5 things Americans spend too much on
We're all guilty of spending too much money at some point or another. Even when we know the importance of a good budget and have a regular savings routine, we can get off track. Because Americans are big spenders in general, it should come as no surprise that we spend way too much on stuff we don't need — and, interestingly, stuff we do need.
Whether you realize it or not, here are five things you're probably spending too much on.
We need food for survival, and because food is a necessity, some people never think to calculate how much they actually spend on food on a yearly basis. They don't know if they're spending too much.
There are no hard and fast rules regarding how much we should spend on food every year. But considering how a trip to the grocery store can be just as tempting as walking through a clothing store, there's a good chance that we're spending more than we need.
According to the Bureau of Labor Statistics, a family earning $69,629 in 2015 spent an average of $7,023 on food (includes food at home and away from home), which comes to about $585 a month. The cost of food periodically increases, so we can expect slight increases in our grocery bill. But there are plenty of ways to shave down this number and save.
Clipping coupons, signing up for grocery store loyalty cards, and resisting the urge to stock our carts with stuff we don't need — such as unhealthy snacks — can result in big savings. And if we limit the amount of times we dine out every month, the savings increase.
If you reduce your grocery bill by as little as $20 a week, that's a savings of $1,000 a year. Buying less also makes sense considering how "a four-person family loses about $1,500 a year on wasted food," according to the National Resources Defense Council.
2. Bottled Water
If you're looking for ways to save on groceries, you can start by cutting bottled water from your grocery list. Bottled water has become a necessity in many U.S. households, with many people preferring this over tap water for various reasons. Some people don't trust their city's water supply and others simply enjoy the taste of bottled water.
But our love affair with bottled water is costly. On average, Americans spend about $11.8 billion on bottled water every year, and the average person in American consumes 167 plastic water bottles annually. Given the average cost of $1.45 per bottle, that's $242 a year per person, which is expensive considering how we can purchase a reusable water filter for $30 or $40.
Also check out the items you should avoid purchasing online:
If you broke the habit of buying coffee every day, you probably think you're saving money — and maybe you are. Brewing your own coffee at home is supposed to save, yet a new study found that Americans are spending more on coffee than ever before, despite drinking less due to single-serve coffee machines.
It's predicted that Americans will spend $13.6 billion on coffee in 2016, which is up from the expected $12.8 billion in 2015. This is primarily due to the fact that more Americans are drinking single-serve cups and paying a premium for this convenience. Using K-cups can cost up to five times more than using a coffee pot. Fortunately, there are ways to save like purchasing a reusable filter for Keurigs and other single-serve coffee pots, as well as skipping the grocery store and buying K-cups from discount stores or online from Amazon and eBay.
Once you're ready to buy a house, you'll seek a property that offers everything you're looking for and more. But getting everything you want comes at a price, and unfortunately, some people buy more house than they can afford.
A competent mortgage lender won't approve a loan for more than you can afford. But if you have excellent credit, some lenders are flexible and they'll allow you to spend a greater percentage of your gross income on housing. But just because you're approved for a particular loan amount doesn't mean you should spend your max.
Whether you're renting or buying, keeping house payments below your means creates more disposable income that can go toward saving a rainy-day fund or paying off debt. According to a 2014 report, millions of Americans spend too much of their monthly incomes on housing — more than 30% of their income. Ideally, house payments should be no more than 28% of your gross income.
Weddings are a special day. If you stay together forever, this can become one of the best days of your life. But just because weddings are a memorable event doesn't mean you should wipe out your savings or go into debt.
In 2015, the average cost of a wedding increased to $32,641. Some people could argue this is a reasonable amount. But given how nearly one in two marriages in the U.S. ends in divorce, spending this type of cash is a waste of money.
Even if a marriage never crumbles, $32,000 is too much to spend on a day that's only the beginning of your journey together. Rather than begin a marriage in debt or wipe out your savings account, plan an inexpensive ceremony and put the majority of the money toward a home purchase or save it for the future.