Worst Ways People Waste Money Every Day

When you think of the most common things people waste money on, it may be cars or new phones, but those are just the tip of the iceberg. The worst things to spend money on aren’t just big purchases. Invisible, recurring spending that flies under the radar can be even more dangerous.

To help you learn from the mistakes of others as you progress towards financial freedom, here’s a quick-fire list of the 30 worst ways people waste money and some suggestions on how to redirect your cash productively:

1. 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.

2. 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.

3. 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. Not to mention our Consumer laws guarantee warranty for goods based on a reasonable, expected lifespan.

4. 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’.

5. 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.

6. Expired Food

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! Luckily, there are a few ways to save money at the supermarket and we’ve even put together a guide on how to avoid supermarket rip offs.

7. Pay TV

The quality of entertainment on traditional pay TV hasn’t kept up with online (streaming) alternatives which offer better content and more flexibility at less cost.

8. 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.

9. 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?

If you’d value an honest, professional perspective on your finances, an initial complimentary consultation is available.

10. 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.

11. 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, a fee for visiting a branch, and more!

While banking fees may seem small in isolation, they often sit alongside a bigger issue: money left idle or confined to default settings. Many people unknowingly over-allocate to KiwiSaver without considering whether additional investing outside the scheme might offer greater flexibility, or struggle to determine how much they should be investing at all. When you’re in a position to begin making proactive financial steps, it could be time to learn how to start investing in shares.

12. 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.

13. Coffee

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. Believe it or not, you could cut the lattes to get rich.

14. 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. With more people also using their KiwiSaver to enter the property ladder, it’s worth evaluating what your best move would be with purchasing a house.

15. Eating Out

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?

16. 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.

To get the full picture, read up on why credit card interest rates are so high. Understanding how to improve your credit rating and how credit card balance transfers work is also helpful.

17. Cigarettes and Alcohol

Beyond the health implications, the financial drain is astronomical.

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

18. 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.

Are you in the top tax bracket, or do you have over $100,000 invested in KiwiSaver? If so, you could be closer to financial freedom than you think. Get in touch to book your complimentary initial financial strategy session.

19. 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.

20. 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.

21. 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.

22. Gym Memberships

It’s easy to sign up with good intentions, but if you haven’t stepped foot in the gym for three months, you’re just donating money to a corporation. If you prefer walking or home workouts, cancel the membership and keep the cash.  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.

23. Payday Loans

Are so bad the government is cracking down on them.

24. 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.

25. 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.

26. Premium Fuel

Unless you are driving a high-performance sports car that specifically requires 98 octane, putting premium petrol in a standard commuter car is literally burning money. Most modern engines run perfectly on 91 or 95 without any loss in longevity.

27. App Subscriptions

We often sign up for a "free trial" and forget to cancel. Check your "Subscriptions" settings on your phone; you might find you’re paying $10/month for a meditation app or a photo editor you haven't opened in a year.

28. Fast Fashion

Buying cheap, "disposable" clothes that fall apart after three washes is a false economy. It’s better to spend slightly more on quality items that last years than to constantly replace $10 t-shirts that shrink or tear.

29. Brand Name Groceries

Many "house brands" or generic labels are manufactured in the exact same factories as the big-name brands. Paying an extra 30-50% for a fancy logo on your flour, sugar, or tinned tomatoes is a silent budget killer.

30. Too Many Takeaways

Sure, we all love some fish and chips!

Delivery apps add service fees, delivery fees, and commonly mark up the menu prices themselves. If you’re going to eat out, picking it up yourself or eating at the restaurant can save you $10-$15 per meal.

Frequently Asked Questions

“How do I stop wasting money every month?”

First things first, figure out where the money is going. Order your expenses from biggest to least and group them into wants and needs. Chances are that more money is going into nice-to-haves than you initially thought.

“What are the biggest money traps in NZ?”

The biggest money traps aren’t always the obvious purchases that may spring to mind first. High-interest consumer debt, frequent car maintenance and upgrades, these are just some of the habits that stack up. Lifestyle creep is another common trap that can slow wealth building. Even though you’re earning more, your spending may also be inflating with it – leaving little wriggle room for saving.

“How can I save more without living frugally?”

Avoiding the worst things to spend money on doesn’t mean you have to hard pivot to a frugal life. A structured approach that creates a priority of spending will leave room for enjoying life. One approach is splitting your payslip automatically, forcing yourself to follow a budget while leaving room for a few well-earned luxuries.

The Bottom Line: The Worst Ways to Waste Money

So, after reviewing the list above, do you need to make any changes? Don’t stress if you do, most Kiwis waste money on things they don’t need. Once you’ve got a handle of your finances, you may be closer to financial freedom than you think. Book a complimentary consultation to get started and hold yourself accountable to not wasting your money in 2026.