10 Things We Spend Too Much On — and Cheaper Alternatives

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All too often, we buy things we think we’re supposed to, and whenever there’s an emotional component involved, our tendency to overspend is enhanced even more. Think funerals, weddings and engagement rings, just for starters.

In the video below, Money Talks News founder Stacy Johnson identifies some of the traditional purchases that people routinely spend too much on. Then read on for more examples and solid suggestions for cutting those costs.

1. Funerals

The worst time to shop for a funeral is after a loved one dies, when grief can affect judgment. That suggests this is a purchase you should arrange yourself long before your demise. According to the National Funeral Directors Association, Americans paid an average of $6,560 for a funeral in 2009, the latest year for which cost is available, and that doesn’t include a burial plot, marker or stone, flowers and obituary.

Here’s how to significantly reduce that cost:

  • Consult the government. The Federal Trade Commission regulates “funeral providers.” Here’s a list of the rules they must follow, plus some excellent advice, including:
    •  “The law requires funeral homes to give you written price lists.”
    • “You have the right to buy goods and services separately.”
  • Shop around. Because the law allows you to BYOC (bring your own casket), shop around. Where? Try Costco. While the NFDA says a casket averages $2,295, you can get a beautiful Costco casket for $950 — delivery included. But there are many other discount options online.
  • Get cremated. More Americans are opting for ashes. In 1960, only 3.6 percent did, but that had risen to 42 percent by 2011, says the NFDA. The Neptune Society, one of the largest cremation services, says its costs vary by “local market factors” but insists it’s “a fraction” of burial costs.

2. Weddings

Who doesn’t enjoy reading about “The 12 Most Expensive Weddings in History“? No. 1 is Princess Diana’s wedding ($110 million adjusted for inflation). While the average American wedding costs a fraction of that, it’s still $28,427, according to a survey by wedding website The Knot.

While everyone from Martha Stewart to Bank of America offers advice for saving on weddings, the truth is plain: Many brides refuse to skimp on their big day. So while buying from websites like PreOwnedWeddingDresses.com and limiting the floral arrangements and guest list can save thousands, many are going to eschew those steps.

Maybe these other cost-cutting suggestions will appeal:

  • DIY the DJing. The Knot survey says a reception band will cost about $3,084, while a disc jockey will run almost $1,000. But many couples, especially younger ones, are programming their own music on iPods and simply hiring someone (or even asking a friend) to push the right buttons at the right time. Search online for “DJing your wedding” and you’ll find all kinds of detailed advice.
  • Skimp on the cake. How many weddings have you been to where everyone exclaimed, “That cake was delicious!” Most attendees don’t care, and they only get a sliver, anyway. So don’t buy your wedding cake from a specialty baker. Buy it from your local grocery chain. Since the average cake runs $560, you can easily cut that cake price in half.

3. Diamond rings

You’ll notice we didn’t mention engagement and wedding rings in the Weddings section. That’s because jewelry is an overspending category unto itself – and diamonds may be the most marked-up item on this list. But like funerals and weddings, buying diamonds is fraught with danger because it’s yet another emotional purchase. If we try too hard to save money, we feel like we’re being cheap.

But here’s a secret: Diamond prices are often negotiable, even at major chains like Zales and Kay Jewelers. So while it’s important to know the four C’s of diamonds – carat, color, clarity and cut – the biggest lesson you can learn is to haggle. If your local jeweler or national retailer won’t come down on price, they’ll often be willing to upgrade the setting for a discount or even free.

4. New cars

Money Talks News founder Stacy Johnson lives in a beautiful house on the water, and there’s a 30-foot boat docked out back. But he’s never, ever bought a new car. This is what he says:

When it comes to buying cars, the vast majority of people I’ve known over the years approach the subject with no imagination at all. They simply do what the commercials tell them to and what their friends do: trudge down to the nearest dealer and buy a new car.

Instead, he’s bought used cars for as little as $5,000. How? He avoids car lots. “A few years ago I bought a 1994 Cadillac Fleetwood Brougham from a 91-year-old lady,” he recalls. He suggests asking around – friends of friends seem to value a fair price and honesty. He also consults websites like Kelley Blue Book or Edmunds to establish a value. And finally, he gets the car inspected by a local mechanic. It might cost $50, but it can “save a ton of headaches and bills down the road,” he says.

But if you’re dead-set on a new car, consider more than the price. Also take into account resale value, fuel efficiency, repair record and the cost of insurance.

5. Food

So you don’t cook much or well, and you don’t have the time or space to grow your own fruits and vegetables. Since that sums up the advice in many saving-on-food articles, now what? Here are three quick and easy suggestions:

  • Eat smart when eating out. Of course, the unhealthiest food is often the cheapest. So if you’re both healthy and price-conscious, skip the soup and salad – they’re not only expensive for what you get, they’re not nearly as good for you as you think. Here’s the proof.
  • Buy smart when eating in. If you don’t like to cook, at least make meals with healthy ingredients that are easy to manipulate. Money Talks News recommends 11 of them, from beans to brown rice to frozen whole turkey.
  • Don’t be bored/scared of cooking. You can save big and still eat well. Money Talks News’ Frugal Family Feast recipes feed four for $15 or less.

6. Clothes

Kanye West made headlines recently not just for releasing his new album, but also for selling his own clothing line that featured a $120 white T-shirt. Guess what? He sold a lot of them, says The Huffington Post. While maybe you weren’t among those who purchased one, the fact is that we’ve all overpaid for clothes because we liked the label.

Like food, there’s all kinds of good advice about saving on clothes. Perhaps the most crucial advice is about what not to do: Don’t buy brands. Five years ago, in a study of online clothes shopping, Consumer Reports determined that its readers rated Sears clothes “excellent” 29 percent of the time – and “Victoria’s Secret, the Gap, J.C. Penney, and Kohl’s fared about the same.”

7. Private school

Of all the items on this list, none is harder for scoring a deal. First, you need to find one close to home. Then you need to figure out the best way to compare prices and services. Finally, you want to pursue financial aid. Here are three good places to start:

  • The National Association of Independent Schools. It represents 1,700 institutions nationwide – including religious and boarding schools – and it has a Parents’ Guide with tips for everything from visiting the school to landing financial aid.
  • PrivateSchools.com. This simple-looking website is about financial aid, plus details on scholarships, loans and vouchers. It also has a search function for nearly 30,000 schools.
  • Time magazine and The Week. Six years ago, Time published a controversial story about a controversial study that disputed whether private schools are really any better than pubic schools. A few months ago, The Week did the same. Read them before you decide to spend thousands a year in tuition for something you can get for free.

8. College

While experts offer all kinds of conflicting college advice, they seem to agree on one thing: Spending more than you can afford to attend a big-name school isn’t smart. Like buying clothes, you need to look beyond the pricey labels. As Money Talks News reported last month, “Forbes has released its list of top colleges for 2013 and for the first time, the top two aren’t in the Ivy League.” Start by checking out the U.S. Department of Education’s College Affordability and Transparency Center.

9. Insurance and warranties

We’ve all heard the expression “Better safe than sorry.” But we also know about “Nothing ventured, nothing gained.” You can spend a lot of money insuring yourself against any probability, and insurers also prey on those fears. But many things that can go wrong can be fixed for cheaper than the premiums. For example, cellphone insurance: One Money Talks News partner did the math and determined it wasn’t worth the cost, while an MTN writer came up with five cheap alternatives.

Yet another MTN writer broke down travel insurance and concluded, “If you insure yourself to the extent you’ll never lose a dime, odds are you won’t have a dime to lose, because you’ll spend everything on insurance.”

The same goes for extended warranties. Consumer Reports has always been skeptical of them, pointing out that your credit card may already provide an extended warranty.

10. Credit cards

This item has the potential to rack up big savings with just a few minutes of your time. But too many of us sign up for a few credit cards and never look back, paying high interest on a balance or a large annual fee. Or we cut them up because we think those pieces of plastic got us mired in debt.

But credit cards, wisely used, can help you claw your way out of debt. Reward points are like free money, and balance transfer offers can reduce your interest rate to zero for many months. The problem is finding the right card. Money Talks News’ credit card reviews can help you with that.

Have you overspent in one of these areas because tradition or emotion or other people’s expectations got the best of you? Share your experience on our Facebook page.

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Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Marilyn

    Referring to funerals, you totally forgot to mention Funeral and Memorial Societies which offer their members low cost, dignified funerals. They have a list of funeral directors who work with them to provide the same services at a discounted rate for their members. They list various options from viewing and burial to immediate cremation and everything in between. It’s one of the best ways to save money; you preplan your own funeral so that your loved ones (1) know you wishes and don’t have to make decisions about what they think you’d want and (2) aren’t “guilted” into buying something more expensive.

  • Bill

    There are just not enough little ole ladies in the world (for each of us to take advantage of and get a car at a huge discount). They only thing more dishonest than those that think this is right, are those that suggest everyone should do this.

    • Julie

      You’re making assumptions that are not supported by the article. It doesn’t say how much he paid for the Cadillac he bought from the older lady. He might have paid her more than any other offers she had. She was probably giving up driving and needed to get rid of the car.

  • CynicFan2

    The market on used cars has significantly shifted such that barely used cars (1-3 years from new) cost more than a new car with warranty. Make sure you shop new as well as used. You never know what problems you are buying with used and getting a new car means someone is on the hook to fix them. With ever increasing electronics, older cars will have more and more problems

    • http://ecofrugality.blogspot.com/ Amy Livingston

      Definitely true! Last time we shopped for a car, we found that a new one was $15K, and a 2-year-old one (same model) was $13K. Since we’re definitely keeping the car until it’s at least 15 years old, the cost per year is exactly the same, and the two years we’d miss out on are the trouble-free ones right at the beginning of the car’s life. Plus, the new one had a lot more features, including some really good safety features. It’s always worth doing the math before you buy.

  • Julie

    Bill, you make assumptions that are not supported by the article. It doesn’t say how much he paid for the Cadillac. I’m assuming she listed it for a price and he paid her a fair price for it. Unless you know differently, you shouldn’t assume.

  • bigpinch

    Another thing people spend too much money on is Internet security. Every computer ought to have one good anti-virus program, a good firewall, and a couple of anti-malware programs; a couple because no single company can stay on top of all the web hazards at the same time.
    Several companies offer free basic versions of their software that will update themselves automatically and you can schedule them to run on your computer at times when you are usually sleeping. You don’t have to be a computer expert to make that happen but you do have to learn a little bit about how they work. Not knowing or, worse yet, not having your computer protected from viruses, malware, and hackers can potentially cost you big money. Protecting your computer is not only good for you but, since we’re all connected on the web, good for everybody.

    • Vito V

      Right ! I have been using AVAST antivirus software for several years and have been very happy with it. 100% Free to everyone. No more forking over money to Mcafee. :)

  • power4things

    The used “grandpa” Cadillac with 10K on the clock is the stuff of legends, but can happen. I’ve hit deals of the century, but they come when you’re not looking. Have a strategy for used car buying, and have cash ready. Watch neighbors, senior/retirement living, estate sales. Skip the want ads, subscribe to Hemming’s (the free-view cars on the web site are 6-8 weeks old, subscribers get first crack).

  • Sherrie Ludwig

    I buy a great deal of clothing from consignment shops, especially those near a “rich” neighborhood. If the shop is for-profit (my favorite is) then they inspect the clothes, they are clean, and while you will pay more than at Goodwill, you will be getting a good piece of clothing for lots less than new retail, even with sales. If I am looking for a particular something (like a skirt suit for business wear) I let the owner know, and she can call me if one in my size comes in. Good handbags are another bargain.