Are You Throwing Money Away Without Realizing It? We all have those sneaky habits that drain our wallets, whether it’s buying lottery tickets or paying for unused subscriptions.
These small expenses add up fast, costing you more than you think. Here are the 8 unnecessary things Americans waste too much money on.
1. Lottery Tickets
One of the most commonly cited wasteful things Americans waste their money on, according to statistics and various surveys, is lottery tickets. The odds of winning are astronomically low. Yet, millions of Americans regularly buy them in hopes of striking it rich.
On average, Americans spend around $70 billion annually on lottery tickets, which breaks down to hundreds of dollars per household each year. Many critics consider this a wasteful expenditure, especially since the likelihood of a significant return is virtually nonexistent.
Instead of wasting your money on lottery tickets, why not invest it in something that could actually grow? Apps like Acorns or Stash allow you to start small and invest automatically, building real wealth over time. It’s like a lottery where you’re guaranteed to win something in the long run!
2. Extended Warranties
Extended warranties are often pushed on consumers when they buy electronics, appliances, or vehicles. According to Consumer Reports, many extended warranties don’t cover issues that are likely to arise, and most people never use them.
The Federal Trade Commission (FTC) suggests that in many cases, repairs will cost less than the warranty itself. Retailers make a significant profit from these warranties, which is why they push them so hard, but consumers generally lose out.
Rather than sinking money into these add-ons, why not create an emergency fund? By setting aside a little each month in a high-yield savings account, you’ll have the cash ready for any unexpected repairs.
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Building your savings is much smarter than paying for warranties you’ll likely never need. Check out CIT Bank for great rates that’ll help your money grow faster.
3. Fast Food
Fast food is convenient, but it’s costly and often unhealthy. Americans spend over $200 billion annually on fast food. On average, each person spends over $1,200 per year at fast food chains.
The cost is not only financial but also impacts long-term health, leading to increased medical expenses down the line due to poor diet choices. Many critics argue that the convenience factor is driving this wasteful habit.
If you’re trying to cut back on this expense, consider meal planning or using grocery shopping rewards programs that offer cash back on healthier food alternatives.
With just a little bit of effort, you can cook at home and save money. Plus, with rewards programs like Rakuten or cash-back credit cards like the Capital One Savor, you’ll even earn money on your groceries!
4. Gym Memberships (That Go Unused)
Americans spend billions on gym memberships, with estimates around $1.8 billion annually on memberships they don’t use. A significant percentage of people who sign up for a gym membership rarely or never go after the initial enthusiasm fades.
Gyms count on this by selling more memberships than their facilities could actually accommodate if everyone used them regularly. This turns into a huge waste of money, especially when people could exercise at home for free.
Why not try online fitness programs or apps that bring workouts to your home—at a fraction of the cost?
Platforms like Beachbody on Demand have all the classes you need. And if you really want to keep some perks, use a cash-back card like the Blue Cash Preferred® Card from American Express to get rewards for wellness-related purchases.
5. Subscription Services (Unused)
From streaming services like Netflix and Hulu to subscription boxes (beauty, food, clothing, etc.), Americans spend billions on subscriptions they often forget about or don’t use regularly. On average, consumers waste about $300 annually on unused subscriptions, according to surveys.
Automatic renewal practices make it easy to forget about these charges. Streaming services alone cost the average household around $1,000 per year, with many not fully utilizing the service.
Use a subscription tracking app like RocketMoney to stay on top of your subscriptions and cancel the ones you don’t need. Imagine how much you could save just by cutting out unused services!
6. Bottled Water
Americans spend about $16 billion annually on bottled water. This is despite the fact that in most parts of the U.S., tap water is clean, safe, and costs a fraction of the price.
The Environmental Protection Agency (EPA) and other experts often highlight that the quality of tap water in many areas rivals or exceeds that of bottled water, making bottled water a prime example of unnecessary spending. This expenditure also contributes to environmental waste from plastic bottles.
Why waste money on bottled water when tap water in most areas is just as good? Investing in a home water filtration system not only saves you money but also helps the environment by reducing plastic waste.
Grab a reusable water bottle and say goodbye to the costly and wasteful habit of buying bottled water. Need help getting started? Use a cash-back card like Discover it® to save on home improvement purchases, or check out products like Brita filters.
7. Cable TV Packages
Despite the growing trend of cord-cutting and switching to cheaper streaming services, many Americans still pay for expensive cable packages. The average cable bill in the U.S. is around $217 per month, or more than $2,600 annually. A large portion of that is spent on channels that are rarely or never watched.
With plenty of cheaper, more customizable alternatives available (such as streaming services or pay-per-view options), this is often viewed as unnecessary spending.
If you’re still paying for cable TV packages but only watching a few channels, it’s time to cut the cord. Services like Sling TV or Philo offer affordable, customizable streaming options, and you’ll only pay for what you actually watch.
8. Daily Coffee Shop Purchases
The daily habit of buying coffee at popular chains like Starbucks can add up significantly. Americans spend over $1,100 per year on coffee, with the average cup costing around $3 to $5, depending on the city. For those who grab coffee every day, the cost adds up quickly.
Many financial advisors point out that making coffee at home could save thousands over a few years, but the convenience and social aspect of going to coffee shops keeps people spending.
Love your daily coffee fix but hate how much it costs? Brewing coffee at home is way cheaper, and you can make it just the way you like it. If you can’t give up your café habit entirely, try signing up for a rewards program that offers points or discounts for frequent purchases.
Cashback credit cards like the Chase Sapphire Preferred will earn rewards on your coffee shop visits. Over time, you’ll see how much you can save without giving up your favorite morning ritual.
Bottom Line
Now that you know where your money might be slipping away, it’s time to take action. By making small adjustments, like cutting out unused subscriptions or investing instead of buying lottery tickets, you can stop wasteful spending and start growing your savings.
Remember, financial success isn’t about making drastic changes overnight. It’s about smart choices that add up over time.
Take control of your finances today, and watch your money work for you, not against you!
