It’s never been easier to waste money – think about how convenient online shopping, speedy shipping, and one-click buying has become. You can get your hands on new clothes, kitchen appliances, or tech toys in a matter of hours.
Sure, an occasional splurge won’t break the bank by any means. But if you get into the habit of “small purchases” on a regular basis, you end up wasting more money than you realized. This can make it harder to save for bigger purchases, like a future home, or staying afloat on the day-to-day expenses.
Wondering whether you’ve been falling into any hidden money traps lately? Keep reading below to discover 10 ways that Canadians waste money – and how you can avoid them.
The fastest way to buy something is to head to the first store or website that carries it and fork over the money, but it may not be the cheapest way. If this is how you usually buy products, you’re likely paying more than you need to.
Instead of buying from the first retailer you find, take a few moments to shop around and compare prices. You never know when Amazon or another store may offer the same product at a lower price.
Making the effort to shop around might take a bit of extra time, but it won’t actually require extra driving around. Most retailers offer online shopping, so you can compare the prices right from your computer or smartphone. This little bit of extra effort can result in some major savings.
Not sure which products are worth comparing prices? Think electronics, life insurance, or cars. Bigger purchases are a good place to start when comparing prices because you’ll see the biggest savings right away.
Another easy way to waste money is to buy brand name products. You might think this doesn’t apply to you if you don’t splurge on designer goods like Ray Ban sunglasses or Chanel handbags. In reality, you probably buy brand name products – like Tylenol, Kleenex, and Band-Aids – all the time without even realizing it.
These brand name products may not seem pricey, but you can almost guarantee that they’re going to be more expensive than their generic counterparts. Over months of buying them, the difference in price adds up.
Next time you’re shopping for groceries, personal care items, and household products, check the labels or ingredients. In many cases, you can find a generic or store brand product that’s identical to the brand name version but cheaper.
Before COVID-19, dining out regularly was the norm. People are still getting their restaurant fix, just through takeout or delivery.
It’s definitely convenient to place an order or go out to eat, especially after a long day at work or trying to balance everything at home. But it also can add up quickly.
In most cases, meals prepared by a restaurant are more expensive than the cost of ingredients to cook at home. This is especially true when you factor in tips, delivery fees, and service charges – which might even end up costing more than your food!
To avoid this, set aside a monthly budget for eating out. This way, you get to splurge without hurting the bank account. It’s also important to support small businesses where you can, so a scheduled takeout meal is a great way to do so – just not at the expense of your own financial situation.
It’s easy to get into the habit of going through the drive-thru or on a morning stroll to pick up a daily coffee. It’s a great way to break up the day and get yourself a caffeine fix.
However, you’ll realize quickly how costly these daily trips can be if you take the time to add up the money you spend on those daily coffee trips.
If you don’t want to overspend on coffee, set aside a monthly budget as you do for dining out! You’ll get to support your favourite local coffee shop without breaking your own bank.
You can also consider getting a coffee machine for your house. It’s a bigger cost upfront but you can become your own master barista in no time – and save big time.
You can’t get rid of your hydro or Internet services completely, but there are definitely ways to trim them down.
You might be overspending on your hydro bill by keeping all your lights on in the evening or running the air conditioning even when you’re not home. Identify what actually needs to be on at any given time of day and turn everything else off. You can also buy a smart thermostat that’s designed to help you track your energy usage and make it more efficient.
Similarly, check your Internet bill against your actual usage the next time it comes in. You might find that you don’t actually need your unlimited Internet plan and can downgrade to a cheaper one without exceeding the monthly usage limit.
If you’re willing to spend some time on hold with customer service, it never hurts to call and ask for a better rate on these services. Especially if you’ve been with a provider for a while, they might be willing to offer you a promotional rate to prevent you from running to their competitor.
Yes, maintaining your home and car regularly costs money, but skipping out on the regular maintenance can be even more costly. You might end up with a leaking roof or a broken car engine. That’ll be much more expensive to repair or replace.
Instead of trying to save money by deferring routine maintenance for your home or car, stay on top of the regular care they need. Seal cracks in window frames, change your oil and call in a plumber to fix a dripping pipe.
Neglecting some of these needs can actually end up costing you more in other ways, not just repairs. For example, if your windows are cracked, you're forced to use more A/C to regulate temperature. See how that can add up?
You may have had the best of intentions when you signed up for that virtual gym membership. Maybe you even thought that committing to the monthly payments would give you the push you needed to exercise regularly. But if you’re not actually using any of those online classes, it’s a huge way to waste money.
The same goes for the Disney+ subscription your kids rarely use and the premium iCloud storage plan that gives you way more digital real estate than you need.
To find out where you might be wasting money on services you don’t use, take a look at your bank statements and credit card bills. If there are monthly services or subscriptions that you don’t actually use, cancel them.
Free trials are great – in theory. If you forget to cancel after the free week, you could end up with a costly bill.
Grab your calendar if you need a credit card for a trial and put a reminder to cancel before the renewal date. For some free trials, you can even cancel right away and the trial will last the week. But if you forget to cancel, you may end up with a steel annual charge.
Don't waste money on this. Regularly check your card bills and cancel any subscriptions you forgot you were paying for. Chances are if you forgot about it, it's definitely not a subscription you need.
Isn't it ironic that the place you keep your money can also end up being a way you waste money?
Bank accounts are necessary for saving money and paying bills, but many of them come with tricky fees. For example, you might be paying monthly account fees, annual credit card fees, and even fees for individual Interac transactions or cash deposits.
To minimize the money your bank takes from you, compare the features of your bank’s accounts and plans. You might find that you can save money by switching to a cheaper plan, downgrading to a no-fee credit card, or maintaining a certain balance in your account to avoid paying the monthly plan fee.
And if you’re not set on sticking with your current bank, you can also consider your options at other financial institutions. You never know who might be able to give you a better deal or offer you an account with just the features you need and nothing more.
Unless you’re sitting on a mountain of cash, life insurance is a purchase that’s worth the investment. After all, having a life insurance policy is the best way to protect your family financially. Because if you die earlier than expected and your income suddenly disappears, your family will have a source of funds to fall back on. This means that they’ll be able to keep paying for mortgage payments, your kids’ school tuition, and weekly groceries.
When shopping around for life insurance, you might think that you should buy as much coverage as you can afford to give your family as much protection as possible. But when it comes to life insurance, more isn’t more. In fact, about 36% of Canadians overpay for coverage because they overestimate their family’s needs, buy the wrong policy, or don’t shop around for the best price.
So instead of padding your insurer’s pockets, be sure to find out exactly how much life insurance coverage is right for you.
Even if you are a pro at financial planning, it’s easy to waste money here and there without even realizing it. The good news is that once you know what to look for, it’s simple to spot these money traps and avoid them.
The money you save by buying generic tissues or turning your heat down a bit in the winter may not seem like much the first time you do it, but note your savings over time.
When you use these money-saving hacks consistently over weeks, months, and years, the benefits add up.