The Best Way to Save Money: Stop Wasting It

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No one likes to spend more money than they absolutely have to — yet, when it comes to saving money, that’s not something we particularly enjoy, either. After all, most of us associate “belt tightening” with going without, whether it’s our favorite indulgences or even the basics.

But tightening your belt is hardly the best way to save money. Before you start cutting from your budget things you truly enjoy, look for ways you’ve been wasting your money that can be easily plugged. Trimming the gristle can allow you keep the fat in your budget.

Paying Bills Late

Late fees are the ultimate “duh” when it comes to saving money. You have to pay your bills. You pay more when you don’t pay them on time. And the late fees themselves are just the beginning. Late payments will hurt your credit score fast, and will hurt it hard. With a lower credit score, any future loans, credit lines and even insurance policies you may need to renew will come with higher premiums or interest rates… and will ultimately cost you thousands of dollars (maybe even dozens of thousands) more over the long term.

Carrying Debt

Owing money to your parents or friends isn’t a waste of money, though it might strain a relationship. Your credit card debt is another matter. Assuming you carry a credit card balance of $2,000 on a 15% APR credit card, you’re flushing $300 a year down the toilet. Again, this isn’t a massive amount of money, but wouldn’t you rather spend it on something other than the privilege of owing money to the credit card company?

Buying Brand Name Goods

Whether it’s the flour you use for your homemade pancakes or prescription drugs, buying brand names just doesn’t make sense in a lot of cases. Of course, if you have a special place in your heart for Chips Ahoy!, nothing else will do. When it comes to many items, however, there won’t be much, if any, noticeable difference between buying brand name and buying generic. Make the switch to an entirely generic shopping list for a month. After a month, decide what you really miss. The answer will probably surprise you.

Banking Fees

Banking fees mean one thing: you’re paying your bank too much. If your bank is nickel-and-diming you with account maintenance, ATM or overdraft fees, consider switching to a different service or a different bank. Many consider community banks and credit unions to be far better options for banking for this reason. Finally, add up how much you pay in ATM fees in a year. Again, the figure won’t be titanic, but it will be more than you want to spend just to get your money from another bank’s ATM.


For the cost of a week’s worth of coffee at your favorite coffee shop, you can buy a whole can of coffee and make your own for a month. Coffee is really just one example of a general tendency to pay too much for things that should otherwise be cheap. Another is buying lunch at work rather than bringing your own. Take a look at things you spend money on frequently that you justify by saying they’re cheap. Add up how much you spend on them in one month. Ask yourself if the money wouldn’t better be spent somewhere else.


Nearly every adult needs some kind of insurance. But do you really need all the insurance you have? Could you save money by having less coverage? A higher deductible? You could also save money through bundling your insurance policies (that is, buying several forms of insurance from the same underwriter). Carefully examine your insurance policies with these questions in mind.

Extended Warranties

Consumer Reports tells people very clearly: Don’t buy extended warranties. For those who purchase them anyway: how many times have you been glad you did? If you absolutely must get an extended warranty, roll it into the purchase price and haggle. Consumer Reports  urges people to never pay more than 20% of the purchase price for an extended warranty.

Wasting Food

How many times have you stood by the fridge throwing out perfectly good food? Next time you clean out the fridge and throw away piles of food, add up the cost. That’s money you just threw in the garbage that could have been spent on a nice meal out with your family instead. Think about that the next time you go grocery shopping. And, make sure you’ve had something to eat in the first place: buying groceries on an empty stomach is the number-one reason why people overspend on groceries to begin with.

Living Well on Less

Before you start cutting out things you really enjoy out of your budget, start looking for ways to spend money more wisely. Compare the total money you waste in a month to your bills. Does any of your wasteful spending approximate a bill? You’ll find that with a little money smarts, “belt tightening” might not be necessary at all.

Nicholas Pell
Nicholas Pell is a freelance personal finance writer based out of Hollywood, California. In addition to Credit Sesame, he also writes for Mint Life, Wise Bread and Business Insider, specializing in showing people how to live large on a modest budget and get out of debt. He has also reported extensively on the mortgage crisis, student debt bubble and health care in the United States. Pell lives a stone’s throw from the final resting place of Cecil B. DeMille.

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