The worst ways we waste money

Updated: 

shoppingPA

Think you're watching the pennies? Think again, because while we busily cut back until the pips squeak, elsewhere in our budget we are letting money slip through our fingers.

Apparently more than a third of people who use direct debits aren't entirely sure how much is leaving their account each month, and this is far from the only major mistake we are making.


There are five ways in which even the most careful spenders could be wasting money.

1. Failing to keep an eye on direct debits.

A survey has revealed that 95% of us use direct debits, that 38% have no idea how much they spend each month this way, and 7% have even found a direct debit they had forgotten about when they checked through their statement.

A direct debit is a great way to cut the cost of some bills and make sure you never forget to pay. However, all the convenience and savings are a false economy if you're going to end up wasting a small fortune. First, check how much each direct debit is costing you. Then review the direct debits to ensure you still want these services.

Magazines, gyms, clubs, websites... They all make a small fortune every months from people who should have cancelled long ago.

2. Shopping out of habit.

We all fall into habits, but when it comes to shopping it pays to be aware of the patterns we are following and address them properly.

Do you go for the same brand of groceries every time without looking to see whether there is anything similar that is better value? Do you always shop in the same places - perhaps on the way to or from work? If there's any shopping you do without thinking there's a good chance it's wasting a small fortune.

3. Buying things we don't fully understand

Now that we buy our gas and electricity as a package and our phone, broadband and TV as a package, there's even more chance that we're not entirely sure of all the details. However, if you are to avoid making an expensive mistake, it pays to understand roughly how each one works, what you get as part of the package, what costs extra, and what is particularly pricey.

Personally I ran up a horrifying phone bill in my first month with a new provider, because I hadn't realised that mobile phone calls weren't included in the package. Any money that I had saved by switching packages was wiped out in one month. It's certainly one mistake I won't be making again.

4. Buying products we don't need

I'm not just talking about impulse purchases that we come to regret, I'm talking about products that we have been sold for all the right reasons, without checking whether they are strictly necessary. Extended warranties, mobile phone insurance, computer classes from a retailer. They all cost a small fortune and the vast majority of us will never have any use for them.

5. Shopping for the wrong reasons

We don't just shop when we need something. At some time or another we shop when we're bored, when we need cheering up, when we want a treat or when we're passing the time. Nothing that is ever bought on these trips will turn out to be the wisest purchase you ever made.

SPONSORED FINANCIAL CONTENT