You have to treat yourself sometimes but if you are treating your self all of the time, you might need to take a better look at your finances. One of the ways that people like to treat themselves is on vanity products. Things that you buy just because you see others with them or so that you can look rich and successful.
Wasted money on vanity products can be a real problem, especially if you are not currently saving 10 to 20 percent of your take home pay. Here are 4 things that people love to waste money on, but probably shouldn’t.
For most of us, we have to have a car. America is full of wide open spaces and with the average commute to work being 16 miles, a vehicle is important. Unfortunately, many people value form over function in this category which can result in some very unnecessary spending.
If you have the money to spend on these vehicles, that is one thing but if you desperately need money for your savings, you have a very big problem. So, if you are already saving 20 percent of your take home, you can stop reading right now, enjoy your spending. For the rest of you, here are some ways to save money on your vehicle.
1. Get The Base Model
Okay, you like a certain make and model of vehicle. Perfect, go get it, but save money on all of the little extras. You can almost double the cost of most vehicles by adding on all of the latest creature comforts and technology. As far as tech goes, it is wasted money. Your phone probably does it already. Luxury is also nice but is it worth doubling the price of your ride to get leather and heated seats. The novelty wears off quickly and you will not get much of the money back for these things at trade in.
2. Choose Practicality Over Bling
What is your car primarily used for? Probably getting to work and shuffling the kids around. Choose something that is good for that purpose without all of the bling. That domestic SUV might not have all of the bling of that 4×4 import but when you retire 5 years earlier, you will be glad you made the sacrifice.
3. Think About The Extra Costs
A lot of times, people do not think about all of the little extra costs that come with a more expensive vehicle. Sure, the car payment might be 200 to 300 dollars more but it does not stop there. It probably gets less gas mileage, will be costlier to insure and much more money to maintain. That can add thousands of dollars of expenses in just a single year.
Needless technology is not only found in our vehicles, but also in our homes and on our person. Are you a tech hound? Well, if you are saving like you should, good for you. If not, you may need to cut back on your passion for the latest and greatest. Here are some ares to look at
1. Home Entertainment
One of the biggest culprits is home entertainment. It is constantly evolving with bigger and better televisions, higher and higher levels of definition and of course speed. It seems like things are outdated after only six months or so. Is it really worth hundreds or even thousands of dollars a year to keep up with seemingly insignificant improvements? Probably Not.
2. Cell Phones
For most people, this is a huge annual expense, especially if you are an Apple person.There is a new major release twice or even three times a year. While a modern phone can easily now last 3 to 4 years before showing its age, so many people think that they need to replace theirs annually. These days, that is about 1000 dollars. Not an insignificant expense.
3. Misc Tech
Besides phones and home entertainment, there are a ton of ways to blow money on tech. Electronic devices like Apple watches, video games, home automation, etc, etc. Before you purchase these things, ask yourself if it will really make your life better or does it just look cool. Coolness wears off very quickly and you never get the money back.
Putting together a wardrobe can be expensive. If you are in a profession that requires you to look the part, it might even be a necessity. This does not mean that you have carte blanche to just buy whatever you want. A wardrobe can be put together in moderation and without depending on designer labels.
Moderation, obviously does not mean head for the low ground. Cheap clothing is just as costly as expensive clothing because it will not last.
When putting together that wardrobe, you should think versatility over anything. Don’t be lured by that one piece that you will wear maybe once a year. Make sure that you create a wardrobe where everything works together and can be mixed and matched. That will allow you to create more looks with less overall pieces of clothing.
In addition, resist the urge to buy the latest designs. If you want to be a trendsetter, you will do so at the expense of your financial future. Instead, shop clearance and end of season. By picking the right times to shop and being patient, one can easily save 60 to 70 percent on clothing.
Sometimes it is not material things that can get you in trouble. Trying to stay up on pop culture so that you can be on the cutting edge can be just as costly if you do not have the money for it.
So what am I taking about? Let’s take movies, for example. If you always have to be the first to see a new release, it is costing you a bit more than $20, on average to do that with the cost of tickets and snacks. See a movie every week and you are talking about 100 dollars a month. Sound insignificant, well that is 1200 dollars in only 12 months and that is money that would do well in your investment account.
Besides movies pop culture expenses also include things like music, concerts, plays, etc, etc. These things are great and we need a little culture in our lives but you can go to the extreme. If you do not have the money to save 20 percent of your salary, you need to take in culture in moderation.
Skip on doing things first and instead wait for prices to come down. Hit the movies at the discount theater or, even better, when they come out as a rental. Hit plays on off nights near the end of their run, when tickets are cheaper. For music, get a free, ad supported, Spotify account. There are a lot of ways to save and still get your culture. You just may not get the vanity of doing it first.
It is nice to be able to splurge or even show off, from time to time. You see a lot of people doing it and there is the urge to “keep up with the Jones’ ” but resist. You have no idea what other people can really afford. They could just as easily be richer than you as they could be over their head in debt.
Part of reaching financial independence is learning to live within your means. So, feel free to splurge now and again but, until you are saving at least 20 percent of your take home, keep it in moderation.