Consumer spending is alive and well contrary to many beliefs, but that does not mean that people are out of debt; they are simply not buried deep anymore. Studies show that Americans spend an extra 15% of their income on unnecessary purchases. Here are the top products that Americans waste their money on and the average cost per year they spend on them:
10 - Apparel Products and Services - $249
9 - Tobacco - $380
8 - Entertainment Equipment and Services - $400
7 - Alcohol - $435
6 - Fees and Admissions - $628
5 - Lodging, Vacation Homes and Hotels - $672
4 - Pets, Toys, Hobbies and Playground Equipment - $690
3 - Television, Radio and Sound Equipment - $975
2 - Gifts - $1,067
1 - Food Away From Home - $2,619
In order to figure out how to cut your spending, you need to track your spending to see where your money is going. From that, you can figure out where your budget fat is and how to reduce that fat. After you cut all the fat off, you will be able to redirect the money to paying off debt or to another area of spending that needs it more. The place to begin trimming fat would be in these ten categories of spending, and here are some helpful tips on how to do it.
Some examples of what would be considered apparel products and services are: dry cleaning, clothing rentals, jewelry repair and clothing and shoe repair. Instead of relying on a repair shop to repair your items, learning how to sew can save you money in this category. Borrow suits and clothing that you need for a day from a friend instead of spending the rental fees.
Tobacco includes cigarettes, cigars, pipes and chewing tobacco. The easiest solution to saving money in this category is to get a handle on smoking. This is obviously not very easy for most people, making this category hard to cut. Americans spend more on tobacco than they do fresh fruit and milk combined each year.
Products in the entertainment equipment and services category include hunting and fishing equipment, sports equipment, bicycles, camping equipment, etc. If you are on a budget, this equipment should probably be rented if you are only going to be fishing once or camping once instead of buying everything new. That will reduce your spending on entertainment equipment.
Americans spend more on alcohol each year than they do on all non-alcoholic beverages combined, and the majority of the alcohol beverages being purchased are for consumption at home. Unless you are looking to learn how to ferment your own wine and brew your own beer, the best way to cut back here is to always drink alcohol in moderation. A beer here and there or a glass of wine once a week will bring down the cost of alcohol purchases yearly. Make alcohol a treat not an expectation.
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Going to the movies with your family is getting costly these days and so are going to see live concerts. The fees and admissions expenditure is just that, admission to sporting events, movies, concerts and movie rentals. Look for fun museums and zoos that have free admittance. There are some out there still, so take advantage of them. If you want to splurge and see a movie in a theater, see a matinee showing. Even just doing that saves you a few dollars every time. With Redbox and other movie rental places, renting a movie is the cheapest solution. Create a movie atmosphere at home and cuddle up to a rented movie on a Friday night instead of going out and spending money on a movie in theaters.
Going on vacation requires a place to stay, which is where lodging, vacation homes and hotels come into play. If you are struggling to make ends meet and still want to take a vacation, visit a friend or family member and stay with them. This means you still get a vacation, but without the costly lodging expenses.
Having a pet adds up. You have to pay for food, veterinary bills and toys for them. If you are trying to cut back on spending and you do not have a pet, do not get a pet! If you already have a pet, watch for pet food to go on sale and collect coupons to save you money on their food. You do not need to buy your pet a new toy every week. A few toys are good enough. The veterinary bills are hard to cut. If your pet gets sick, you have to take care of them. Look around for the best prices for vets, and do not settle on just the first one you go to.
The average household spends almost one thousand dollars on cable TV, video game hardware, movie players and sound equipment. You probably can find quite a few television stations you never watch or even care about having. Get rid of them then; scale back to the basic channels. That will reduce the cost of your cable bill. Do you still have your old VHS player and maybe even an old DVD player? Try selling them back to a used electronic store to put money back in your pocket.
Giving gifts is an awesome way to spend money, but there are ways to give a more meaningful gift and still keep to your budget. Get creative here. If it is a family member or a best friend, think about something special between the two of you and make it. Do some research and get crafty with it. It is not about how expensive the gift is, but how meaningful it is.
Last but not least, food away from home is the most wasteful way Americans spend money. Yes it is much easier to get take-out or eat at a fast food restaurant for lunch everyday, but it is a big waste of your money. Take your lunch to work and bring your own drink. This will cut down your spending in this category immensely. When you are cooking for your family or yourself, make big batches so you have leftovers for other meals. You can take the leftovers to work for lunch. Another costly expense is coffee. Brew your own coffee at home. The average American spends $1,095 a year on Starbucks coffee. Just brew it at home and save the money for other necessities.
Rule #1 when trying to budget your money, figure out what you really need and want verses what you can do without. The ten categories talked about above are arguably a waste of hard earned money. So, find your budget fat and start reducing!
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