Published in: Banks | Dec. 23, 2019
Study Reveals How Americans Waste $423 Billion Each Year
By: Maurie Backman
Americans throw out money regularly -- and it's hurting them financially.
Most of us waste money from time to time. You let a carton of milk expire in your fridge, or you forget to pay a random bill on time and get hit with a $10 late fee. Occasional waste isn't something to beat yourself up over, but when you reach the point that you're wasting money constantly, it's a different story.
Recent research by The Ascent, however, reveals that Americans on the whole are more wasteful than we might think. That's because U.S. consumers admit to throwing away $139 per month. Based on current population data, that amounts to a whopping $423 billion a year going to waste, and for no good reason.
Given the number of American adults who are behind on emergency savings, saddled with outstanding student loans, and overloaded with credit card debt, that's a lot of money to be tossing out. If you're guilty of excessive money-wasting, it's time to rethink some habits -- and make some key changes that can help your finances improve.
What are we wasting money on?
The Ascent discovered that the most common wasteful habits among Americans include the following:
- Throwing out leftovers or expired food
- Purchasing fast food
- Buying overpriced beverages
- Giving in to impulse buys
- Eating in restaurants
- Paying unnecessary interest (such as on a credit card)
- Not returning unneeded items after buying them
- Buying name-brand goods over generics
- Not comparing prices when shopping
- Overpaying for digital services
Many of these, however, are easily avoided. For one thing, do some meal-planning so that you're less likely to throw out leftovers, resort to fast food (which, let's face it, isn't good for you anyway), or pay a premium for meals at sit-down restaurants. Get in the habit of creating weekly menus, keep good inventory of what food items you have available in your pantry and fridge, and pay attention to expiration dates to avoid throwing money away.
Furthermore, although it is not realistic to decide to never indulge in a fancy coffee or happy hour drink, you can attempt to cut back. Brew your own coffee for pennies four workdays a week, and treat yourself to a store-bought latte on Fridays, when you're exhausted and deserve a treat. And if happy hour is a daily thing in your social circle, opt out of it a few nights a week, or suggest a lower-cost alternative, like buying a single bottle of wine and drinking it at someone's apartment.
You can also avoid wasting money by becoming a savvier shopper. Do your research before you spend money on larger-ticket items, pay attention to stores' return policies so you're not stuck with unwanted goods, and be smart about buying in-store brands, many of which are more than comparable to their name-brand counterparts. And, avoid impulse purchases by shopping with cash. If you make lists before hitting the stores, and bring only enough money with you to cover those purchases, you'll take sudden impulse buys out of the equation.
As far as paying needless interest goes, the answer is simple -- avoid carrying a balance on your credit cards, and try to pay off your existing balances as quickly as possible. Finally, stop paying for digital services you don't use. Even if they're fairly cheap, that's just pointless.
The less money you waste each year, the more you'll have available to save, pay down debt, or put toward fulfilling whatever financial goals you've set for yourself. And although the moves you make on your own may not do much to reduce the $423 billion Americans collectively waste each year, if you stop throwing away your $139 a month, you'll have $1,668 more in your bank account annually, which will make a huge difference.
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