Instant Alert: 5 things you may be wasting your money on

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5 things you may be wasting your money on

by Devon Delfino on May 30, 2018, 3:05 PM

Sometimes we waste money on things we don’t need without even realizing.
It can be difficult to spot things that are wasting cash because an item’s affordability is subjective based on situation and personal preferences.
Here are five things that may be a waste of your money.

People often talk about personal finance in terms of large money decisions, like deciding whether to buy a home or creating long-term savings goals. But over time, the little financial decisions, many of which occur on a daily basis, matter too. And it can be hard to know where to draw the line between needs, wants, and wastes.

When it comes to purchases, waste is anything that you don’t get any benefit from or use, Jennifer Faherty, a New Jersey-based certified financial planner, told Business Insider. According to Faherty, you can avoid wasteful purchases by doing the following:

Figure out how much money you can allocate towards discretionary spending
Make sure each purchase fits into your spending plan
Ensure you need and will use each purchase
Determine the value each purchase would provide you, given personal preferences and lifestyle

To help you find and fix money drains in your spending habits, here are five things Faherty says are common wastes of cash:

1. Duplicates

“Oftentimes people spend money on things that they already have in the house,” Faherty said. “It happens more than you think, especially with couples who are just starting out." This could be small items, like food or cooking implements, or something more expensive, like clothing. It happens because people aren't organized, she said.

Periodically going through your closet and storage areas and checking the pantry before you leave the house to go grocery shopping are key to saving money.

2. Anything that's overpriced

According to Faherty, you may be wasting your money if you could have gotten the same item at a lower cost just by shopping around. But it depends on your situation.

Calculating the financial value of your time can help you decide whether it's worth it, for example, to visit several different stores looking for the best price on an item. How much is that extra hour of driving/shopping worth to you?

Sometimes it's fine to skip shopping around, "because time is money," Faherty said. “But if you can infuse some planning into it, then you can save on some costs."