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How Americans Throw Money Down the Wind: 5 Useless Expenses That Will Save You Big Money by Cutting Down

If we have money, we spend it. Unfortunately, many of us have a habit of spending money on things we don't need. The problem is, we need clothes, insurance, food and housing. And since we need these things, it's easy to overspend on them. The trick is to pay for what we really need, reports Fool.

Photo: IStock

Here are five things Americans tend to waste money on:

1. Fashion

According to a recent study by the US Bureau of Labor Statistics, women and girls spend an average of $545 a year on clothing. Men and boys spend about $326. However, these are averages, which means that some people spend less and others more. And those who chase the latest fashion spend much more.

On the subject: Eight most effective mobile applications that will help you save on gas

If you are someone who follows the latest fashion trends, you may be throwing money away. This is because truly fashionable trends do not last long, ultra-fashionable things quickly lose their relevance.

The best bet for most of us would be to buy classic pieces that won't look '2022' in 2023.

2. Insurance

Insurance is necessary for our financial health. Whether it's home, life or car insurance. However, you can overdo it. Here are some examples where policyholders can cut costs.

Mortgage life insurance

It's less popular than it once was, but some people buy a policy that promises to pay their mortgage if they die. It's almost always a waste of money. Let's say you buy a house with a balance of $300. The cost of a $000 lifetime mortgage policy is usually much higher than the cost of an urgent life policy with the same death benefit.

Collision insurance

If you're driving an old car with a low Blue Book value, paying for collision insurance may not make sense. While drivers always need liability coverage (to pay for any damage they may cause), you can ask your insurance agent how much you're likely to get if your car gets wrecked. If the amount is tied to the value of the vehicle, you may find that it is not worth paying for collision insurance.

Rental car coverage

Before purchasing insurance on a rental car, it can be helpful to review your auto insurance. Often auto insurance for personal vehicles also covers rental vehicles.

Identity theft cover

Check your credit cards to see if they offer free identity theft insurance. If so, you may not need a separate policy. The same is true if you are tempted to purchase travel insurance. Many credit cards cover issues such as lost luggage and trip cancellations. Before you pay extra, make sure you don't already have the coverage you need.

3. Products

It's easy to overestimate how much food we need to buy. According to Feeding America, almost 40% of all food in the US is wasted, Americans throw away about $408 billion. Consider this: Even if you throw away $10 worth of groceries every week, that's $520 a year. By only buying the foods you think you'll eat, you can save or invest an extra $520.

4. Membership and subscription

It's easy to tell ourselves that one day we'll be back at the gym, we'll need the wine club membership we signed up for in Napa Valley, or that we can't live without all the streaming channels available. To see if you can save some money, make a list of all your current memberships and subscriptions. Then review them one by one to determine if they are of value to you and discard the ones you can live without.

5. Houses

As the home buying frenzy of the past two years shows, some people are willing to go over their housing budget to get a home. While it's tempting to buy a bigger house than we need, it's easy to get into trouble. In addition to mortgages, taxes, and homeowner insurance, buying an oversized home means having to pay more for things like utilities and repairs. It could also mean higher property taxes and homeowner association fees.

Think carefully about how you plan to use your home and how much space you need to feel comfortable. For example, if you share 300 square meters with a partner, but usually spend time in the same room, you may have more space than you need. And you have to pay for it.

You may be interested in: top New York news, stories of our immigrants, and helpful tips about life in the Big Apple - read it all on ForumDaily New York.

The American writer Robert Collier once wrote something along the lines of "Success is the sum of a lot of the right little things." And one of the little things we can all do to manage our personal finances is spend less.

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