If you want to see the funds in your bank account grow, you won’t get anywhere by spending money on unnecessary things. But it isn’t always easy to be honest about what’s a truly useless expenditure.
When analyzing your spending, take time to ask yourself: do I need this? If the answer is no, don’t buy it. If you already have it, look into selling it or getting rid of it altogether.
There are a million things we probably shouldn’t by. But here’s my list of things you should probably NEVER buy if you’re working to save cash.
DVDs – Let’s face it: a movie has to be REALLY good for you think it needs a place in your home. Once you view a movie once, how often are you going to watch it again, really? I am consistently amazed when I see people with vast movie collections, often featuring films that aren’t even that noteworthy. If you want to own all three Godfather movies, fine. But do you really need a physical copy of Failure to Launch? (By the way, this also applies to downloading movies from iTunes and other services.)
Extended Warranties – Companies would not try to sell you warranties unless they made money off of them. And the only way they’re making money off of them is if people don’t end up needing them. I got into a discussion with a man at Radio Shack recently after buying a cable for my television. It went like this:
Radio Shack Guy: “Would you like to buy the extended protection coverage on this cable?”
Me: “No thanks.”
RSG: “You sure? It will cover you in case the cable breaks or stops working.”
Me: “Do you anticipate that the cable will break or stop working?”
RSG: “No, this is a good cable.”
Me: “Well, then no thank you.”
Expensive Cooking Equipment - A good cook can make a great meal using the most basic tools. And a bad cook is not going to be helped by the latest kitchen gizmo. There’s no reason an average person can’t get by with a couple of pots and pans, a few utensils and a decent set of knives. A trip into William Sonoma will have you convinced you need a million different items for every possible cooking scenario, but most of these items are a waste of money.
Organic Stuff – To be clear on this, I’m saying you should not go out of your way to pay extra for organic food. Organic food is fine, but it’s my belief that companies are trying to capitalize on the “organic” trend by jacking up prices on these products unnecessarily.
There are many food items that were already organic but now cost more because of the label. Generally speaking, fruits and vegetables are healthy for you, whether they are labeled organic or not. Milk is healthy, no matter what kind of cow it comes from. Feel free to research where your food is coming from, but don’t get snookered into thinking you are saving the world by paying 40 percent extra for your yogurt.
Water - The H20 that comes from your tap has been filtered, tested and usually tastes fine. In fact, there are people in many parts of the world that would risk life and limb to have access to the water we can drink basically for free. (Oh, and did you know that many brands of bottled water come from municipal water supplies?)The introduction of bottled water is one of the greatest scams we’ve ever fallen for.
Whole Life Insurance - When someone tries to sell you one of these policies,they will try to sell you on the idea of the policy being both an insurance policy AND an investment. This may be true, but there are better ways to insure yourself, and MUCH better ways to invest your money.
Whole life insurance does have a cash value that grows over time, but there are other investments (diversified stocks, bonds, even CDs) that will offer a much higher return over time. Death benefits are helpful, but most people don’t need it past a certain age.
Your best bet is to get a low-cost term life insurance policy of 20 or 30 years. After that, you probably have no need for a death benefit, because you’ll have money in the bank and your kids will be old enough to be out on their own anyway.
Do you own any of these things? Were they worthwhile purchases?