Yahoo Finance Financial Experts: 10 Things You Should Not Waste Money On in 2024
‘Tis the season to be jolly, and it can be very easy to get carried away with overspending on presents, entertainment and travels. But, it’s also the season for resolutions.
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Deciding to cut back on certain things in the new year, or taking a closer look at what is truly essential, is one healthy way to get finances in order and start the year on a better financial footing.
Here are some things people should not waste their money on in 2024, according to financial experts.
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Credit Card Interest
While this is perhaps not the most obvious item to think about, credit card fees can take an enormous toll on finances and budgets.
As Kyle Enright, president of Achieve Lending, explained, when you are carrying credit card debt, you end up paying more — often a lot more — than the original price of what you bought with the card.
“So even if you got a great deal on something, chances are good you’ll lose those savings if you don’t pay off the balance in full when the bill comes,” said Enright.
For instance, consider that if you carry a credit card balance of $1,500, with a 20% rate, a minimum payment of 4% would be $60 per month.
“That means it would take you 32 months to pay off — and cost $419 in interest, which is $419 more than what the items you bought cost,” noted Enright.
He added that it’s also important to remember that the amount of debt you carry can impact credit scores, and lower credit scores mean higher interest rates for future loans. Remember, “amount owed” is responsible for 30% of FICO scores.
“Bottom line: Figure out how to get rid of your credit card debt once and for all,” he said. “When you do, you’ll gain the chance to do something good and more productive with all that money you are paying the creditor in interest. You’ll have less stress, too.”
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Late Fees
Along the same line, late fees can add up fairly fast and end up costing you a lot.
In turn, Enright said to be sure you have online access set up for your credit card accounts and other bills, and arrange to have upcoming due-date reminders sent to you by email or text.
“With credit cards, some people schedule a payment equal to the minimum amount by the due date,” he said. “That way, your payment will always be on time. You plan to revisit the account and set up a higher payment to pay more than the minimum, avoiding interest charges.”
Excess Viewing Options
It can also be very easy to get swept away by the never-ending new streaming options.
Enright recommended figuring out one or two streaming services you’ll actually use and canceling the rest.
“Your local library will also have plenty of streaming options,” he said. “In many locations, a high-definition antenna allows you to watch over-the-air channels.”
Food That You Won’t Eat
Feeding America estimates that 38% of all food in America is wasted, so to avoid waste in your home, one step to start with is to organize the kitchen and pantry.
“If you can’t easily see what you have, you’re likely to buy items you already have,” said Enright. Next is starting to develop a habit of being realistic, and conscious, when shopping — for instance, it’s tempting to buy 10 cans of beans or five boxes of cookies you like when they are on sale.
“But realistically, will you eat them in a reasonable time? And in the case of the cookies, should you?” Enright said.
Bulk buying is worthwhile when you can and will use the items, but the key is to stick with frequent-purchase items.
Duplicate Purchases
As with the example of the kitchen and pantry, if your cabinets, closets and drawers are full or unorganized, and you can’t tell exactly what you have, chances are high you’ll buy items you already have.
“So before you buy the next 12-pack of paper towels, new shirt or the full list of school supplies, make it a point to declutter, clean out and use what you already have,” he said.
Non-Essential Spending
According to Enright, every household should have a simple monthly spending plan — in other words, a budget — focused on their short- and long-term goals.
“If you know you are spending and saving toward those things that mean the most to you — whether it’s a vacation, retirement, new TV or anything else — you’ll find out quickly which purchases you really need to make and which you can do without,” he said.
High-Fee Investments
According to Kelly Palmer, founder and chief wealth officer of The Wealthy Parent, investments with high fees are another thing to reconsider.
“Now is the perfect time to take a look over the funds in your 401(k) and review the expense ratios, which tell you the fees and expenses you are paying to invest,” she said. “High fees will generally lower your returns over time and especially when it comes to investing for retirement you want to make sure you are maximizing your savings potential.”
More on Needs, Less on Wants
When it comes to wasting money in 2024, people should avoid spending any more than 10% of their income on things that are “wants,” said Sebastian Jania, owner of Ontario Property Buyers.
By being disciplined and placing a larger emphasis on needs, allocating a small amount to wants, and saving the excess, you’ll be more on track to financial success in 2024, he added.
Gambling
Another thing that people should not waste their money on in 2024 is gambling — whether at the casino or on lottery tickets, Jania said.
“Even though these are relatively small amounts of money that most people gamble, over time, when comparing it to the potential upside of investing in skills or traditional investments and compounding that over time, one is missing out on a lot of guaranteed money,” he said.
Extended Warranties
Don’t waste your cash on extended warranties for gadgets and appliances, said Jeff Rose, CFP and founder of GoodFinancialCents.com. In most cases, the standard warranty and consumer protection laws have you covered.
“These extended warranties can add up to 20% to the cost of your purchase,” Rose said. “Skip ’em and save.”
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