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10 Dumb Ways to Spend Your Money

10 Dumb Ways to Spend Your Money
Written by Oana Schneider

You just received a $2,000 tax refund and you blew it all off throwing a huge party with friends at your house. After getting your pay check, you impulsively went to the store to buy that expensive dress which you have long been keeping an eye on. You’re a harangued parent and just to make your son stop bugging you, you take money away from your grocery budget so you can buy him the latest gaming console.

How many times have you found yourself spending more money than you intended? Whether you do have the extra funds or not, it’s a big no-no to make such impulsive decisions – especially if you don’t want to leave your current month’s budget in a shambles. The dumbest ways to spend your money come from not caring too much for one’s fortune.

But what are you supposed to do? We are all prone to committing such mistakes at one point or another when it comes to handling our finances. There’s really no hard and fast rule that you can follow and you are bound to make such mistakes. But it does pay to be aware of what the dumbest things are to spend your money on so that you can steer clear of it in the first place. That’s exactly what we will learn more about in the next section.

Dumb, Impractical, Useless Things to Spend Money On

What exactly are dumb ways to spend your money? You can probably include purchases that do not actually give you a return of investment or worse, make you spend even more money than you intended. Anything that’s considered impractical, useless or an outright luxury considering the budget that you have to live with can also be eliminated.

In the end, it’s all about prioritizing your needs and eliminating your wants. You can also stick strictly to your budget so that you can prevent yourself from making dumb, impractical and useless purchases in the first place.

So what exactly are the dumbest ways to spend your money? Be it coming from an extra income source, a tax refund, a stroke of luck from a casino game or something else entirely unexpected, here are the dumbest ways to spend your money – and how you can prevent yourself from committing such financial mistakes: 

1. Annual Gym Memberships

A lot of people impulsively sign up for gym memberships during the month of January, with a goal of shedding the excess weight that they gained over the holidays. There’s nothing wrong in paying for a pricey gym membership fee – but only if you’re committed to seeing it through the end. If you feel that you might slack off along the way, you can just ditch the gym and simply use the great outdoors as your work out area.

To give you an idea about how much of a waste gym memberships are if you’re really not that committed to seeing the program through, check out these statistics:

  • According to Statista.com, 7.6% of households with an annual income of $100,000 or more spent $500 to $999 on fitness center programs, gym memberships, personal trainers and similar expenses in 2014.
  • In 2009, fitness centers in the US had a total membership of more than 45 million.
  • Some statistics also show that almost two-thirds of gym memberships are never used.
  • 25% of members go inactive after six months, while half of those who sign up completely give up going to the gym within one year. Check out these ways to spend your money and treasure every penny! 

For 2012, here are the reasons why people quit their gym or health club memberships:

  • 2% said it was too expensive.
  • 7% said that they can easily exercise somewhere else for free.
  • 5% said that the location of their gym was no longer convenient.
  • 9% said the gym was too crowded.
  • 7% said they felt out of place at the health club.

Other reasons include wanting to participate in another type of exercise; finding the ambiance to intimidating; not knowing anybody else; not liking exercise in the first place; not having anyone to guide them; meeting their fitness goals; not knowing what to do in the gym; not meeting their fitness goals; and developing an injury or other condition related to going to the gym.

Really, there are a lot of excuses to not use your gym membership anymore. Why would you sign up and pay for something that you already know you’re bound to abandon sooner or later? A better decision to keep fit for the coming year is to simply run, bike or do other outdoor exercises or activities. If you like the familiarity of using gym equipment, you can just as easily skip the annual contract and look for a cheaper membership that you can renew on a monthly basis.

2. A New Car

Okay, this may not necessarily be one of those dumb ways to spend your money, but buying a new car is really extravagant. When you consider the fact that the minute you drive off a new car from the parking lot, it’s already depreciating in value. Add to that the cost of owning a car starting from gassing it up to regular tune-ups, you would really think twice about buying a new car.

If you don’t want the value of your new purchase to drop by as much as 10% with the first mile, you can wait for up to three years for the depreciation level to drop before you spend money on it. A bonus is that you might still get a warranty, without having to burn a hole in your pocket.

10 Dumb Ways to Spend Your Money

Be careful about your family expenses!

3. Credit Card Interest and Similar Fees

Although we’re living in what is practically a credit card-dependent world, it makes no sense to waste your money paying for credit card interest and similar fees. If you must use your credit card to pay for things that you cannot otherwise afford, make sure that you have the funds to pay for the full amount of the bill when the due date arrives so you can skip on paying the interest. Better yet, don’t swipe the card at all.

4. Daily Online Deals

Similar to coupons, daily online deals are there to lure you with the words free, or 50% off. The problem with daily deals is that they usually have a limited time span for you to purchase, or that there are a certain number of purchases that need to be made before the deal is considered valid.

When you think about all the trouble that you have to go through in order to get half the price off on a restaurant meal that’s an hour away from your house or an auto detailing job at a merchant that’s similarly located, the discount that you will get is not usually worth the extra bother. Look online for efficient ways to spend your money if you have to!

5. Extended Warranties

If you want to find out a few ways to spend your money efficiently, there are a few things you need to keep in mind. Whether it’s for a television set with a huge screen or any other big ticket appliance, extended warranties are almost always never claimed. Despite the fact that it’s just a few dollars more, there are a lot of exclusions under the fine print of the extended warranty’s Terms and Conditions, so it’s better to skip them.

6. Free Shipping Traps

When you visit websites like Amazon, you will be tempted to fill up your shopping cart with additional items so that you can meet the minimum amount to get free shipping. There’s nothing wrong in grabbing this deal if you really need what you will be adding onto your cart. But other than that, the offer is just a retailer’s trap of getting you to buy more than what you actually need.

7. Hot Items That Cost a Fortune

Pet perfumes, diamond-encrusted mobile phone cases, designer beach towels, water bottles, nap pods – these are popular, hot items which are considered a must-have for every season, but they actually cost a fortune. Think twice about making these dumb purchases because they are most likely not worth your money in the end.

8. Impulse Purchases

Nobody can claim of not being guilty of making impulse purchases. To avoid the temptation, simply leave your credit card at home or bring just enough cash to get you to where you’re going and accomplish your goals for the day. Keep reading and find out more ways to spend your money!

9. Keeping Up with the Joneses

Sometimes, parents give in to the whims of their kids who are simply trying to keep up with the lifestyle of their friends.

How do you say no if what they’re asking for is something that you can ill afford as a family? Explain to them what your financial status is, what your future savings goals are, etc.

Better yet, let them understand the pitfalls of keeping up with the Joneses. If all else fails, have your kids save money from their own allowance to pay for what they want, rather than cutting off the grocery budget for the week just so that you can stop them from bugging you about the purchase.

10. Life Insurance for Kids

A lot of insurance providers put up ads that make you feel like an irresponsible parent if you don’t buy life insurance for your kids. However, the point of buying life insurance is to protect your loved ones in case something unfortunate happens to you. By the time that your kid grows into an adult, he or she would have the income to buy an insurance policy. Perhaps the only exception is when your child has a pre-existing condition, which will make it difficult to purchase insurance as an adult.

When you know exactly what constitutes a dumb, impractical or useless purchase, you can prevent yourself from wasting your hard-earned money on it. These ways to spend your money will make you wiser and well-informed!

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About the author

Oana Schneider

Oana Schneider is a published author located in Chicago, Illinois and was part of our team as a communication specialist and blog editor. She writes about lifestyle, family budget and has a degree in Communications.


  • There is so much truth to this article. I think many of the purchases that seem small or insignificant at the time are most weighty expenses that fall under the radar. Oftentimes we buy something impractical or partake in special deals that require spending a certain amount. They may not seem to be very much at the time of purchase, however, all those times add up. I notice a major difference in the amount of money I have when I restrain myself from such incidents.

  • This is all very true and so many people just don’t care. I have had very good luck owning used vehicles other than one lemon in the bunch. The others worked great. There was repairs here and there but nothing major. People who are not into the gym should walk and just do things at home to lose weigh, its not that hard. And impulse buying is the biggy for me I am not sure why people have a hard time letting that go…

    • I think impulse buying has a lot to do with sales, promotions, hot deals, etc. We see something advertised on sale and know it’s only for a limited time. I worry that it won’t be on sale again for a long time or not at all. I end up stocking up on stuff I don’t really need. Not only that, but if the sale is simply amazing it’s hard to pass up. There’s something about purchasing a discounted item that is satisfying.

  • I don’t entirely agree with the thing about daily online deals. SOMETIMES, they can save you money. The trick is to use them for things you would have done anyway. Example: I have cut my starbucks trips to weekly instead of daily. I’m not willing to cut them out entirely…but if I can get a groupon for a discounted giftcard and pay half of what I would have otherwise, I can save money. On the other hand, if you buy a groupon for something you wouldn’t have bought anyway, I agree that you’re not really saving money.

    I have a yearly amazon prime membership so I always get free two-day shipping. I consider prime worth the price. But even with prime, I put items in my cart and let them sit a day or two while I think them over. I find that shopping that way prevents impulse buying decisions, which is my biggest money spending trap. I definitely agree with that one. Avoiding impulse buying is VERY important.

    • I agree with you about the online daily deals. I have found several good deals on Groupon over the years, including one that was around 50% off for a $10 gas card at the gas station I use anyway. It all comes down to self-control. If you get too caught up in the moment, yes, sites like Groupon can be a waste of money, but if you can think rationally about the deals, you can choose to do only those that actually make financial sense.

      • I actually got that 50% off $100 gas card from Groupon, too! That was an incredible deal, although I wasn’t a fan of waiting 10 business days to receive it. Almost three weeks is far too long to wait, but that’s how Groupon helps improve its profits because slower delivery times are so much less expensive compared to priority shipping.

  • Actually, extended warranties have become a lot more consumer-friendly compared to years’ past. They were a terrible deal five years ago, but plenty of these warranties are worth the price on expensive purchases. There are a few items on this list that aren’t necessarily dumb ways to spend money, depending upon how you go about doing so.

  • Good article. These are the sorts of things that people should think about managing correctly. It’s fine to be cutting back on a latte here and there but there are so many other areas where we leak money. The January gym membership is the classic one. Being aware of the financial folly of some of these (and I generally avoid extended warranties – a weigh up the risk-reward) can only be a good thing.

  • Well my dumb spending isn’t as huge as these are, but when I was a student and was haemorrhaging money I started tracking where it went and found out that I was spending a HUGE amount (well, for a student) on snacks from the vending machine, almost the same as I was spending on groceries! So I planned ahead instead and bought snacks at the grocery store, which not only helped me save money, but probably my health too. I bought oatcakes – not the tastiest but extremely portable and when you’re hungry they are just the trick!

    On a side note, I was in the park during winter once with my family and we saw some swans, and people feeding them. I remembered I had oatcakes in my pocket, so broke a few into bits to feed the swans. A few came over to check it out, but then swam away once they had a taste of them! Sorry swans 🙁

  • Well, don’t get me started on gym memberships. I hate it when people join a gym, because I can just tell that they’re never going to actually go and work out, and this means that they will just waste the money that they spent signing up for it in the first place. I was a member while I was a student, and I only went about six times in total, which was pathetic when I consider the amount of money that I paid for the membership. The only gym that I would want to go to now is one where I could pay as I went rather than being stuck in a contract, as I know that I would get much more out of it this way.

    • I do not have a gym membership. I have my own starter set of weights to move me towards my fitness goal. I also have a stationary bike to add to my aerobic exercises. In this regard I agree with you on getting a walk-in payment scheme. If I find my starter set no longer on par with my fitness goals, then I can start with the gym like the mentioned payment scheme.

      However, fitness junkies can remain with the membership. If they go every day without skipping a beat, then it is better for them. Normal people like you and I stick to the pay on demand scheme. Haha.

  • Oh my, yes. There is nothing more frustrating than for me to see people who want to save money buying so useless things! Extended guarantees are proven useless! The thing either breaks in the first year, or three or five years later! And credit card interests… If people just committed to not buy stuff they cannot afford to pay back, probably that would not only help with the interests, but also with better buying decisions. Credit is not money: if you don’t have the money to afford a new couch or a shopping spree, then don’t do it!

  • I still have to instill better discipline to overcome impulsive buying. I leave my credit card at home more often in order to avoid it. This leads to the interests that are now accumulating. It is a hard lesson for me, and I have to learn it. That was not so wise of me.

    Online deals for games during steam sales. That is one of the things I need to stay away from, especially on games I do not plan to finish. That is why I am sharing my steam library with my brother.

  • You know what’s the dumbest way to spend your money? Trying your luck at a casino and gambling. Just don’t do it. Sure it may be fun, but all gambling establishments are designed to be profitable. The odds will always favor the house. So don’t get deluded into thinking that you could win big or that you have a chance.

  • I’m usually good about not making impulse purchases, but a year or two ago I developed a habit of buying myself makeup as a pick-me-up. Rationalized it by saying it was just a few dollars here and there, and I was researching my purchases to be sure I wouldn’t end up with duds I’d just toss right out, but a few dollars here and there still adds up. Plus it was becoming an unhealthy coping mechanism. I’ve cut way back on that now, and my wallet thanks me for it. It’s much more fun to figure out new ways to use what I already have anyway.

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