Recently, I was thinking about the last “7 Ways to Save Money” list I made and thought just how typical and boring it really was. I thought about what people really wasted their money on. Then I got to think that in reality, people waste money on different things at each different stage in their life.
So I decided to start off by targeting the worst money waster: the mid-twenties dude – which is what I recently past.
1) You don’t need to blow $150 a night at a bar/club to have fun: Back when I was mid-twenties, I wasted a lot of money on booze. My buddies and I used to go out to bars and waste $150 – $200 a night on booze and fast food. Looking back now, it is easy to see what a waste of money it was. But in addition to that, I was foolishly thinking that it would help me pick-up the hotties. The reality is that first, most respectable girls do not look at a guy that gets wasted and think that he is a good catch; second, if you’re throwing money around like that, you’ll probably be attracting the wrong types of women. Thirdly, you’ll end up wasting most of the next day recovering and regretting what you have done. Don’t get me wrong; having a bender once in a while is one thing, doing it weekend in and weekend out is another. Instead, when I go out now, I take a much more reserved approach to drinking, and only have a few drinks.
2) Downsize the vehicle: I think most guys are guilty of this one. Which guy doesn’t want to have a nice vehicle, rolling up to a red-light with your chrome 22″ spinners – blacked out windows… and which hottie isn’t going to check you out. But, if you bought the rims credit and have a real fat car loan, the real question is which women is going to want to stay with you? If your vehicle is too expensive for you to drive, maybe you should think selling to pay off the debt associated with it. If you cannot afford to keep the car you have now but don’t want to get rid of it, you should try growing up and start understanding that in life, you can’t have everything. The reality is that you should downsize it at your will or the car will have to get re-possessed cause you can’t afford it.
3) Tickets to the game/Sports: Anybody who watches football, hockey or soccer, understands how fun it is cheering your favourite team. In addition, to that, watching it with buddies over some beers can be one of the best things. However, if you bought all that shit on your credit card and don’t have the money to pay for it, it can be one of the stupidest things to do. Let’s say you go out to a Stanley Cup Playoff Game – let’s say tickets cost $500, and you spent $150 on booze and food, $30 on gas and parking, and another $20 on miscellaneous things like 50/50 draws etc. Your total bill would be $700. Using a minimum payment of 5%, it would take you roughly 62 months to get rid of your debt, and you will pay $295.32 in interest. If you used a fixed payment of $35.00, it would still take you 25 months to get rid of your debt, and you would pay $158.62 in interest. That just takes the fun out of going to the game doesn’t it.
4) Gambling: I’m not going to lie. I am guilty of this one too. However, gambling is something that I just do not do anymore. It is just not worth it. Fact is that any casino that you go to, the odds are always stacked against you. No matter what game you are playing, the house always has the edge on you. They don’t make millions of dollars a month by splitting the odds with you 50/50. For example, roulette was one of my favourite games at the casino. However, have you ever calculated your odds of winning?? Well, if you bet on one number, your odds are 1/38 or 2.63% but the casino only pays you 35:1. So they have 100% – 2.63% chance they are going to win. However, because they only pay you 35:1, they have a 3/38 edge over you – or a 7.89% edge when paying out. So 7.89% – 2.63% = 5.26% house edge. If you want to just want to waste some money and have fun, that’s one thing, but gambling can ruin your financial goals – forever. So be very careful.
5) Golfing: There is something to going out with the boys and playing a round of golf while enjoying the sunshine and having a few beers. However, it is undoubtedly one of the most expensive sports you can play. Personally, I think it’s a rich man’s sport. To prove this, let’s do the math on this. Let’s assume you play for half the year – so 26 weeks and average 2 games per week @ $75 a round. Every year, you would be spending $3,900, just on greens fees. However, include the beer, food, travel, golf balls, clubs, etc., and it can easily reach $6,000 a year. Let’s assume you make $200k a year, this would be manageable. However, if you only earn $75,000 before tax, and take home only about $56,000, you would be spending over 10% of your after-tax income to a sport. And let’s be honest, it’s barely a sport.
6) Clothing: In high school, those who wear old tattered clothes are usually ridiculed and pestered. However, young men and women (even teenagers) nowadays wear designer clothes that are way over the top – jeans that cost $250 or more – shirts that cost well over $100. While you should definitely strive to look and feel good, it doesn’t mean you need to spend $250 on every pair of jeans you have, or $100 on every shirt you have. That’s just crazy and would probably cause you to go broke. Instead, try varying your wardrobe to include an everyday $50 – $75 pair of jeans and maybe a few $30 shirts.
7) Electronics/Phones/Computer: Technology is a good thing. Right now, I am typing on my brand new iPad and I love it. However, I do not just go out and buy things willie nillie. The average American spends approximately $1,200 a year on technology. Don’t forget that this means that some spend none and others spend greatly more than $1,200. You should look at what you spend and compare it to the average. Also, try to decide whether you really need what t is you are buying – maybe you can do without.
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