The key to growing your wealth is to spend your money on what counts. Business Insider helps us make better money choices by sharing with us what we often waste money on.Blame the government or blame the economy, but Americans should also blame themselves for their declining net worth.
We waste a whole lot of money. Seriously, over half a trillion dollars each year — and that's just for areas with available data.
So what counts as a waste of money? We included fines, bad investments like lottery tickets, and unhealthy consumption items like cigarettes and alcohol. We're not telling you how to live your life — but we are identifying costs that everyone should consider cutting.
$6 billion in unused gift cards each year
$41 billion in gift cards went unused from 2005 to 2011, worth $6 billion a year, according to TowerGroup. Most of these are considered lost or discarded.
But don't ditch those unused gift cards just yet — you might be able to turn them into cold, hard cash.
Last year, deals site CouponSherpa launched a movement called Gift Card Exchange Day, during which consumers could sell their unwanted or slightly used gift cards for cash.
Read on for more.
On the marketplace, people post an ad for their card in the hopes that a gift card reseller will buy it. "On average you could pocket between 75 and 92 percent of the value of your original gift," reports BI's Mandi Woodruff.
$7 billion in ATM fees each year
Americans pay through the nose at the ATM, according to Bankrate.
What's more, these penalties are higher than ever right now.
The only way to ditch them may be dumping your big bank for a credit union. Not only do some credit unions reimburse you for ATM fees, some will even pay you for using their card.
$12 billion in traffic tickets each year
Drive too fast? Park in the wrong spot? You are spoon-feeding money to the government and the insurance companies.
The National Motorists Association estimates that Americans spend 7.5 to 15 billion dollars on traffic tickets, assuming 25 to 50 million traffic tickets, costing an average of $150 with an insurance surcharges for half of them costing around $300. (We averaged the range in this estimate.)
$29 billion on candy each year
Most candy has negative nutritional value. We're going to go ahead and call it a waste of money.
How much? US confectionery sales totaled $29 billion in 2010, with 60 percent spent on chocolate.
$31 billion on lottery tickets each year
$44 billion on tobacco each year
Americans burned $44 billion on tobacco, according to the BLS.
It's become such a problem that low-income New Yorkers are spending a quarter of their annual salary on cigarettes. And we're not counting the indirect health costs, which are covered in a later slide.
But help may be on the way. Researchers like Dr. Ronald Crystal of Weill Cornell Medical Center are developing vaccines that could provide immunity to nicotine and even cocaine. It's a one-time shot that could help stop addiction.
$50 billion on alcohol each year
Americans spent $50 billion getting drunk, according to the BLS.
One might argue that booze isn't a waste of money, but, well, we're not convinced.
Again, we're not counting indirect costs related to drinking.
$49 billion on credit card interest each year
We calculated this figure based on a Gallup survey showing that the average cardholder had an unpaid balance of $2,210 at the end of the month. Throw in an average APR of 12.75% for 174 million cardholders, and you get total annual interest payments of $49 billion.
You seriously need to stop wasting money on credit card interest and end the debt cycle for good.
$69 billion at the casinos each year
Casinos earned gross revenue of $125 billion in 2010.
We're going to be generous and estimate that 45 percent of this money was returned to gamblers in winnings. That leaves $69 billion money that people willingly gave away.
Warren Buffett says it was while watching people throw away money at a casino that he first realized how easy it would be to get rich.
$76 billion on soda each year
The US soda market is worth $76 billion, according to Beverage Digest.
As your mom told you, these drinks provide no nutritional value, and you're better off drinking water.
$146 billion in wasted energy each year
That's our calculation based on $443 billion in annual home energy costs, and the claim that consumers could cut energy costs by a third if they followed recommendations from the government-backed Energy Star program.
Energy Star's website has a whole host of suggestions to save you money:
- Changing your air filter every three months at the minimum and using a programmable thermostat could save you over $180 a year.
- Lowering your water heat thermostat from 140 to 120 degrees can save you more than $400 a year.
- Replacing five light bulbs with Energy Star bulbs or fixtures can save you $70 per year, and Americans waste $9 billion on energy-inefficient lighting.
- You could save $40 a year by only using cold water to wash your clothes and as many as $36 per year by using the right-sized pot on your stoves.
- In the average home, "75 percent of the electricity used to power home electronics and appliances is consumed while the products are turned off."
$165 billion in wasted food each year
When you trash food, you throw out money. The habit costs $165 billion nationally, according to the National Resources Defense Council, which means it costs $529 per person.
If you're tempted to toss out old food, then pick up new habits.
Hit up Google to find creative uses for certain foods, offer leftovers to Fido, or plan meals around weekly sales so you don't overbuy.
Another option is to pile up your plate with veggies. They'll help you lose weight and are often cheaper than the packaged and processed goods at the front of the store.
Who knows how much wasted on bad health?
This is where the indirect costs of smoking, drinking, and eating junk food come in.
Bad health leads to lower productivity and higher insurance and health care costs — even if universal health care spreads the cost to other tax-payers.
The real problem is that bad health makes people less happy and takes years off one's life.
And that's just the start . . .
We could only find estimates for some of the many ways that Americans throw away money. But don't despair! You, too, can live a life based on accruing wealth.
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How to Turn Your Family Into Old Money
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