Despite all our best budgeting efforts, sometimes we're still left scratching our heads and asking the same question: Where did all my hard-earned money go? The truth is most of us are making some serious financial mistakes, and it has us all worried. In fact, a Bank of America study found 69% of Americans cite money as a top stressor. We all know how easy it is to get carried away and spend carelessly. Ever been to the grocery store without a list? Just a few things can quickly turn into an entire shopping cart.
So to help rein in your expenses without killing your social life, we highlighted a few common purchases we all spend too much money on, and how to curb them.
Have you felt the sting at the grocery store checkout when the attendant announces the total? Don't worry—you're not alone. The price of food has definitely gone up, especially if you're eating organic. According to the U.S. Bureau of Labor Statistics, the average American family with an income of $67,000 spent $6759 on groceries in 2014; that's $563 a month, up 2.4% on previous years.
Saving tip: If you want to save money on your weekly shopping bill, Costco has a fresh and affordable organic food section, but your local farmers market is where you'll cut costs on produce. We tested one in our local area and literally loaded our bags with fresh fruit and vegetables, including fresh berries, bread, and organic options, for around $100.
We're all guilty of it, even if we're against it, but sometimes you just need a drink of water and the only option is to purchase it at the local gas station. But do you know how much money we're wasting on bottled water? A report published in Business Insider stated that Americans are spending 300 times the cost of tap water to drink bottled water: $11.8 billion in 2012, to be exact. We are the biggest bottled water drinkers on the planet, drinking 1500 every second. But it's not just our wallets that are taking a hit; it's costing the environment, too. Did you know it takes three liters of water to manufacture a single liter bottle and on average 17 million barrels of oil to make a year's worth of those bottles? Not to mention the incredible amount of waste this produces, most of which ends up in our oceans.
Saving tip: Ready to start saving your money and the environment? Purchase one of the latest pitchers on the market, such as the Soma, which will turn regular tap water into purified drinking H20. You can bottle it (preferably in recyclable glass) and take it with you wherever you go. Let's ditch the bottled stuff.
Pink tax aside, feminine product prices are just as painful as the monthly cramps. According to a Huffington Post report, the total cost of a woman's period over her lifetime is $18,171. From heating pads to tampons, new underwear, and even the chocolate consumed during the menstrual cycle, it all adds up to a big chunk out of our paycheck.
Saving tip: Our hormonal flow and the need for these products aren't going to disappear anytime soon, but there is some good news in all of this. Thinx saves you dollars (and any embarrassing leaks) with its washable line of period panties. You can also save on tampon subscriptions with customized delivery services such as Lola or Cora.
We can fork out a small fortune on medication, from prescriptions to over-the-counter go-tos. As Time reports, "Americans filled 4.3 billion prescriptions and doled out nearly $374 billion on medicine in 2014," which is up 13% from the year before.
Saving tip: To reduce that cost, be on the lookout for generic versions of the name-brand meds that hike their prices to accommodate for higher advertising costs. Compare the ingredient lists and you'll find they're nearly (or clearly) identical aside from the price tag. Costco's own Kirkland Signature brand produces high-quality over-the-counter medication at a fraction of the cost.
Can't start the day without a fresh brew? We hear you. A report published in ABC News proves the average American worker needs that caffeine hit of a morning. We spend nearly $14.40 a week on coffee, this excludes the cost of drinking it at home; that's around $1100 each year on coffee. Crazy, right? Just think of the designer shoes you could buy with that cash.
Saving tip: To cut that expense back, try making your coffee at home instead of picking one up at the local café. You can purchase a six-cup coffee maker for just $30 so you can enjoy one in the morning and take the rest to work for that 3 p.m. hit. You're welcome.
Do you know how much of your paycheck should go toward rent? If you can't think of it off the top of your head, then it's likely you're already paying too much. According to Alexa Von Tobel of Learnvest, you should only spend 30% of your earnings on rent; that’s 30% of your income after taxes. But one in three Americans are spending much more than that. If you're struggling to write out a rent check each month, then it's time to make budgeting your best friend.
Saving tip: Putting money away is tough, we get it, but it is possible to live a lean lifestyle and still have some spare to enjoy yourself. We love the Mint app for this. It connects to your financial institutions and helps you track your spending in real time, with reminders and updates on what's going in and what's coming out. You'll be surprised by how much you're wasting on small transactions. Having this awareness really lets you hone in and make changes.
If you think food is expensive, that's nothing compared to the dollars we coin out for our cell phones. Business Insider reports more than 20% of Americans spend more on our phones than our groceries. Sounds crazy at first, until you hear how much time we spend on them. We rack up almost five hours a day on our phones, and that figure is bound to go up.
Saving tip: If you want to curb your cell phone spending, try paying for it upfront. It seems like a big outlay in the beginning, but you won't be tied down to a costly contract, and you can pay as you go. Some companies offer as little as $45 for an unlimited 30-day plan.
Choosing to start a family is a big decision not just emotionally, but financially, especially when you consider that the average cost of raising a child is $245,000, and that doesn't even cover college. The first year of your baby's life is probably one of the most expensive. Everything you need just to set up before baby's arrival is pricey, such as the car seat, the stroller, baby carriers, a high chair, a diaper bag, a crib, a bassinet, a baby monitor, a breast pump, an infant bath, a change table, and childproofing supplies—need we go on? Not to mention the ongoing cost of diapers and wet wipes. It's incredible.
Saving tip: No one wants to forgo quality when it comes to their baby, and they shouldn't have to. The Honest Company offers convenience on a dime with discounted monthly bundles of diapers and wet wipes delivered to your door. Costco also offers great value with its Kirkland Signature brand, at just $0.15 per diaper.
Do you love Netflix but listen to your music on Spotify and purchase your books on Amazon Prime? Have you ever stopped to think about how much all of these subscriptions are costing you? An HBO subscription can set you back $15 to $20 a month, Spotify is $10 a month, Amazon Prime is $99 a year, and Netflix announced plans to raise the price of its current $10 monthly plan. If you have all three or more, then this is definitely hurting your monthly budget.
Saving tip: Sign up for Amazon Prime; its offers videos, music, books, and free two-day shipping for its one $99 annual charge. If you just want to stream videos, Amazon offers a cheaper $9 monthly option for Prime Video. Amazon also sells open-box and refurbished items with the same return policy as on its normal products—savings plus!
What are some creative ways you save money?
This story was originally published on June 13, 2016. Updated by Sacha Strebe.