Cutting Wasteful Spending
As inflation eats up more of consumers’ spending power and the demands of saving for retirement marches into closer view, many individuals grow increasingly more doubtful of their ability to meet both current and future financial demands. Perhaps one of the most effective ways happen to also be the most within an individual’s control—reducing or eliminating wasteful spending.
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Cutting Wasteful Spending
As inflation eats up more of consumers’ spending power and the demands of saving for retirement and a child’s college education inexorably marches into closer view, many individuals grow increasingly more doubtful of their ability to meet both current and future financial demands.
While there are many ways to succeed (e.g., start a side hustle or find a higher paying job), some are impractical or out of a person’s control. Perhaps one of the most effective ways happen to also be the most within an individual’s control—reducing or eliminating wasteful spending.
Some Common Wasteful Spending Examples
According to one survey, Americans spend $18,000 per year on non-essential products and services, making the search for spending cuts to fund higher prices and future savings an achievable objective.1
Here are some ideas to realize tangible savings.
- Paying for insurance and extended warranties or protection plans that you don’t need. Some examples of potentially unnecessary coverage are collision insurance on an older car, rental car insurance and travel insurance.
- Carrying credit card debt and just paying the minimum amount. At interest rates of up to 20% or higher, Americans fork over substantial amounts of their money to credit card companies needlessly.
- Impulse buying. Just stop the madness! Always take a day or two to decide to make a purchase; by then the urge to buy will have diminished.
- Cancel all the unused memberships and subscriptions. Rather than multiple streaming subscriptions, try sequential subscriptions (e.g., three months on Netflix, then three months on BritBox, etc.).
- Prepare more of your own meals. The costs of eating out or paying for delivered meals are massive. Don’t believe it? Take a month to track those costs.
- Stop buying overpriced luxury beverages. Yes, that means those $5-plus coffees and $4 waters. They are financial death by a thousand cuts.
- Cut energy waste. Some ways to do this is to stop setting air conditioning at too low of a temperature, especially when the house is empty for hours, or keeping the outdoor lights on all night, particularly in safe neighborhoods.
- Leasing a car every two or three years. Never ending car leases institutionalizes $500-$1,000 monthly spending on vehicles for little benefit. Yes, it may be nice to have the latest technology gadget, but is it worth sacrificing future financial security for?
The benefit of greater financial security, today and tomorrow is not the only benefit of cutting wasteful spending. By reducing unnecessary purchases and conserving energy use, you will also be rewarded with the satisfaction of making a meaningful contribution toward a cleaner, more climate-secure world for you, your children your grandchildren!
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