5 Stupid Things You Spend Your Money On

Photo (cc) by LauraLewis23

We all buy dumb things.

I’m reminded of that every time I see the closet full of purses I just had to have. They’re all lovely, but then I look in the mirror and remember I only have two arms and one wallet.

While we all have our individual weaknesses, some stupid purchases seem to cross boundaries. You may have a good reason to buy one of these items, but the following are five things we collectively seem to lose our ability to think rationally about and get sucked into spending our money on something dumb.

1. Gym memberships

You knew this was going to be on the list, right?

There’s a good reason for it: Some statistics indicate that as many as two-thirds of gym memberships are never used. Even some club owners – who are probably more likely to be optimistic about their membership – say 25 percent of members go inactive after six months and half give up on the gym by a year.

Really, unless you are doing some form of training that involves specialized equipment, hit the pavement rather than the gym. And if you can’t resist a membership, at least skip the contract and look for a gym with a month-to-month option.

2. Extended warranties

Now, I know the stores get us at our weakest moment.

You’re going through the checkout, spending your hard-earned cash, and the clerk asks if you want to add the extended warranty. It’s only a few dollars more, and it will protect you in case anything should happen to your new treasured purchase.

Or at least, that’s what we hear. In reality, these warranties come with a laundry list of exclusions.

Plus, they may not be all that extended. Many items come with perfectly good manufacturer warranties. If the manufacturer gives you a year warranty and the extended warranty is covering the same year, what’s the point of paying extra?

3. New cars

I can fess up to buying gym memberships and extended warranties, but I have yet to be seduced by a new car.

Despite what I can only assume is the thrill of being the first and only person to be behind the wheel, I can’t get over the massive depreciation that occurs the minute you drive off the lot. Edmunds.com estimates the value of a car drops nearly 10 percent with the first mile.

Rather than spend through the nose for the privilege of driving new, wait three years for the depreciation drop to level off. Not only will you save money, you may even still get a warranty because many manufacturers offer basic plans that are good for four or even five years.

4. Credit card interest

I don’t care how good your credit card rewards are, paying interest for last month’s groceries and gas is stupid with a capital “S.”

The only time it makes sense to pay credit card interest is when you are self-financing a purchase for less interest than it would cost through a conventional loan. Even then, it might be smarter to save up some cash and skip paying interest, period.

5. Life insurance for your children

Finally, I know those Gerber life insurance commercials and mailings tug at your heartstrings.

After all, what sort of parent are you? Don’t you care about your child’s future? The implication is, of course, that if you really loved your child, you would most definitely be starting their college fund right now by buying a life insurance policy.

Emotionally it might make sense, but financially it’s hard to make a case for child life insurance. The whole point of life insurance is to replace lost income and unless your child is the next Shirley Temple, I’m guessing the kid isn’t pulling in much of a salary at the ripe old age of 3.

You might want to buy a policy if your child has a pre-existing condition that might make it difficult for her or him to buy coverage as an adult. Otherwise, take a pass.

And if you’re feeling guilty about their college fund, start a 529 plan or Coverdell savings account instead. Both offer tax benefits and typically have returns that beat the pants off a whole life policy.

One of the beautiful things about Money Talks News is we have a diverse set of intelligent readers from all walks of life. I’m sure one of you can give a compelling argument as to why everyone should have a new-car experience. Or maybe you can think of another dumb purchase I didn’t mention.

Share your insights and perspective in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
This Chase Card Is Great for Groceries and Cash Back on Everything
This Chase Card Is Great for Groceries and Cash Back on Everything

You could earn more than $600 cash back in your first year just from grocery shopping.

8 Secrets of an Expert Thrift Store Shopper
8 Secrets of an Expert Thrift Store Shopper

Here’s how a veteran thrift shopper scores the best deals — and turns a profit from them.

7 Kitchen Gadgets That Make Healthy Cooking a Breeze
7 Kitchen Gadgets That Make Healthy Cooking a Breeze

These small appliances and cooking aids make healthy eating easy — and they’re all available on Amazon.

8 Products to Reduce Anxiety and Stress
8 Products to Reduce Anxiety and Stress

Current events have you feeling anxious? These Amazon products can take the edge off.

This Online Bank Rated Best for Second Year in a Row
This Online Bank Rated Best for Second Year in a Row

This bank pays interest without charging monthly fees, but there’s a downside.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

10 Things You Should Never Do With Bleach
10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.