The average American household spends $55,978 per year, according to data from the Bureau of Labor Statistics. Unfortunately, we’re not always spending our money wisely. Forty-four percent of people admit lifestyle purchases – like dining out, spa treatments, travel, and movie tickets – keep them from saving less than they should every month, a Wall Street Journal survey found. And we’re not just throwing money away on little luxuries, like that extra glass of wine at dinner or new pair of designer shoes. Many of us are also wasting precious dollars on essential purchases by failing to shop around for insurance, hitting the grocery store when we’re hungry, and making other simple spending mistakes.
Given our loose spending habits, is it any wonder Americans are financially stressed? Almost two-thirds of people (including 46% of those making more than $75,000 a year) don’t have enough money to cover a relatively small unexpected expense, like a $500 car repair, a survey by Bankrate found. Frivolous spending isn’t entirely to blame for our sad bank account balances. Stagnant wages and rising costs for health care, education, and housing are big reasons why many people can’t get ahead. But when you couple those big-picture economic challenges with the small-scale spending mistakes people make every day, it’s a recipe for financial disaster, especially when you realize that even relatively small amounts of saving – as little as $250 for low-income families – can be enough to prevent a money-related crisis.
“Saving isn’t pointless … These days, it’s essential. It’s what stands between you and the financial shocks that could send your life into a tailspin,” explained financial expert Liz Weston in an article for NerdWallet.
If you’re one of the many Americans who is wondering where all your hard-earned cash went, it’s time to take a close look at your spending. We’ve rounded up 10 ways you may be wasting $1,000 or more per year. By plugging just one of these stubborn budget leaks, you could be able to increase your savings and your financial security significantly.