The top 5 ways we waste money – and how to avoid them

The top 5 ways we waste money – and how to avoid them

Last updated on 12th December, 2018 at 09:11 am

Read the tips below to find out how you can be saving.

1. Impulse buying

According to online marketers Invesp, almost 40% of online purchases made are impulse buys, while the average shopper in a physical store will make around three impulse buys in nearly 50% of the stores they visit. That means that if you walk into 10 stores, you’ll blow unnecessary cash on impulse buys in at least four of those shops. Expensive!

How to avoid it

Shop with intention: that means – whether you’re clothes or grocery shopping – you always step out (or head online) with a list. Having a game plan keeps you focused, plus it means you can plan ahead for how much you should need to spend, making it easier to say no to impulse buys. And always ask yourself this: do I need it? If the answer is no, and it’s not on your list, resist! Now stash that saved cash and watch it add up over time.

2. Data usage

It’s easy to pass the time flicking through Facebook or Instagram, not realising how much data you’re ploughing through. And then – bam! – you’re out of data. Ad hoc top-ups and out-of-contract usage are some of the most expensive ways to consume data. Even worse, these costs are hard to keep track of – and they add up, fast. And once you’re used to chowing data, it’s hard to go back. Professor Adré Schreuder, founder and CEO of the Pretoria-based consultancy, Consulta, says constantly upgrading your contract to accommodate your data needs is another money-wasting habit.

How to avoid it

Whether you’re on contract or pay-as-you-go, set aside a monthly budget for data and airtime and commit to sticking to it. Which means saving social media and other data-heavy habits for Wi-Fi zones. Set up safeguards on your phone: turn off mobile data for updates and apps in your settings. And install an app (when you’re connected to Wi-Fi, of course!) to help you monitor your data consumption – ones like Data Usage, 3G Watchdog Pro and DataMan Pro are all options.

3. Fast food

In South Africa, we spend close to R2-billion a month on fast food… a habit most of us could kick if we need to save money. And don’t think fast food is that cheeky burger you allow yourself on a Friday – it includes daily convenience buys like coffees and deli sandwiches, too. Dr Anina Maree, co-founder and director of GroundControlResearch adds: “By kicking your habit of a daily take-away lunch and cuppa from the coffee shop, you could quickly and quite easily put this extra money into savings.”

How to avoid it

Planning is key: packed lunches and pre-planned meals save you money – and you’re less likely to splurge on a pricey sandwich or bagel if you’ve prepped food on a Sunday for your week ahead. A coffee snob? Try buying things like a coffee plunger and packet of filter coffee you can keep at your desk – if you replace daily cappuccinos with this, you’ll save long-term. Now put that saved cash aside into a savings account, so you can reap the rewards of this lifestyle tweak.

4. Designer brands

There are plenty of examples where paying extra for a brand name doesn’t make sense. Take prescription medication, for example – often their generic equivalents are just as effective, and a fraction of the price.

How to avoid it

Be open-minded to buying the best value item rather than the branded item – whether that’s bread and butter, shampoo or socks, or medication. Think about the items you buy where brand matters, then be willing to go brandless on the non-essentials. And always ask: pharmacists, for example, may automatically give you the brand-name medication unless you request generic meds (after confirming this with your doctor).

5. Swiping credit and store cards

We know: sometimes needs must. But buying on credit is the most expensive way to buy anything. Take a look at your last month’s credit and store card statements; now add up what you spent in card fees and interest. The amount may surprise you – and cutting these interest and fee costs is a sure-fire way to save money monthly you probably didn’t even realise you were spending.

How to avoid it

In principle, try to save up enough cash before you buy something – that way, you avoid having to buy it on credit. Simply have to swipe the plastic? Pay off debt amounts as quickly as possible: make more than the minimum payment amounts and prioritise clearing debt before making any other luxury spends. And set up debit orders to your credit and store card accounts to ensure you’re killing interest costs as soon as your pay cheque arrives in your account.

Ready to secure your financial future? Speak to a qualified financial planner to find the best options to suit you – request a meeting here. And remember: as a Sanlam Reality member, you can get up to 100% off primary asset management fees with Sanlam Investment’s flagship funds. Find out more, here.

Want to learn more?

We send out regular emails packed with useful advice, ideas and tips on everything from saving and investing to budgeting and tax. If you're a Sanlam Reality member and not receiving these emails, update your contact details now.

Update Now