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6 Big-Time Money Wasters

FaithFi: Faith & Finance | May 2, 2024


Show Notes

Okay, before we get into the specific money wasters, there’s a general principle you should be aware of…if you’re buying things that provide only a temporary sense of satisfaction, you’re probably wasting money. It doesn’t matter what it is—if it’s unnecessary and you grow bored with it, it was a waste of money. Check your closets for examples.

I’m not saying you should take a “vow of poverty.” The Lord wants us to enjoy the resources He’s given us, but that must be tempered by the principle that we’re merely stewards and must use His resources wisely.

Of course, we live in a culture that promotes spending. It’s a big problem. One survey showed that the average adult spends around $1,500 monthly on non-essentials. No wonder so many Americans are living paycheck to paycheck. Imagine what that kind of money would do if put into savings or invested for retirement.

Let’s look at our 6 money wasters for today…and what you can do about them.

  1. The first is one of the biggest—but also one of the easiest to fix—not preparing meals. It’s okay to eat out occasionally…but too often it’s just for convenience and unnecessary. 

A restaurant-prepared meal will cost you three times what you would pay for the same meal cooked at home.

  1. Money-waster number two…upgrading your smartphone when a new one comes out. For example, the iPhone 15 could cost as much as $1,600…or lock you into a long contract if your carrier provides it. 

Eventually, a smartphone will have to be replaced…but the longer you delay upgrading…the more money you keep in your pocket. This year’s red hot phone is next year’s discount model. And you have to ask how smart your phone needs to be. Most of us don’t use the features we have now. 

  1. Okay, number three…Clothing is another biggie. Wearing the latest fashion is expensive. By some estimates, the average American spends nearly $2,000 a year on clothing. And in a few months, whatever you buy will probably be out of fashion. 

Clothes wear out and need to be replaced…so you must include that in your budget … but those spending decisions should be practical … not a way to boost your ego.

  1. Money waster number four … buying lottery tickets. The ads say “You can’t win if you don’t play,” but that’s nonsense. You definitely will win if you don’t play. You’ll get to keep your money. You have better odds of being hit by lightning twice than winning the lottery. 

Plus, you don’t want to participate in something that disproportionately hurts the poor. A Bankrate report found that low-income households spend as much as 13% of their income on lottery tickets—far more than higher-income earners.

  1. Okay, number five…extended warranties…especially for automobiles. It’s now a $40 billion-a-year industry…and just an expensive form of insurance you probably won’t need.

So, instead of buying an extended warranty, do your homework to ensure you’re buying a quality item. Most will have an adequate manufacturer’s warranty anyway. Then, ensure you have enough money in your emergency fund to cover any necessary repairs.

  1. And our number six big money waster is … your cable or streaming package. If you’re still paying for cable, it could be as much as $200 monthly for Internet and TV. Do you need 568 channels?

More and more folks are dropping cable and satellite TV and using only streaming apps, but even there, you can waste a lot of money. 

A survey by FinanceBuzz showed that a quarter of households have at least three more streaming apps than they did two years ago…and one in 10 reported having no idea how much they’re spending on streaming.

So keep track of what you’re watching, and if you’re not getting your money’s worth from an app, drop it. That’s one great thing about streaming apps—no service contract, so you can drop it anytime.

Okay, those are your 6 big-time money wasters. We hope you find this helpful.

On Today’s Program, Rob Answers Listener Questions:

  • My 19-year-old daughter is looking to purchase a car and has found one she likes with low mileage. She has also had a mechanic inspect it. My husband and I thought the daughter should put down half on the car instead of paying in total to help establish credit, but I wanted to ask if that was the best approach. 
  • I have around $9,000 in two retirement accounts, about $18,000. However, they want to withhold 20% plus fees to withdraw it, which would be around $2,200 from each account. Is this normal? I need the cash reasonably quickly.
  • I have around $135,000 in retirement accounts that will mature in July. Do you have any advice on what I should do with that money? I'm 69 years old and mostly living off of social security right now, with little savings but not much.
  • I will be 68 in September and have lived off my savings for the past year. I know how much I spent in that time. I started taking my Social Security benefits, but now want to wait. I have about $42,000 in savings, my house and cars are paid off, I have around $260,000 in an IRA, and another $105,000 in a guaranteed annuity paying 4%. Would suspending my Social Security benefits and letting them grow while drawing from my IRA makes sense? How much would I need to draw each month?

Resources Mentioned:

Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network and American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community and give as we expand our outreach.

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