The worst ways to waste money

The worst ways to waste money

Joseph Darby

To help you learn from the mistakes of others, here’s a quick-fire list of the 25 worst ways people waste money:

New cars.

The average depreciation rate for new cars in New Zealand is 40 percent in year one, then 20 percent for the next three years. Enough said.

Overpriced phones.

When the newest model smartphone offers negligible benefits compared to the previous one, maybe the latest one isn’t worth the price. The good news is that most people seem to be wising-up in this area and are keeping ‘older’ phones for longer.

Extended warranties.

Most of the time, things that people buy are designed to last longer than the extended warranty period. Even then, the extended warranty is often forgotten about and left in a bottom drawer somewhere.

Low insurance excess.

Similar principle to above. Some people pay insane prices every month for the privilege of possibly paying less if something bad were to happen. Even if something bad occurs, they’ve probably already spent more than their excess in the difference to their regular payments, the ‘premium’.

Unnecessary insurance policies.

A tiny percentage of people genuinely need insurances as far-ranging as a funeral plan and credit card repayment insurance, but for everyone else these sorts of insurance policies are a waste of money.

Expired food.

The most recent data we could find shows that the average New Zealander annually wastes 260kg of food – by the end of each year that’s a heck of a lot of Christmas dinner!

Pay TV.

Pay TV hasn’t kept up with online alternatives which offer better content and more flexibility at less cost.

Recurring monthly expenses.

Monthly recurring costs soon build up. For example, do people really need Netflix, and Apple TV+, and Lightbox, and Neon TV, and Disney+, and Amazon Video? Perhaps one or two would be enough.

Buying instead of renting.

Items such as books, tools, video games, formal wear, and even camping equipment can usually be rented far more economically than purchasing outright. Think about it – how often do people really use most of those items?

Impulse snacks and meals.

Informal studies overseas show that snacks and meals from convenient places such as, petrol stations and airports can be marked-up by 117-200 percent. Buying on a whim is never a great idea, and many people load up on overpriced and unhealthy items at these convenient places.

Banking fees.

The big banks are New Zealand’s most profitable businesses for good reason – and it’s not just mortgage lending they’re profiting from. There’s a mind-boggling array of different bank-related costs which includes: credit card fees, base monthly account fees, overdraft fees, other bank EFTPOS/ATM fees, foreign exchange fees, penalty fees, visiting a branch fees, and more!

In-game purchases.

Freemium” is a strategy when a product or service – usually an app for mobile devices (‘application’) is provided free of charge, but a premium is charged for additional functionality or services etc. Especially with free games, many are now designed so that you can speed up the game by spending “a few” dollars. For some, this “few” dollars adds up very quickly.


Those five-dollar lattes can also quickly add up! Alternatives include buying a coffee machine and accompanying array of fancy syrups and toppings – all for a fraction of the price.

Buying too much house.

With mortgage rates at historic lows combining with the Kiwi dream of homeownership, it can be tempting to buy too much house. Dangers of this include a lack of flexibility, struggling to repay the mortgage if interest rates change, putting all your eggs in one basket, higher bills such as rates and insurance, and stress if a breadwinner becomes ill for a sustained period.

Eating out.

For instance, a working-age couple who each spend $14 on weekday lunch might not realise that totals $7,000 per year! Instead, why not pack lunches for a fraction of the price then spend what’s left of the $7,000 on something that has real meaning?

Credit card interest.

Wisely using a credit card is a smart idea for disciplined people. However, banks make big profits on credit cards because most people use them to buy things they can’t afford.

Learn more:

Cigarettes and alcohol.

These items are heavily taxed, which wastes even more hard-earned money. Regrettably, many people keep coming back for more and more.

Bank savings accounts.

Yes, you read that correctly – having funds sitting in a bank savings account without good reason is a waste of money. Learn more about why most people shouldn’t save money.

Lotto tickets and gambling.

Kiwi’s are spending more than ever on gambling (and that doesn’t include the online gambling that the government can’t include in official statistics). This is despite the maths being quite clear – the house always wins.

Car breakdown insurance.

This is an add-on sold by car dealers which is supposed to get a car back on the road in the event of mechanical breakdown, but fine print means that usually this sort of policy is so worthless, it made number two on our list of top seven financial rip-offs.

Keeping up with the Joneses.

The rise of social media means it’s a lot easier to be drawn into the ‘highlight reels’ of friends, colleagues, and family. This can create a perceived pressure to spend more to increase social standing, or in other words, to keep up with the Joneses.

Gym memberships.

Running, push-ups, and sit-ups are all free – and those three exercises are the foundation of any exercise regime. Statistically speaking, most people don’t even use their gym memberships.

Payday loans.

Are so bad the government is cracking down on them.

Rental car extras.

Do people really need a GPS? Booster seat? Extra insurance? Larger vehicle? Offset carbon emissions? Roadside assistance? Snow accessories? Sure, all these things may have a time and place – but not every time.

Discount sales.

If it’s not something a person was already intending to purchase, then they did not save 25%. They just spent the 75% unnecessarily.

The bottom line

So, after reviewing the list above – do you need to make any changes?

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