21 Ways You’re Wasting Money, and How to Fix Them

1. Coffee ($500)

The average household spends over $1,000 a year on coffee.  That’s why you see a Starbucks on what feels like every corner!  Just cutting that in half could save you $500 or more a year!  If you still need your caffeine fix, brew it at home.  Smoothies and other exotic drinks could be costing you too.  Again, make them at home!  And when you don’t, use a coupon or find a happy hour.

2. Alcohol ($600)

The average household spends over $1,200 a year on alcohol.  It gets expensive, especially when we’re out at restaurants, clubs, and other places.  To save on alcohol, it’s simple – drink less!  Especially outside the house.  Settle for one round instead of two.  Go out a little less and when you do, hit up places that have great happy hour options.

3. Restaurants ($1,500)

The average household spends over $3,000 a year at quick serve and full-service restaurants.  A lot of that is driven by eating out for lunch every day.  To save money here, cut back on how many times a week or month you eat out.  Plan ahead and make your lunch.  Even the ready-to-eat meals usually cost half as much.  When you do eat out, use a coupon and leverage loyalty programs.

4. Delivery fees ($650)

The average household spends over $650 a year on delivery fees, mostly related to restaurants.  It’s amazing how quickly GrubHub, Doordash, UberEats, and others have grown.  But they aren’t cheap – they often double the price of a quick serve meal!  Minimize delivery unless it’s justified by extra billable hours or saving you money on driving yourself.  And be careful with the “free fees” offers – there’s usually still plenty of markup involved.

5. Wasted food ($900)

The average household wastes a lot of food each year – over $900 worth!  It’s a product of buying too much in bulk and buying things you forget to use.  Warehouse stores are a big culprit.  It may seem cheaper to buy in bulk, but unless you use it all, it often costs more.  Check the unit amount (i.e. per ounce) – bulk sometimes costs more because they know you’ll buy it while you’re there!

6. Convenience items ($250)

The average household spends over $250 for convenience items at gas stations and other places where there’s a large markup.  Sometimes you can’t avoid it (like at airports where you can’t take drinks through security).  But often with a little planning ahead, you can buy things at 30-50% of the price that convenience stores charge.  My family and friends often poke fun of me for having plenty of snacks on a road trip…until they get hungry!

7. Groceries ($800)

The average household overpays on groceries by over $800 each year.  Prices between grocery stores can vary dramatically – often by 30-50% for the exact same item!  Given that groceries are one of our biggest costs, it’s worth shopping around a little and figuring out which store is cheapest for the items you spend the most on.  Consider price and volume.  For example, my family drinks three bottles of orange juice a week.  At one store, it’s $3 per bottle and another, it’s $4 per bottle.  That’s $150 savings a year just on one item – that’s like a free weekly trip to the store!

8. Impulse buys ($500)

The average household spends over $500 a year on impulse buys – unplanned expenses big and small.  It’s not just shopping malls to blame – Amazon and other online retailers make it so easy to buy online.  Think twice before hitting that BUY button.  If it costs more than 0.1% of your annual income ($100 for someone making $100,000), wait a day and see if you still need it and if so, then buy.

9. Entertainment ($1,400)

The average household spends over $2,800 a year on entertainment.  While that might seem reasonable, if you’re struggling financially, it’s an easy way to cut back.  It’s more expensive than ever to go to sports games, concerts, and even movie theaters.  Buy cheaper seats.  Go out half as much.  Bring your own concessions.  Consider an at-home option where you can split it with friends!

10. Unused subscriptions

The average household wastes over $300 a year on unused subscriptions for digital and physical products.  Subscriptions have become extremely popular over the last 20+ years – they make revenue much more predictable, which makes business planning much easier.  They can be a good deal, but only if you use them.  Review your expenses regularly, and keep a list of all the subscriptions – how much, how frequent, when they renew, and when you have to cancel.  If you don’t use them, get rid of them!  One other tip for this category – share subscriptions like streaming services if you can!

11. Vacations ($2,500)

The average household spends over $5,000 on vacations.  There’s nothing wrong with enjoying a nice vacation – when you’re taking care of the rest of your finances first – but it’s an area where people often splurge unnecessarily.  You can often get two vacations for the price of one if you don’t opt for every upgrade they offer.  If money is tight, there are endless options for low-cost vacations, especially if you enjoy nature!  Planning ahead and having some flexibility for last-minute deals can make a big difference.  So can using loyalty points and reward cards.

12. Gambling ($300)

The average household spends over $600 a year on gambling and lottery tickets.  Your odds of winning don’t justify the expense when you can’t afford it.  You’re better off investing $10 a week.  That can add up to over $10,000 after a few years!  Even just spending half as much could make a huge difference.

13. Designer clothes ($700)

The average household spends over $1,400 on designer clothes.  I bet you a good chunk of those clothes never even get used (it’s happened in my house…)!  Again, a couple of nice outfits a year is probably okay, but keep it reasonable, especially if you’re trying to pay down some debt or build up an emergency fund.  When you do shop for clothes, buy them off-season, at outlet malls, and at overstock stores.

14. Dry cleaning ($300)

The average household spends over $400 a year on dry cleaning, and a lot of that is on clothes that don’t really need it.  Sure, some items like suits are best taken to dry cleaners, but we’re wearing formal attire less than ever as casual dress is now the norm in the workplace.  Dry cleaners offer a lot of coupons and weekly deals – take advantage of those when you do really need to use them.  If you need dry cleaning a lot, there are some at-home options, including fancy steam-capable washers and dryers.

15. Storage units ($1,100)

The average household spends over $1,100 a year on storage units.  And sadly, a lot of that is to store stuff that isn’t really needed.  I know a few people that have paid more in storage units over a 10+ period than it would cost to replace the contents with all new items!  The best way to avoid storage costs is to avoid accumulating stuff you don’t need or don’t use.  A great approach I try to use is the 1-in-1-out rule.  When something new comes into the home, something else must go.  It’s a great way to ensure you have enough space for the things you truly need!

16. Big houses ($6,000)

The average household wastes over $6,000 a year with all the costs related to living in a bigger house than they need (mortgage, interest, utilities, taxes, insurance, maintenance, etc.).  Those extra costs add up quickly, and it’s important to ask yourself it’s really worth it.  If it makes sense, splitting the costs with a roommate or two could help, at least as a temporary solution.

17. New cars ($3,000)

The average household wastes over $3,000 a year by buying new cars too frequently or with more expensive pricing than they can justify.  Too many people go from one car loan to another before they’re paid off, just to impress others.  Cars lose so much value the first few years of their useful lives, and It’s sad how much money is spent on something that loses so much value, not to mention the interest to finance it!  Car companies are great at marketing, but don’t let them get you in over your head.  Even if you do feel compelled to upgrade regularly, keeping your car just a year or two longer can save you thousands of dollars a year!

18. New phones ($300)

The average household wastes over $300 a year by constantly upgrading to the newest phone.  It’s tempting to have the flashiest new phone, but it comes at a cost.  Just like new cars, it’s best to keep them as long as you can before you upgrade.  Cell phone companies are also great at marketing and convincing you to upgrade by paying monthly where the cost seems less.  Make sure you understand the total cost (including all those fees) and consider going for a model that’s not brand new to get the best deal.

19. Insurance ($500)

The average household overpays on insurance by over $500 a year.  It may seem like sticking with the same insurance company would build you up some nice discounts, but it usually has the opposite effect.  Make sure you bundle if you can and only get the coverage you need.  And when you’re being diligent with the other items above, there’s less you need to insure!

20. Greeting cards ($50)

The average household spends over $100 a year on greeting cards.  This one might seem silly, but that’s a lot of money for some pieces of paper that get tossed in the trash after a minute or two.  I’m not saying to eliminate greeting cards completely (although personally, I’d be fine if someone just gave me one dollar instead!), but consider getting the cheaper ones for kids that really don’t care, or print your own.  My grandfather has printed his own greeting cards for years, and as many as he sends, that’s saved him thousands of dollars!

21. Credit card interest ($600)

And of course, there’s the credit card interest to finance all of the above.  The average household spends over $600 a year in credit card interest, and for many people, it’s a whole lot more.  It’s entirely avoidable if you make it a point to spend less than you earn and only on what’s really important.  If you have credit card debt, make it a priority to pay it off as quickly as you can.  If that seems too difficult, start with items 1-20 above.  It might help to cut up credit cards so you’re not tempted to use them.