10 Things We Spend Too Much On


What do you spend too much on?

All too often, we buy things we think we’re supposed to, and whenever there’s an emotional component involved, our tendency to overspend is enhanced even more. Think funerals, weddings, and engagement rings, just for starters.
Read on for more examples of traditional purchases people routinely spend too much on and solid suggestions for cutting those costs.

1. Funerals
The worst time to shop for a funeral is after a loved one dies, when grief can affect judgment. That suggests this is a purchase you should arrange yourself long before your demise. According to the National Funeral Directors Association (NFDA), Americans paid an average of $7,075 for a funeral in 2012, and that doesn’t include a burial plot, marker or stone, flowers, and obituary.
Here’s how to significantly reduce that cost:
Consult the government. The Federal Trade Commission regulates “funeral providers.” In its article, “Shopping for Funeral Services,” the FTC lists the rules providers must follow, plus some excellent advice, including:
“The law requires funeral homes to give you written price lists.”
“You have the right to buy goods and services separately.”
Shop around. Because the law allows you to BYOC (bring your own casket), shop around. Where? Try Costco. While the NFDA says a casket averages $2,295, you can get a beautiful Costco casket for $950—delivery included. But there are many other discount options online.
Get cremated. More Americans are opting for ashes. In 1960, only 3.6 percent did, but that figure rose to 42 percent by 2011, says the NFDA. The Neptune Society, one of the largest cremation services, says its costs vary by “local market factors” but insists it’s “a fraction” of burial costs.

2. Weddings
Who doesn’t enjoy reading about “The 12 Most Expensive Weddings in History”? Number one is Princess Diana’s wedding ($110 million adjusted for inflation). While the average American wedding costs a fraction of that, it’s still $28,427, according to a survey by wedding website The Knot.
While everyone from Martha Stewart to Bank of America offers advice for saving on weddings, the truth is plain: Many brides refuse to skimp on their big day. So, even though buying from websites like PreOwnedWeddingDresses.com and limiting the floral arrangements and guest list can save thousands, many are going to eschew those steps.
Maybe these other cost-cutting suggestions will appeal:
DIY DJing. The Knot survey says a reception band will cost about $3,084, while a disc jockey will run almost $1,000. But many couples, especially younger ones, are programming their own music on iPods and simply hiring someone (or even asking a friend) to push the right buttons at the right time. Search online for “DJing your wedding” and you’ll find all kinds of detailed advice.
Skimp on the cake. How many weddings have you been to where everyone exclaimed, “That cake was delicious!” Most attendees don’t care, and they only get a sliver, anyway. So don’t buy your wedding cake from a specialty baker. Buy it from your local grocery chain. Since the average cake runs $560, you can easily cut that cake price in half.

3. Diamond rings
You’ll notice we didn’t mention engagement and wedding rings in the Weddings section. That’s because jewelry is an overspending category unto itself—and diamonds may be the most marked-up item on this list. But like funerals and weddings, buying diamonds is fraught with danger because it’s yet another emotional purchase. If we try too hard to save money, we feel like we’re being cheap.
But here’s a secret: Diamond prices are often negotiable, even at major chains like Zales and Kay Jewelers. So while it’s important to know the four C’s of diamonds—carat, color, clarity, and cut—the biggest lesson you can learn is to haggle. If your local jeweler or national retailer won’t come down on price, they’ll often be willing to upgrade the setting for a discount or even free.

4. New cars
Money Talks News founder Stacy Johnson lives in a beautiful house on the water, and there’s a 30-foot boat docked out back. But he’s never, ever bought a new car. This is what he says: “When it comes to buying cars, the vast majority of people I’ve known over the years approach the subject with no imagination at all. They simply do what the commercials tell them to and what their friends do: Trudge down to the nearest dealer and buy a new car.”
Instead, he’s bought used cars for as little as $5,000. How? He avoids car lots. “A few years ago I bought a 1994 Cadillac Fleetwood Brougham from a 91-year-old lady,” Johnson recalls. He suggests asking around—friends of friends seem to value a fair price and honesty. He also consults websites like Kelley Blue Book or Edmunds to establish a value. And finally, he gets the car inspected by a local mechanic. It might cost $50, but it can “save a ton of headaches and bills down the road,” he says.
But if you’re dead-set on a new car, consider more than the price. Also take into account resale value, fuel efficiency, repair record, and the cost of insurance.

5. Food
Here are two quick and easy suggestions for saving money on food:
Eat smart when eating out. Of course, the unhealthiest food is often the cheapest. If you’re both healthy and price-conscious, skip the soup and salad—they’re not only expensive for what you get, they’re not nearly as good for you as you think.
Buy smart when eating in. If you don’t like to cook, at least make meals with healthy ingredients that are easy to manipulate. Money Talks News recommends using cheap and easy ingredients like beans, brown rice, eggs, frozen green peas, and frozen whole turkey.

6. Clothes
Kanye West made headlines recently not just for releasing his new album, but also for selling his own clothing line that featured a $120 white T-shirt. Guess what? He sold a lot of them, says The Huffington Post. While maybe you weren’t among those who purchased one, the fact is we’ve all overpaid for clothes because we liked the label.
Like food, there’s all kinds of good advice about saving on clothes. Perhaps the most crucial advice is about what not to do: Don’t buy brands. Five years ago, in a study of online clothes shopping, Consumer Reports determined that its readers rated Sears clothes “excellent” 29 percent of the time—and “Victoria’s Secret, the Gap, J.C. Penney, and Kohl’s fared about the same.”

7. Private school
Of all the items on this list, none is harder for scoring a deal. First, you need to find one close to home. Then you need to figure out the best way to compare prices and services. Finally, you want to pursue financial aid. Here are a couple of good places to start:
The National Association of Independent Schools. It represents 1,700 institutions nationwide—including religious and boarding schools—and it has a Parents’ Guide with tips for everything from visiting the school to landing financial aid.
PrivateSchools.com. This simple-looking website is about financial aid, plus details on scholarships, loans, and vouchers. It also has a search function for nearly 30,000 schools, including those in the Fargo-Moorhead area.

8. College
While experts offer all kinds of conflicting college advice, they seem to agree on one thing: Spending more than you can afford to attend a big-name school isn’t smart. Like buying clothes, you need to look beyond the pricey labels. As Money Talks News reported last summer, “Forbes has released its list of top colleges for 2013 and for the first time, the top two aren’t in the Ivy League.” Start by checking out the U.S. Department of Education’s College Affordability and Transparency Center.
For North Dakota residents, NDSU’s estimate of costs for the current school year is $14,763; UND’s is $15,194. For Minnesota residents, MSUM’s estimated cost for the current school year is $14,948; U of M-Twin Cities’ is $23,124.

9. Insurance and warranties
We’ve all heard the expression “better safe than sorry.” But we also know about “nothing ventured, nothing gained.” You can spend a lot of money insuring yourself against any probability, and insurers also prey on those fears. But many things that can go wrong can be fixed for cheaper than the premiums. For example, cell phone insurance: One Money Talks News partner did the math and determined it wasn’t worth the cost, while an MTN writer came up with five cheap alternatives.
Yet another MTN writer broke down travel insurance and concluded, “If you insure yourself to the extent you’ll never lose a dime, odds are you won’t have a dime to lose, because you’ll spend everything on insurance.”
The same goes for extended warranties. Consumer Reports has always been skeptical of them, pointing out that your credit card may already provide an extended warranty.

10. Credit cards
This item has the potential to rack up big savings with just a few minutes of your time. But too many of us sign up for a few credit cards and never look back, paying high interest on a balance or a large annual fee. Or we cut them up because we think those pieces of plastic got us mired in debt.
But credit cards, wisely used, can work in your favor. Reward points are like free money, and balance transfer offers can reduce your interest rate to zero for many months. The problem is finding the right card. Money Talks News’ credit card reviews can help you with that.
Source: www.moneytalksnews.com
Written for Money Talks News by Michael Koretzky

Filed Under: FeaturedMoney & Consumer

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