are not providing value can save you money.

Why should you avoid physical magazines and newspapers?

Physical magazines and newspapers are an unnecessary expense in the digital age. They can easily be replaced with digital versions accessed through apps, which are cheaper and better for the environment.

What are some alternatives to cable TV to save money?

Instead of paying for cable TV, consider streaming services like Netflix, Hulu, and HBO. These platforms offer a wide range of content and are often more cost-effective than traditional cable subscriptions.

Why should you avoid expedited shipping fees?

Expedited shipping fees are often unnecessary and represent a premium cost for immediate delivery that you may not need. Planning ahead and avoiding last-minute purchases can help you save money on these fees.

How can I avoid paying ATM fees?

To avoid ATM fees, use your bank's ATM or ensure that any ATM you use is within your bank's network. Additionally, carrying a small amount of cash for emergencies can help you avoid the need for out-of-network ATM withdrawals.

What is a foreign transaction fee and how can it be avoided?

A foreign transaction fee is an additional charge on your credit card bill when you make a purchase in a foreign currency or through a foreign bank. This fee can typically be avoided by using a credit card that waives such fees, like the Chase Sapphire Reserve.

How can I save money on hotels?

By using travel credit cards strategically, you can accumulate points that can be redeemed for free hotel stays. This can help you avoid paying for hotel rooms and save a significant amount of money.

What are airline fees and how can they be avoided?

Airline fees can include charges for checked bags, food, and priority boarding. These fees can be avoided by using a credit card that offers perks like free checked bags and priority boarding, such as the Delta SkyMiles Gold American Express card.

Why is it recommended to avoid private mortgage insurance (PMI)?

Private mortgage insurance (PMI) is required for home buyers who put down less than 20% and can cost up to 1% of the loan annually. To avoid PMI, it's recommended to save for a 20% down payment, which will allow you to purchase a home without this additional expense.

Why is it important to take advantage of tax deductions and credits?

Tax deductions and credits can significantly reduce your taxable income and the amount of tax you owe. By being aware of and taking advantage of all available deductions and credits, such as the student loan interest deduction or energy-efficient home improvement credit, you can save a considerable amount of money.