15 Things Not to Buy if You're Saving Money

For many, if not most, of us, it's hard enough to be able to sock away significant sums for retirement given our regular, day-to-day expenses. It can become much harder, though, or nearly impossible, if we buy certain things. Here's a look at 15 things you may want to avoid buying -- in order to maximize your financial health.

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Yes, cars are super useful and, for many people, nonnegotiable. But do you have more cars than you need? If your household has two people in it and three cars, you could save a lot of money by selling one and not having to pay for insurance on it, not to mention repairs, maintenance, and perhaps even car loan payments. Even with two cars in a two-person household, might you get by with just one? Doing so can be a more ambitious money-saving move, but it might be worth it, if you can find ways to share one vehicle. If one of you works from home, that can help a lot.

Many of us are paying for a bunch of streaming services while really only watching content on two or three. Others are still paying for cable TV while not watching it very much anymore, favoring streaming content instead. If these scenarios sound familiar to you, you might be spending $25 to $100 or more each month unnecessarily. That amounts to $300 to $1,200 in wasteful spending. Aim to pay for the entertainment that you're really using, and skip the rest.

Next, avoid buying more house than you need. If you buy a $500,000 home, borrowing $400,000 to do so, and you're paying, say, 4.2% interest, that may leave you with monthly mortgage payments of $1,950. Buy a $400,000 home, though, borrowing $320,000, and your payments fall to around $1,550, saving you a whopping $400 per month, or close to $5,000 per year. A common rule of thumb suggests spending no more than 30% of your pre-tax income on housing, but many people would do well to try to keep it to 20% or 25%. That's not easy in some locations, but at least be mindful of what you're spending and what you may be giving up by buying the house you're buying.

ALSO READ: How Much House Can I Afford?

It's common to join a gym with the best intentions. You want to exercise there regularly and get in better shape. That's laudable. But it's also common to find that life just keeps getting in the way, and you're paying $50 or $75 per month with little to show for it. (That's $600 to $900 per year!) Consider canceling your membership and working out in less costly ways, such as by running, or buying a treadmill or exercise bike, or using weights at home.

A basic rule of insurance is that the higher the deducible on your policy, the lower the premium you'll pay for coverage. So consider hiking your deductible on your home and car policies -- and possibly even your health insurance coverage. Just be sure that you can afford to pay the full deductible if you have to. According to the Insurance Information Institute, "increasing your [car insurance] deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more."

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Lottery tickets are also extremely likely to be regrettable purchases. The odds of winning a huge Powerball jackpot, after all, are 1 in 292 million. That's far worse odds than your dying by being struck by lightning, the odds of which are around 1 in 10.5 million. Go ahead and buy one or two tickets now and then just for fun, but if you're buying, say, 10 $2 tickets per week, you're spending more than $1,000 annually on tickets that are not likely to make you rich.

ALSO READ: 7 Hard-to-Believe Facts About Lotteries and Jackpots

Do you eat out at restaurants (or order meals from them) twice a week, spending, say, $120 to do so? If so, that amounts to $6,240 per year. If you're dining out more than that and spending, say, $200 per week, you may not realize it, but you're spending more than $10,000 annually at restaurants. That's wonderful for our economy, but unless you've got a lot of disposable income and you've been saving successfully for your future, there's a big opportunity there: You don't have to quit restaurants cold turkey, but consider cutting your patronizing of them in half. You could save more than $3,000 or $5,000 annually, using our examples above.

If you don't change the frequency with which you dine out (or order food delivered), but you do change what you pay for drinks, you can keep a lot of money in your pocket. In many different settings, drinks can be rather costly. If you buy a $2 bottle of water at work every day, that can cost around $500 per year. If you buy a $4 coffee each morning on your way to work, that can total $1,000 annually. Order wine, beer, or a cocktail at a restaurant, and you might pay more than twice as much as it would cost you to have those drinks at home. Consider skipping the alcohol -- or buying half as much of it.

We can easily spend more on gifts than we realize, and perhaps more than we can really afford, if we're trying to save and invest money for retirement. It's not uncommon to be regularly buying 20 gifts, for parents, siblings, kids, in-laws, and friends. If you spend, say, $30 for each of them on their birthday and during the holiday season, that would amount to $1,200 per year. Many of us might average $50 in our gifts -- if so, that total would be $2,000. Rethink your gift giving. You don't have to short-shrift your loved ones, either -- you might make many gifts instead, such as candles or jams or jewelry, or consider offering homemade coupons for services you can provide such as babysitting or haircutting or a car wash. Perhaps you can put together a booklet of favorite recipes and have a bunch of copies printed as gifts. A little thinking can turn up good ideas.

ALSO READ: 6 Tips to Spend Less on Holiday Gifts

Here's another dangerous and unwise kind of purchase: the impulse buy. These days, many people enjoy "shopping therapy" -- heading to malls and stores, and online stores, too -- in order to feel better, or just out of boredom. Don't do that. You'll end up spending money on things you probably don't need, and that money could be spent in much better ways, such as helping you reach your financial goals.

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If you smoke (or vape), you've probably heard many times about how you should quit. Yes, tobacco is not good for you and could even shorten your life. There's a financial angle, too -- you're probably spending a lot of money on tobacco products, and that money could be spent in far more productive ways. Consider that a typical pack of cigarettes can cost around $7, and in some places more than $10. If you smoke a pack a day, that can cost you $2,555 (at $7 per pack) or $3,650 (at $10 per pack) annually. Ten years of spending, say, $3,000 on cigarettes per year means $30,000 forfeited. It's certainly not easy to quit tobacco, but it's well worth it, in multiple ways.

Those of us who love to get the latest technology might get a big kick out of it, but our net worth can suffer. Buying a new smartphone every two years instead of, say, every four or five years can mean that you're spending thousands of dollars unnecessarily over many years. If you're drooling over the latest, biggest, highest-definition television set, consider waiting a few years to buy it, as it will cost you far less.

ALSO READ: 3 Hypergrowth Tech Stocks to Buy in 2022 and Beyond

This has happened to many of us: You find yourself enjoying a certain app on your smartphone, perhaps a game. It offers you something for, say, $2 -- maybe an upgraded weapon, or some more shots at a target, or a chance to win a prize. Two dollars isn't much, right? You spend it. And the next day you spend it again. It's easy to not realize that over 365 days, you'll be forking over more than $700 to that app. Think twice before making in-app purchases.

Another kind of expense you might want to try to avoid is paying someone to do something you could do yourself. If you need a tooth extracted, of course see a dentist about that. But if you need a bush removed from your yard, maybe you could do that yourself. Health permitting, you might be able to shovel your own driveway and mow your own lawn, too, potentially saving hundreds or thousands of dollars per year. (Such tasks might be good chores for the teenagers in your household, too.) You might even get proactive about this and learn some skills, in order to save a lot of money over time -- such as haircutting, basic plumbing, and sewing.

ALSO READ: 22 Ways to Boost Your Savings in 2022

Finally, think twice before spending money on extended warranties. Studies have shown that many of us overestimate how likely it is that we'll need a given warranty, and we tend to overpay for them, too. Some might be worth it, but try to do a little research before buying something that can come with a warranty. See how reliable that maker and model is, or think about whether you'd be able to pay for repairs if needed, without the warranty. Check your credit cards, too -- as many of them offer automatic extended warranties on many purchases.

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Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

The more you can avoid making certain kinds of not-so-necessary purchases, the more you can save and invest -- helping you reach your financial goals sooner. It can be helpful to do a little budgeting -- seeing exactly where your money is going. That can help you spot some expenses you might want to stop spending money on.

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