There are lots of obvious ways to save more money. You can pack your lunch instead of buying it, cut back on the Starbucks, or cook at home instead of eating out. But there are some ways you waste your money that you might not have even through about yet. Here are 5 surprising ways you may be wasting money – and how to stop.

  1. Paying Late Fees

Let’s be honest – it happens to all of us. We have the best of intentions to pay all of our credit cards and bills on time, but sometimes one slips through the cracks. The problem is, that mistake will cost you. A late fee could cost $35 or more. And repeated late fees could hurt your credit score.

The problem gets even worse if you carry a balance on your credit card – as many Americans do. Then you’re not only paying the late fee, but interest on your balance as well.

How to fix it:

For starters, ask about getting that charge removed from your account. If this is your first late payment in a while, call up your credit card company and tell them so – and ask if they can cut you some slack this time. They’ll usually waive the fee for you.

Next, make sure it doesn’t happen again. The easiest way to do this is to set up automatic payments on all of your credit card, cable, electric, etc. bills. Not only will it save you late fee money, but it’ll save you time and stress when bills are due each month.

Surprising Ways You're Wasting Money

And if you’re in the group that is carrying a balance on your card, try going cardless for a while. Paying for everything with cash is a quick way to stop overspending.

  1. Tossing Expired Food

According to the National Resources Defense Council, Americans waste $165 billion annually by tossing uneaten food. That’s about $529 per person a year! And trashing unwanted or expired food isn’t just bad for your wallet, it’s bad for the environment too.

How to fix it:

Make your freezer your best friend. You’d be surprised at just how many things you can freeze. This works especially great if you’re living alone and find it hard to get through staples by yourself before they go bad. So if you buy a loaf of bread, leave out a third, and stick the rest in the freezer. Then you can take out a few slices at a time as you need them instead of throwing out the slices you don’t get to before the mold does.

On top of this, be realistic about what you’re actually going to eat. For example, I often buy lettuce with the goal of making salad for lunch. But I rarely get around to making salads to bring, and the bag of lettuce normally gets tossed. Now I walk right past the lettuce section in the grocery store since I know my lofty goals aren’t worth the waste.

  1. Not Returning Unwanted Items

I’m sure part of the reason you’ve tossed your food is because you just didn’t like it. That happened to me just last week with an avocado salsa dip I tried from Trader Joe’s. Turns out it tasted less like avocado and more like vinegar. Or maybe you tried out some new makeup only to find out it really wasn’t sure your shade. But tossing items you don’t like is a quick way to toss money too.

How to fix it:

Did you know quite a few stores will take back items you try and don’t like? Trader Joe’s will refund you for any food that turned out to be a little too adventurous for you. And Sephora and CVS will refund you for makeup or skincare items you didn’t wind up liking. I’m sure there are other stores that do the same – it never hurts to ask for the store policy if their goods didn’t deliver as expected.

  1. Paying for Shipping

In many ways, online shopping is fantastic. You can snag great deals without having to navigate parking lots or crowds. But it can also come with an added cost – shipping. That could tack on anywhere from $5-$25+ depending on how fast you want your item.

How to fix it:

I have a strict policy: I refuse to pay shipping fees. I tend to stick to websites that have offer free shipping on every purchase, like Zappos, Nordstrom, and Bloomingdale’s (just sign up for a free Loyallist membership). If the store has a minimum to get free shipping, I’ll throw an item I was on the fence about in the cart to meet the free shipping qualification. And if there’s a fee to return the items by mail, I’ll drive to the store rather than mail them back.

  1. Mutual Fund Fees

When’s the last time you checked the “expense ratio” on the elections in your 401k? Thanks to our friend compound interest, if you’re paying more than you should in mutual fund fees, they could add up to thousands of dollars less in your retirement accounts over the long term.

Surprising Ways You're Wasting Money

How to fix it:

Audit your accounts. Go through each investment in your 401k and check the expense ratio for each one. Get rid of any that are charging you more than 1% annually, and check the rest to make sure they have a good return to expense ratio. Then re-balance your elections accordingly.

You have even more options in your IRA and non-retirement accounts. In those you might want to think about skipping mutual funds altogether, and instead choose to invest in index funds. Index funds are passive, unlike mutual funds which are actively managed by a professional. That lack of active managing makes them a lot cheaper, and their expense ratios are closer to 0%.

The even better news? Studies show that passive funds often beat actively managed mutual funds over time.

If you’re looking for a way to cut back on your spending, start by seeing if you’re falling victim to one of these spending traps. You might find money you didn’t even know you were missing!

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1 Comment on 5 Surprising Ways You’re Wasting Money – And How to Stop

  1. Jess
    June 23, 2015 at 8:04 am (2 years ago)

    Great tips! I didn’t know you could return make up! Cooking and using up leftovers saves so so so much money. Sometimes it is a pain when you’re tired, but the amount of money saved is hard to rationalize not cooking most of the time.

    Reply

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