The world is full of purchasing opportunities and everywhere you turn, there’s an ad telling you to purchase something else. The sad truth is that many people are spending far too much for some of the “traditional” expenses.
These are the top 5.
Number 5: Cars. Purchasing a car off the lot kills your investment. You overpay for a car that is going to lose half its value in the first five months. Purchase used cars that are a couple years old. You’ll usually get them at about 25 – 30,000 miles and get a much cheaper price for them. Don’t overpay on your car. By overpaying on your car now, you will have that much less equity later on down the road incase you ever need to utilize the equity in your vehicle via an auto title loan.
Number 4: Phones. How often is the public sucked into a new phone? Is it fair to say every 6 months or so? Apple releases new phones/software packages every August. Samsung releases new Galaxies every year too, not to mention every other phone competing on the market. Some people buy into this addiction and purchase a new phone within a year. It’s an expensive and unnecessary habit. Purchasing one smart phone and using it for two years will get you much of the same enjoyment of calling people and internet access as the one switching them out every six months. Why spend money on something you already have?
Number 3: College. Some think that college is worth any price. But is it really worth tens of thousands of dollars extra in debt if you can get the same education at a cheaper school? Much of the quality of your education comes down to your dedication. A BYU law student has the potential to get a very similar education and have just as successful of a career as a Harvard graduate. They just have to put in the work to make it happen, like the students at Harvard.
Carefully research your options before choosing a school. You’ll likely find a cheaper option out there for you that can give you similar opportunities.
Number 2: Clothes. Clothes are extremely overpriced. Shop at any of the chain stores in the mall and you’ll be paying the company approximately 500% of the cost it should. Clothing stores make a fortune off of consumers that need the newest brand clothing. Since fashion is an extremely popular subject, people are willing to pay for their fashion, even if the quality is no better than a shirt you would buy from Walmart.
Look for cheaper alternatives for clothing. Look to Kohl’s, and other more customer-minded stores that care more about providing deals, than making an unfathomable profit. Although they still can make a profit off of you, they aren’t going to overprice their clothing as much, meaning you spend less for new clothing.
If you need cheaper than that though, you can always look to the used stores. Some shops exist—such as Plato’s closet—that will buy lightly used clothing from people, clean it, and then turn it around for your perusal at extremely discounted prices. Like rich car fanatics, some people have the money to buy clothes, wear them for a year, and then dispose of them. And they end up in places like Plato’s for your consumption at a much cheaper price.
With so many options abound, don’t go to the mall. Don’t shop at the mainstream, popular stores. You’ll walk out with a much bigger bill for half of the product available elsewhere.
Number 1: Credit Cards. A continual open line of credit feels like having an increase of a couple thousand dollars in your salary. Instead of being limited by what you make every month, suddenly someone else wants to give you money too. And since that money doesn’t have to be paid off for another month, it’s easy to fall into the habit of imagining yourself being responsible with your money, next month. That mentality combined with neglecting the current balance can drive you into more debt than you would want to be in at the end of every month. Even spending $100 extra every month will amount to $12,000 of accidental purchases over a decade. Imagine what you could have been doing with that $12,000 instead of purchasing meaningless extras.
People spend far too much on credit cards because they’re not keeping track of what they can afford. Keep a close eye on your finances (daily) and don’t let balances slip your notice.
So beware when approaching a car dealer, phone salesman, college admissions, clothing retailers, and your bank account. If you watch each expense carefully, you can keep yourself from many of these traps.