Like it or not, most Americans are wasting money every day!
One thing we all hate is wasting money. And as frugal people, we do not want to end up losing them; we want to be able to save them! But how do we all end up wasting money?
There are a lot of ways in which we are not as financially savvy as we want to think we are, and those are the blind spots that make us lose money.
After all, if your financial strategy is not as great as you think it is, you may as well be throwing money away every single day.
Instead of keeping this money, you are actively losing it, and in the long run, this is money that you could have saved and invested.
If you want to see how you are slowly bleeding money each day and how you can stop it, along with a possible plan of action to instead flip the coin and turn wasting money into making money, make sure you keep on reading!
Sure, not all of them will work for your situation, but you will find yourself in at least one, so make sure you read them all!
You’re not getting any professional help
A lot of people end up wasting money because they do not work with a professional to optimize their savings.
Sure, you may think that it would be a waste of money to go and get advice from a professional, but in the end, it is cheaper than seeing your money go down the drain or not accumulate as fast as you would want it to.
Studies have shown that if you manage to invest your money carefully, you can end up getting impressive gains, but even better results if you get the help of a professional.
For example, one study has shown that if you hypothetically invest $500,000 carefully, you can make it grow into $1.7 million over the course of 25 years.
However, if you make the same investment and work with an advisor, you can end up making $3.4 million with their help. That is not a small profit margin whatsoever!
Obviously, the everyday Joe will not have half a million lying around, ready to invest on a whim.
However, if you plan to gather money and invest a higher amount or if you find yourself with a surplus to invest from an inheritance, you should consider talking with a financial advisor.
If the amount you have amounts to at least $100,000, you should go talk with a trusted and vetted financial advisor so that you can get the best bang for your buck.
However, if you do not want to have someone else pick out some of the investments that are going to be the best ones for you, you can just ask them how you can lower your taxes in relation to your investments, and they can help you create a comprehensive financial plan.
Likewise, a financial advisor can help you get the most out of your Social Security, and they are the best people to go to if you need a second opinion or just someone to help keep you on track for a healthy investment fund.
You’re paying too much interest on your credit card
Yes, you read that right. Sometimes it may be the one thing that we fall behind on that ends up ruining our savings. And when we look at the data, the interest you pay on your credit cards starts to sound out of this world.
Data shows that the average card interest rate ends up approaching a staggering 25%, a record high in history! When we think about how high these are, they start to be more like loan sharks than credit cards!
The best practice is to make sure you never borrow money recklessly, and when you have to use your credit card, you end up doing it right.
A tactic that has been successful for some people is to take advantage of borrowing against their homes since the rates are lower.
The loan, which can have a rate as low as 6.75%, can end up helping you fix your home, pay off any high-interest debt you may have accumulated, or help you when you need it. Just pay close attention to not financing a lifestyle you definitely cannot afford because the debt will eat you alive.
This type of loan is a fraction of what credit cards charge, and over the course of paying it back, you will be saving thousands when compared to credit cards.
However, be careful if you want to go down this route. It is not something to be taken lightly since you are literally going against your home, and this can go south easily. With a credit card, you will not have this issue, but the bank may end up selling your assets if you do not pay your credit card bills.
Do the math, be careful, and ask someone trustworthy (like a professional) which one is the best choice for you.
Car insurance is eating your savings
One thing that most Americans end up overpaying for is car insurance. And chances are you are also overpaying for it.
Sure, it is easy to keep having the same car insurer over the years, but when your policy starts to go up year by year, it starts to be an issue.
There are many factors that end up calculating how much you will have to pay in car insurance (track record, age, car model, and tickets being just some of them), but there are ways through which you can lower the cost.
Likewise, nothing stops you from shopping around to see which car insurance company is going to offer you the best deal.
While it can be quite annoying, there are some online calculators that will compare quotes across the entire United States to see which provider is going to be the best fit for you.
You can also just search for the most reputable and most sought-after providers and see which one will give you the best quote.
The main idea is to make sure you take charge in this facet of your life, as you can easily end up getting a lower quote and thus save thousands over the years that you would have otherwise been wasting.
The difference can go into a savings account or be used to pay other types of debt. Just make sure your current provider is not overcharging you because they can.
Maximize your savings
You have to be proactive when it comes to your savings, too. Sure, the likes of 0.4% interest and 0.5% interest do not seem to be that different, but believe us, in concept, there is a big difference.
A lot of people end up disregarding these interest rates, and if you continue to ignore them over time, you can end up wasting money since you have not done your due diligence.
Many savers will go with their bank’s savings scheme, and a lot of these have pretty low interest. For example, you can end up saving $500 a month in an account with 0.5%, which in 30 years will leave you with a cumulative $195,000!
That’s amazing! However, what if we told you you could be making $350,000 at the end of those years? That is if you end up looking around and finding an account with 4% interest.
This is a $155,000 difference with no effort on your part, and that is definitely going to make a difference.
All you will have to do is shop around and find an FDIC-insured savings account that has the highest interest rate. You will be saving that money either way, so why not make the most of your money?
Online, you can find a couple of online comparison sites, and you will be able to easily check without having to drive around banks.
Take charge of your finances and stop wasting money today!
If you are not sure yet how you can get into investing smartly and safely in this new landscape, make sure you check out this Investing QuickStart Guide.
There are many ways to stop wasting money, but there are also many other ways to save money too! If you want to make sure you are saving as much money as you can, read about all the unnecessary purchases you need to stop making now!
