Sometimes our culture can seem like it’s surrounded by the idea of people actively spending money. It’s understandable that money helps keep the economy going and pretty much everything has a price. On the contrary, it’s common for overspending to be glorified and under spending or practicing frugality to be looked down upon and considered being cheap or penny pinching.
With a positive connotation attached to overspending and a negative connotation attached to being frugal and cutting your costs, it can be difficult to realize what products or services you could be spending too much money on. Overpaying for items doesn’t make them any more useful and it sets you further away from improving your finances.
Here are 6 things you could be overpaying for.
One of the first things I tell someone who is trying to save money and prioritize his or her spending is to get rid of cable. It’s not a bare bones necessity but it is nice to have. On the contrary, a lot of people choose to keep cable by fitting it into their budget and enjoy utilizing it.
If you do have cable, make sure you’re not overpaying for your subscription. The average cable package costs around $65/month or $780/year, but that probably doesn’t include taxes and fees. It’s common for some families to have anywhere from 130 channels to 300+ channels included in their subscription.
According to an Advertising and Audiences Report, Americans only view an average of 17 channels despite the massive variety they have to choose from. The best way to avoid overpaying for cable is to choose the best subscription package for you and not the best package the cable company offers. If you work full-time and don’t spend much time at home, you should consider whether you will truly get to enjoy those extra movie channels or sports subscriptions.
You can also ask for a discount to help keep your bill low. Cable companies have various types of promotions and discounts and sometimes in order to qualify all you need to do is ask.
2. Your Car
Whether you financed a car or paid for it in cash, it’s important to realize that vehicles are a depreciating asset so it’s crucial to keep automotive costs low and manageable. The moment you purchase a car and drive it off the lot it begins to lose value. This is why I don’t understand why people buy brand new cars. It’s not like your car will be new and shiny forever and you will never be able to sell it for more than you paid for it in most cases.
It’s also interesting how some make and models that were made a year or two apart have very minimal differences. There may be a slight engine improvement here and there, but a lot of elements are similar so buying an older version of a car with low mileage and in good condition could potentially save you a decent amount of money.
With vehicles, it’s okay to buy used and get a good deal. All cars, new or old will need repairs and maintenance eventually. When you shop smart and choose a used car that has been taken care of and maintained well by a previous owner, you could end up saving thousands of dollars.
3. Name Brand Household Items
People love purchasing items from well-known brands. Popular brands do a great job of establishing trust, a quality product and customer loyalty with their emotional family-orientated commercials that pull on consumers’ heart strings. But on the other hand, I know that brands use their name and well-earned reputation to mark up prices on their products.
It’s a great marketing and sales tactic, but it’s not good for the consumer who has to pay an extra 50 cents or a dollar here and there every year to keep using their favorite products. The inflated price can really add up.
This is why as a consumer who is trying to get the best value and price for a product, you should look past those gimmicky commercials and realize that owning Tide Detergent doesn’t make you a better parent or make your clothes any cleaner than a generic detergent. With some products like soap, cleaning supplies etc., you can almost always purchase generic and get the same results and satisfaction you were looking for.
Don’t get me wrong, some name brand items are really good and worth purchasing, like extra durable Hefty garbage bags over the thin generic ones, but if you can cut corners with some household goods when you can and opt for the generic version, you can avoid overpaying for some of those everyday items.
Just like cars, electronics depreciate in value. But brands do an amazing job generating hype around the newest versions of products they create and convincing everyone that they must have them.
I’m genuinely curious to see how many versions of the iPhone apple will come up with. Were already at the iPhone 6, but if people keep rushing out to buy these products like their lives depend on it, I don’t see why Apple would stop creating newer and improved versions of their electronics. Cutting edge electronics can often seem like a fad as everyone tries to compete to be the most exclusive by purchasing the newest gadget early.
Then when the next item is released a year later, prices drop on the older ones. A great strategy would be to wait until what was once ‘new’ becomes ‘old’ in the eyes of exclusivity seeking consumers. When the demand for a product is low, the price drops. When demand is high, the price rises and that often results in consumers overpaying for goods that should never be priced that high in the first place.
Furnishing your home can be super expensive. These days it seems like couches cost a fortune and even something as simple as a single kitchen chair can easily cost $100. To add insult to injury, most furniture stores offer financing options which allows them to charge you more money in interest as you struggle to pay off your expensive new furniture.
First off, don’t finance your furniture. And second, don’t over pay for it either. Some used furniture can be just as nice as what is in the store and for only half the price. You can also save up your money and utilize holiday sale promotions and clearance items.
If you know someone who is getting rid of some furniture you might have you use for, you could always ask them for it or offer to pay them for it. I doubt your friend or neighbor would charge you $500 for their kitchen table but I’m sure a furniture store would.
If you have kids, toys are something you could be overpaying for. I realized this when I noticed my son having a blast playing with a box for several hours. We’re moving, so we got free boxes from the grocery store and they are currently just lying around the house so he clearly saw a fun opportunity.
Buying brand new toys at Toys R Us only to have your child lose interest in the toy months or weeks later is a bit of a waste. At the end of the day, kids just want to have fun and create. There’s no need to overpay for toys to help them achieve this.
Purchasing toys on clearance or used toys at garage sales will do the trick. Also ordering toys for a discounted price online on sites like Amazon and Ebay can save you money and help keep you from overpaying for them.
Are you overpaying for any of these things? How do you avoid overpaying for your favorite products or services?