Most of us are Guilty of Wasting Money

Most of us are guilty of wasting money. We pay too much for convenience. We don’t comparison shop or look for bargains. We waste money staying in the same routines–shopping at the same stores, eating at the same places, using the same services. We may not even realize how much money we are wasting.

While this information may not apply to you, there are others in your life such as children or grandchildren that will benefit from this information. For those with budgeting discipline, an element of your financial legacy teaches and trains others to live within their means. As these disciplines are learned by your beneficiaries, you gain greater comfort that valued purposes will be pursued with distributions.

The Key Takeaways

• Tracking and evaluating how money is spent helps illustrate areas of waste.
• Overspending can drive people into debt and prevent them from having money for things that really matter.
• Reducing wasteful spending helps people to live within their means and provide more money for things that are most important.

Major Spending Areas … And Actions to Consider

1. Housing

Living close to where one works definitely can save time and money on a commute, but moving to a neighborhood just a little farther out can save a bundle. If someone is retired or works from home, moving to a less expensive part of the country is an attractive option.

2. Interest

Credit cards, student loans, car loans, home mortgage, home equity line of credit, other consumer loans–any time money is borrowed, interest payments accumulate. The most expensive of all is credit card debt. By renegotiating interest rates, not only are monthly payments reduced but considerable amounts of accumulated interest are also saved. Great care must be taken when considering buying anything via debt.

3. Transportation

Car payments, insurance, gas, maintenance and repairs are necessary expenses, but there may be ways to economize. Some people can work from home one or two days a week. Since a new car depreciates the minute it is driven off the lot, buying a previously owned car can save thousands.

What You Need to Know

Eliminating wasteful spending is especially important for people who must watch their expenses–retirees who may be on a fixed budget, those who have been laid off or are working part time, young families and college graduates who are trying to start a career while repaying student loans. But even if plenty of money is at hand for living expenses, being a careful consumer helps money go further and adds important lessons to be passed to loved ones as a component of a financial legacy.

Other Actions to Consider

• Evaluate housing, interest and transportation expenses.
• Determine how much to spend in these high-cost areas and how much can be cut.
• Check out different neighborhoods and transportation options and see how much money can be saved.
• Call lenders and their competitors to see if better interest rates can be negotiated.
• Pay off debt when possible.