Photo: Pierre LaScott on flickr
Blame the government or blame the economy, but Americans should also blame themselves for their declining net worth.We waste a whole lot of money. Seriously, over half a trillion dollars each year—and that’s just for areas with available data.
So what counts as a waste of money? We included fines, bad investments like lottery tickets, and unhealthy consumption items like cigarettes and alcohol. We’re not telling you how to live your life—but we are identifying costs that everyone should consider cutting.
Click here to see the biggest money wasters >
***Please note: We have corrected an grievous miscalculation of credit card interest payments.
$41 billion in gift cards went unused from 2005 to 2011, worth $6 billion a year, according to TowerGroup. Most of these are considered lost or discarded.
But don't ditch those unused gift cards just yet--you might be able to turn them into cold, hard cash.
Last year, deals site CouponSherpa launched a movement called Gift Card Exchange Day, during which consumers could sell their unwanted or slightly used gift cards for cash.
On the marketplace, people post an ad for their card in the hopes that a gift card reseller will buy it. 'On average you could pocket between 75 and 92 per cent of the value of your original gift,' reports BI's Mandi Woodruff.
Americans pay through the nose at the ATM, according to Bankrate.
What's more, these penalties are higher than ever right now.
The only way to ditch them may be dumping your big bank for a credit union. Not only do some credit unions reimburse you for ATM fees, some will even pay you for using their card.
Drive too fast? Park in the wrong spot? You are spoon feeding money to the government and the insurance companies.
The National Motorists Association estimates that Americans spend 7.5 to 15 billion dollars on traffic tickets, assuming 25 to 50 million traffic tickets, costing an average of $150 with an insurance surcharges for half of them costing around $300. (We averaged the range in this estimate.)
Americans burned $44 billion on tobacco, according to the BLS.
It's become such a problem that low-income New Yorkers are spending a quarter of their annual salary on cigarettes.
And we're not counting the indirect health costs, which are covered in a later slide.
But help may be on the way. Researchers like Dr. Ronald Crystal of Weill Cornell Medical centre are developing vaccines that could provide immunity to nicotine and even cocaine. It's a one-time shot that could help stop addiction.
We calculated this figure based on a Gallup survey showing that the average cardholder had an unpaid balance of $2,210 at the end of the month. Throw in an average APR of 12.75% for 174 million cardholders, and you get total annual interest payments of $49 billion.
You seriously need to stop wasting money on credit card interest and end the debt cycle for good.
***Slide changed to correct a miscalculation of credit card interest rates.
Casinos earned gross revenue of $125 billion in 2010.
We're going to be generous and estimate that 45 per cent of this money was returned to gambler's in winnings. That leaves $69 billion money that people willingly gave away.
Warren Buffett says it was while watching people throw away money at a casino that he first realised how easy it would be to get rich.
That's our calculation based on $443 billion in annual home energy costs, and the claim that consumers could cut energy costs by a third if they followed recommendations from the government-backed Energy Star program.
Energy Star's website has a whole host of suggestions to save you money:
- Changing your air filter every three months at the minimum and using a programmable thermostat could save you over $180 a year.
- Lowering your water heat thermostat from 140 to 120 degrees can save you more than $400 a year.
- Replacing five light bulbs with Energy Star bulbs or fixtures can save you $70 per year, and Americans waste $9 billion on energy inefficient lighting.
- You could save $40 a year by only using cold water to wash your clothes and as many as $36 per year by using the right sized pot on your stoves.
- In the average home '75% of the electricity used to power home electronics and appliances is consumed while the products are turned off.'
When you trash food, you throw out money. The habit costs $165 billion nationally, according to the National Resources defence Council, which means it costs $529 per person.
If you're tempted to toss out old food, then pick up new habits.
Hit up Google to find creative uses for certain foods, offer leftovers to Fido, or plan meals around weekly sales so you don't overbuy.
Another option is to pile up your plate with veggies. They'll help you lose weight, and are often cheaper than the packaged and processed goods at the front of the store.
This is where the indirect costs of smoking, drinking, and eating junk food come in.
Bad health leads to lower productivity, high insurance and health care costs--even if universal health care spreads the cost to other tax payers.
The real problem is that bad health makes people less happy and takes years off one's life.
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