10 Ways You're Wasting Money Without Realizing It | ModMoney

10 Ways You're Wasting Money Without Realizing It

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I recognize the irony of writing a post on wasting money while on our European honeymoon. But even as a personal finance blogger who touts the importance of saving for the future, I'm all about approaching your finances with balance. For me, financial wellness doesn't mean stashing away every penny at the expense of your happiness today. It's about feeling empowered to save for the future and still enjoying the finer things.

Still, it's easy to fall into bad habits and waste money without realizing it. Upsetting these patterns can put a good chunk of change back in your pocket. So read on for some of the most common, yet avoidable ways people waste their dollars.

1. Credit card interest

Credit card debt will sabotage your financial health. There's just no getting around it. Last year, households with credit card debt carried an average balance of nearly $16,000! Interest rates on credit cards are sky-high, and the longer you owe money, the more it snowballs. Trust me, no quantity of sign-up bonuses or credit card perks offsets what you pay in interest if you carry a balance. To fix this problem, set all of your credit cards to auto-pay the full balance every month (NOT the minimum balance!). That way, you don't have to think about making your payments on time...or wasting money on interest.

2. Unused gym memberships

There's no doubt that working out is a healthy habit, but it can also be an expensive one (hello, SoulCycle). Especially if you overpay for a gym membership you don't actually use! If you're currently shelling out the big bucks for a fancy fitness club, start by downloading the Achievement app to start making money when you exercise. Then, check out these creative ways to save money when you work out.

3. Missing out on 401(k) matches

A 401(k) is the most popular employer-sponsored retirement plan and is a key part of your well-deserved compensation package. The best part is that most employers will match your contributions, dollar for dollar, up to a certain level (usually 3% to 5% of your salary). But here's the catch: your employer will only match what you actually contribute. So don't leave money on the table! Bump up your retirement contributions at least in line with what your employer will match.

5. Not negotiating your new car

Driving a new car is fun. Buying a new car....not so much. Negotiating with a car salesperson can feel like a losing battle, unless you approach the process with a few key pieces of knowledge. The first step is understanding the tricks dealers use to make your monthly payment "appear" lower. The second step is understanding that car manufacturers offer dealers all kinds of incentives, which means your dealer actually has a lot of room to negotiate with you. These tips will help you get the best deal on your new ride without feeling defeated or manipulated.

6. Bank fees

Hidden fees are a dirty little secret in the banking industry. They might seem small on a one-off basis, but they add up over time and can jeopardize the hard work you've put in to save. So be aware of them, and try to avoid them when possible.

  • ATM fees - Many banks charge fees of $5 or more for withdrawing money from another bank's ATM. If your bank doesn't have an ATM around, some credit unions offer free ones. Many supermarkets will also let you withdraw up to $200 in cash at the register.
  • Checking account fees - Most large banks charge fees if your checking balance falls below a minimum threshold. Nerdwallet offers a helpful comparison of checking accounts, which can help you avoid any unnecessary fees.

7. Investment fees

If you have funds in a 401(k), IRA, or other investment account, you could be paying higher fees than you realize. Many of us park our cash in mutual funds or "target date" retirement funds offered by our account provider. While these are good options for diversifying your portfolio, most of them have high expense ratios (a fancy word for fees). Instead, consider investing in low-cost index funds. Last year, the average mutual fund fee was 0.78%, while the average index fund fee was 0.09%. You'll still get diversification, but the fund is run by an algorithm instead of a person. Data has shown that index funds outperform human-managed mutual funds, anyway! I use Wealthfront for all of my investments because it's easy to use, hands-off for me, and puts all of my cash into low-cost index funds.

8. Fancy coffee

Don't get me wrong. I love myself a good almond milk latte. But the $5 price tag at my local coffee shop is just too much to justify. Still, I need my caffeine fix, and I want my morning coffee ritual to be high-quality and savor-worthy. So I purchased this Nespresso machine, which brews incredibly tasty (and powerful) coffee and espresso. While the price seems steep upfront, it pays for itself over a period of time. Think about it. A $130 machine is the equivalent of 26 days of my $5 coffee. Don't feel so guilty splurging on a nice coffeemaker if it means you'll forego your fancy brew from the local coffee bar.

9. Shopping online without using a portal

Online shopping portals are one of the Internet’s best-kept secrets (until now). Ebates partners with thousands of retailers to offer cash back in exchange for spending money online. Whether you’re browsing a department store, a boutique, a big-box retailer, or a travel booking site, chances are high that you can make money back when you spend it. Just sign up for an Ebates account (and automatically earn $10), click on your retailer, and shop like normal. You’ll receive a check every three months for the cash you’ve racked up.

10. Unclaimed Money

There are billions of unclaimed dollars out there, and some of it could actually be yours. So here's a little thought exercise. Did your old apartment ever return your security deposit? Did you cash all your payroll checks from your old side job? Do you have any forgotten bank accounts or trust distributions? Each state has a program designed to return this "lost money" to its rightful owners. To see if you have any, go to MissingMoney.com and type in your name and state (try every state you’ve lived in). If you find unclaimed property, you can start the claims process directly through the website. You’ll fill in some personal information, and the state will mail you a check in as little as two weeks! How's that for free money?

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