Coffee. Coffee shop coffee at $5 a pop for venti with all the trimmings. How many times have we been told by financial mavens that this is the one thing you need to trim from your budget that’s wasteful?
My guess is you’ve been told that a lot. And certainly I get told, too—at least several times a month by one expert or another pitching me a story about ways to be frugal and thrifty. Personally, I find it lot funnier when some goes over the top, as Beau Chvassus did at a Washington state Starbucks by ordering a “Quadriginoctuple Frap” that came to $47.30.
But recently another list caught my attention, this one compiled by MyBankTracker.com, an independent resource that helps consumers with banking and money decisions. They put together a list of 20 ways Americans are blowing their money — and while the list is not strictly scientific, it has some good data and logic to back it up. It also offers food for thought to anyone looking to take a hard look at how they spend their dough.
“It began with the intent of finding ways Americans leave money on the table,” Alex Matjanec, Cofounder of MyBankTracker.com told Money Under 30. “However, while searching, I found a plethora of ways Americans tend to mismanage money and fall into traps and bad habits, which leaves us with less money at the end of the day. These 20 money-sappers made the cut because they were relatable – many of us, whether we admit it or not, often succumb to the lure of these temptations, or unwise habits.”
So yes, boutique coffee made the top 20 list. But it’s hardly the most egregious sin catalogued here. Right in a row, the list contains these three items; I’ve added some additional reporting here as well.
In 2013, Americans lost a whopping $119 billion to gambling, as sited in this recent piece by The Economist. That’s more than the number two and three countries (China and Japan) combined. MyBankTracker claims that the average American loses almost $400 per year to gambling. Meanwhile, the global gaming industry earned $440 billion last year.
MyBankTracker.com reports that in New York State, where taxes on tobacco are high, low-income smokers spend approximately one quarter of their income on cigarettes. And the national average, though less expensive, is still surprising: 14 percent of Americans’ incomes are spent on cigarettes, rounding out to roughly one-seventh of their total income.
By conservative estimates, the average smoker forks over at least $1,500 a year, according to 2011 figures.
According to the Bureau of Labor Statistics, the average American consumer dedicates 1 percent of all their spending to alcohol, or about $1 of every $100.
That statistic in and if itself may not seem alarming, but for some young adults, this should give pause: Those most vulnerable to problem drinking are young adults between the ages of 18 and 29, according to Caron Treatment Centers. These young adults are particularly susceptible to binge drinking (five or more drinks in two hours for men, four or more drinks in two hours for women). In fact, binge drinking accounts for more than half of the alcohol industry’s $155 billion market, and more than 75% of the beer industry’s market.
Consider this as well: the Bureau of Labor Statistics says that while Americans may not necessarily be drinking out more, they are definitely being charged more. Between the years of 1982 and 2011, there was a 79 percent increase in alcohol pricing in restaurants and bars (adjusted for inflation).
These other items made the list as well:
Credit card interest
Currently, the average credit card debt per U.S. household is $15,270, and in total, Americans owe $856.9 billion in credit card debt, based on American Household Credit Card Debt Statistics as of January 2014.
According to the National Resources Defense Council, Americans waste $165 billion annually by tossing away unwanted snacks and meals. The math works out to approximately $529 per person each year.
And on the domestic side of the equation, MyBankTracker.com also lists warranties that cost as much as the product, unused gym memberships, premium cable TV packages and wasted energy at home as financial sinkholes.
“I think these findings highlight the widespread desire of many Americans to live more conveniently,” “People are willing to pay for convenience, and people are also lax about bad habits. Young adults are at risk of being more vulnerable because of the fact that they have grown up with a fast-evolving consumeristic society that has gained much more momentum in the past few years, due to both innovation and technology.”
As a rule, I know I don’t like to look at my own financial foibles. At least I don’t buy lottery tickets, another item on the list, and I’ve avoided speeding tickets in recent years, another category that made the cut.
But lists like this are useful as points of self-reflection: Are there areas where you could painlessly cut back, or cut down? Do you spend a bit more on your vices than you’d like to admit? Do you agree with lists like this or disagree—what would you add or subtract to MyBankTracker’s Top 20?
In the meantime, I’m headed out to the local Starbucks to get some work done. And I’m going to order a green tea, which is about half the price of a mocha … at least for today.
Want FREE help eliminating debt & saving your first (or next) $100,000?
Money Under 30 has everything you need to know about money, written by real people who've been there. Enter your email to receive our free weekly newsletter and MoneySchool, our free 7-day course that will help you make immediate progress on whatever money challenge you're facing right now.
We'll never spam you and offer one-click unsubscribe, always.