Even those with strong money management skills sometimes waste money or pay more for things than they should. Not all wasted money is in the form of eating in restaurants every night or getting a coffee on the way to work, although those are generally the easiest money leaks to recognize and fix. There are other situations where money may be wasted that aren’t quite so obvious. Here are five ways you may be wasting money and how you can reduce the waste:

Jukka Zitting / flickr source

1. Insurance Deductibles

An insurance deductible is the amount of money you have to pay before your insurance coverage starts covering the claim.  Many people carry lower deductibles on their insurance policies so they can pay less if they need to put in a claim.  A better strategy may be to increase your insurance deductibles and keep enough money to pay the higher deductible in an accessible account in case you need to put in a claim.  The higher your insurance deductible, the lower your insurance premium, and since you only pay the deductible when you actually make a claim– it often makes more sense to have a higher deductible and lower premium.  For car insurance premiums, people can save anywhere from 10% to 40% on premiums just by increasing the deductible from $250 to either $500 or $1,000.

Homeowners insurance works the same way: the higher your deductible, the lower your premium.  Raise your homeowner’s insurance deductible from $250 to $1,000 and save about 24% annually; raise it to $2,500 and save about 30% annually.

This may not be a good money saving strategy for someone with little money in savings, or someone who puts in claims and pays their deductible often.


2. Snow Removal Tools

If you live in an area that experience three months with possible snow storms per year, do you really need to invest $1,200 on a top-of-the-line snow blower?  It will sit in your garage or shed the rest of the year. These machines have engines and need to be maintained over time, too. A better idea may be to split the cost of a snow blower with a couple of your neighbors, and allow everyone to use it to clear their driveways and sidewalks, or to simply pay someone for snow removal if it’s needed infrequently.

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  • walter17

    i have no money so i guess i don’t have to worry about those things!

  • ABC

    8% on money in a mutual fund – Got any specific examples?

    • Boog

      Isn’t that about the annual average over the last 40 years?

  • Meredith Heflin

    No money here, either. Thought I’d pick up a tip about saving. I’m already doing the things they mentioned.

  • Nescio

    They best way to save is to learn to cook for yourself and stay away from convenient stores

  • donbronkema1

    If you are frugal–& at age 22 start DCA-ing into a broad, no-load, stock-index Roth, you can probably retire before 50 [& still make heavy donations to activists & eleemosynaries]…all you need do is:

    –pay all taxes in curso
    –minimize rent & fancy duds; cook from scratch
    –abjure car, coffee, deli, tobacco, booze, drugs, wagering, vacations, prandial liaisons
    –never marry or cohabit [& never invest w/friends], or risk the comforts of a crate under a bridge

    Odds reader will listen? N to the square-root of minus 1…

  • donbronkema1

    Kiplinger’s estimated that just avoiding overdraft, late payment, retail credit & larcenous broker fees [not to speak of astro-interest on payday sucker-loans] could generate highly remunerative Roths over ‘vigesimals’ [20-year periods]…since banker/broker greed is peculiarly intractable–& threatens permanent collapse of the global economy–it’s long past time to nationalize the industry…even a super Glass-Stiegel would not suffice to stop another–& maybe fatal–plunge into the abyss.