9 Things That Poor People Should Quit Wasting Money On

CREDIT CARDS

Credit cards offer a range of advantages, as many providers offer incentives for spending, such as cash back, reward points, and airline miles. These benefits make credit cards an attractive option for managing expenses, but it’s crucial to clear the full payment every month. The downside of credit cards emerges when carrying a balance, as the high interest rates, typically around 20%, can result in substantial additional costs. For instance, a $1,000 credit card balance would accrue an extra $200 in monthly interest. To avoid financial strain, it’s advisable never to maintain a credit card balance. This principle applies to any loan or financial obligation that involves paying interest. Therefore, it’s important to carefully evaluate the worthiness of any loan or financial commitment before proceeding, considering the added expense of interest payments.

BARS/PUBS

Frequenting pubs and bars can lead to significant annual expenditures. While social activities are enjoyable, there are alternative ways to meet people without spending excessively on alcohol. Bar owners capitalize on people’s willingness to pay more for drinks, resulting in substantial costs. Hosting house parties can provide a more affordable option for enjoying drinks with friends.

LATEST TECHNOLOGY

The allure of the latest technology, as well as the desire to “Keep up with the Joneses” may often prompt people to invest in new gadgets. The appealing features and the desire to keep up with trends. However, it’s essential to conduct thorough comparisons of features and specifications before making a purchase. Experts caution that the differences between older and newer models may be minimal, making the cost of an upgrade potentially unjustifiable. Items like back massagers, fancy alarm clocks, high-end toothbrushes, and elaborate sound systems, while appealing, are often unnecessary expenses. Taking a moment to reconsider such purchases can lead to significant savings.

CLOTHING

Prominent billionaires like Bill Gates, Mark Zuckerberg, Warren Buffett, and Steve Jobs are known for their minimalist approach to clothing. They understand that wealth is not everlasting and prioritize practicality and simplicity. Embracing a uniform look or opting for functional and comfortable attire allows them to avoid unnecessary expenditures and focus on more important aspects of their lives. Repetition and maximizing the use of existing wardrobe items are key strategies. While everyone can indulge in luxuries, it’s crucial to make thoughtful decisions about purchases.

NEW VEHICLES

Buying a brand-new car is often regarded as a poor financial choice due to rapid depreciation. Vehicles can lose 20-30% of their value within the first year and up to 60% within five years. Financing a new car, which quickly loses value, is not a wise financial move. Instead, considering a slightly used car that has recently come off a lease can offer significant savings, often at around 30% less than the original price. Adhering to the 1/10 rule, where the purchase price of a car does not exceed 10% of your gross annual income, can help prevent financial strain.

GYM MEMBERSHIPS

While fitness centers provide access to equipment and classes, memberships often go unused after the initial few months. Joining a gym may not be worthwhile if you lack a commitment to regular exercise. Exploring low-cost or free workout options, such as outdoor activities like walking, running, or hiking, can be a smarter choice. Prioritizing and establishing a fitness routine that you can sustain allows you to make the most of a gym membership, should you decide to invest in one.

MONTHLY SUBSCRIPTIONS

Subscription services have gained popularity, offering a convenient way to receive a variety of products at your doorstep. However, it’s important to manage these subscriptions carefully to avoid unnecessary financial strain. They are designed to automatically charge your credit card, making it easy to overlook or forget about them. Studies indicate that consumers often underestimate the amount they spend on subscriptions. To gain better control over your expenses, consider utilizing apps or services that help track and manage regular charges and subscriptions. Some apps allow you to keep tabs on all the regular charges and recurring payments, including subscription services. Alternatively, you can take matters into your own hands by examining your last six months of bank statements and credit card bills. Identify any subscriptions you’ve paid for and decide which ones to keep and which ones to cut. Give each company a call or cancel them online accordingly.

GAMBLING

Let’s touch upon the topic of gambling, which can take various forms, from casino visits to purchasing lottery tickets. Sure, the thought of turning a small investment into a hefty sum sounds thrilling. But what will you do once you win a modest amount? It’s all too easy to get caught up in the moment and end up leaving the casino with less money than you came with. Now, I’m not saying you shouldn’t go to the casino, but there are two crucial factors to consider beforehand. First, ensure that you can truly afford it. Having money in your account doesn’t automatically mean you should spend it on gambling. Secondly, set a budget for yourself. Take, for example, $20 and once you’ve spent that amount, call it a day. Remember, responsible gambling is all about having fun within your means.

SMOKING/VAPING

Finally, let’s shed light on the costly habit of smoking and vaping, which tends to hit the wallets of lower-income individuals the hardest. Smokers can end up spending around $200 per month on a pack of cigarettes, especially if they go through half to a full pack each day. Imagine the staggering expense of $2,400 per year and a jaw-dropping $24,000 over the course of a decade! Just take a moment to think about what you could do with that money—car repairs, saving up for a new vehicle, or even a down payment on a house. If you’re determined to quit smoking, there are several effective strategies you can employ. Give your mouth something to do by chewing on sugarless gum or hard candy, or indulge in raw carrots, nuts, or sunflower seeds for that satisfying crunch. Most importantly, let your friends, family, and close ones know about your quitting journey. Their support and encouragement can be invaluable, especially during moments when the temptation to light up strikes. Remember, you’ve got this!

If you have a few minutes, comment about whether you are guilty of spending your hard earned money in unnecessary and costly ways! I know I'm guilty of most of these things. Good luck on your journey to becoming the person that has always lived within the depths of your soul. FINANCIALLY FREE!