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Seven in 10 Americans feel confident that their finances will improve in 2022, according to Fidelity’s recent Financial New Year’s Resolution Study. That confidence comes as a bit of a shock after the economic roller coaster the country experienced during the pandemic. The National Endowment for Financial Education shows that, for the most part, Americans are feeling better about their finances today than they expected to earlier on in the pandemic. One thing is certain: the pandemic reminded everybody, regardless of financial status, of the realities of a “rainy day.”
Just because things might be looking up doesn’t mean it’s time to ease up on financial responsibility. In fact, the New Year is the perfect time to double down on good habits. So with that in mind, here are things to stop wasting money on in 2022.
High Interest
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There are a lot of things you shouldn’t overpay for, but one of the biggest ones is money itself. Money should not be expensive. But if you got a loan a long time ago or haven’t done your research, you could be paying high interest rates. If you got your student loan with your parent’s as a co-signor but now pay it yourself, remember that your original monthly payment was likely based on your parent’s income. If yours is much less, look into refinancing with a lender that will give you a lower rate or longer repayment plan. If you carry a high credit card balance, look into transferring it to another card offering a lower rate or even zero APR for the first year.
Fast Fashion
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It seems too good to be true when you find an adorable dress or sweater online for $15. Technically, it is too good to be true since a lot of this fast fashion deteriorates after a couple of wears or one run through the washing machine. If you need to replace your clothes frequently, then even the cheapest of items aren’t technically a good deal. Investing in clothing made with quality materials can mean holding onto clothes longer, and saving money in the long run. Remember that thrift shopping for clothes is good for your wallet and the planet.
That Final Cocktail
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You know the one. You were feeling perfect before. You had just one to two drinks at a party. The plan was to stay within the legal limit to drive, have a lot of water and cut the alcohol intake early in the night. But then you reach for just one more. Then you need to pay for a cab home. The drink itself might have been pricey. And the hangover that one final drink causes the next day can obliterate your productivity – which could mean additional loss of money.
Excess Food
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Cooking at home saves you a lot of money compared to dining out or getting delivery. However, there is still a wasteful way to cook at home. If you buy so many groceries that many expire before you can eat them, that’s a waste of money. The truly cost-effective way to eat at home is to grocery shop frequently so you can buy just what you need, finish that, and return to the store when you’re ready. Stocking up on perishables can mean money goes into the trash can.
Hot Spots and High Data
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FOMO around social media updates and responding to emails right away is real – and can get expensive. Many Americans pay for bigger phone plans than they need, for fear of ever being disconnected. You can save a lot of money by downgrading to a plan with less data and without a hot spot. If you simply wait until you can connect to the Wi-Fi at your home, at a business or at a friend’s house, you can save money on high data plans and hot spots. The truth is that you likely don’t need to be connected 24/7.
Credit And Checking Account Fees
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Fees are another way that money itself can get expensive. First, there are ATM fees, which can be hefty depending on where you are. Staying organized and remembering to take out sufficient cash while at your bank can help you avoid those. Then there are overdraft fees, which can be avoided by setting up simple notifications in your account, and late fees, which can be avoided by putting bills on autopay. If you travel abroad, you might pay high foreign transaction fees. However, you could apply for a credit card that doesn’t charge foreign transaction fees. If you read the terms of your existing cards, you could find you already have such a card.
Ride Share Services
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If you have opted out of having a car in order to save money, then commit to that strategy. Ordering a ride share service every time you want to go somewhere adds up, and could eat up all of your savings from not having a vehicle. With a little organization and planning, you can save money on transportation. For short distances, consider giving yourself extra time to get there and simply walking. It’s good for you and the environment. For longer distances, see if you can catch a ride with a friend going in the same direction.
Useless Insurance
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There are many times when insurance is helpful – and many times it’s not. Always read the fine print. For example, currently, most travel insurance plans will not accept claims pertaining to COVID-19 troubles. That’s a huge factor, given that COVID-19 is a leading cause for travel cancellation. Some dental plans state a maximum benefit you can expect to receive each year, and it’s surprisingly low. For example, certain plans will only pay up to $750 in costs for a year. That’s after you already pay the $35 a month. So you will certainly pay over $400 a year in the premium, and ultimately only receive $750 in benefits. That benefit wouldn’t even cover a few cavity fillings. Always weigh the pros and cons and know an insurance plan through and through before purchasing.
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