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  • Almost 1 in 4 Americans has no emergency savings and without a cash cushion.

  • That's terrible because if something goes wrong, you will have to take unnecessary loans

  • and pay high interest.

  • Interests on credit cards are insane.

  • They could go up 20 or even 30 percent.

  • You have to be a moron to pay that much interest.

  • But even those who actually save some money reportedly said they don't have much in their

  • savings account.

  • When almost 60 percent of the population says that they have less than a thousand dollars

  • in their savings account, you know that we have a problem because a thousand dollars

  • is probably not enough to cover the rent.

  • To be honest, it is difficult to save money today because we are surrounded by so many

  • things pushing us to spend.

  • Even before the video started, you probably saw an ad that called you to visit their website

  • and spend some cash.

  • That's not entirely bad, because spending drives the economy forward.

  • But we have to find some balance so that we don't find ourselves paying a 30 percent interest.

  • People often complain that they can't save because they need to cover their basic expenses.

  • To these people, I want to say that Starbucks coffee is not a necessity.

  • You can make a coffee at home for a fraction of that price, but a 4 dollar coffee cap isn't

  • the most insane thing people waste their money on.

  • There are other things that people waste a fortune that they could have saved otherwise,

  • and this video we are going to discover 5 of them.

  • Hi, Proactive thinkers!

  • Before we move on.

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  • Number - bad habits!

  • What?

  • How is that related to wasting or saving money?

  • You just have to take a look at how much people spend on alcohol, for example.

  • A fortune!

  • Twenty bucks here or 30 dollars there don't seem like much, but if you add it up over

  • the course of a month, it will amount to a significant number.

  • According to the Bureau of Labor Statistics, Americans spend about 1 percent of their gross

  • annual income on alcohol.

  • For the average household, that's $565 a year, $5,650 in 10 years, or a whopping $22,600

  • over 40 years.

  • That doesn't seem much to some of you.

  • But don't be fooled by this number.

  • It takes into account all Americans, including those who don't drink and those who drink

  • once to twice a year.

  • So if you only take into account those who drink regularly, that number would be much

  • higher.

  • A few hundred dollars a month is normal for regular drinkers.

  • The same goes for smoking, gambling, and other bad habits.

  • The average cost of a pack of cigarettes is $6.28, which means a pack-a-day habit sets

  • you $188 per month or $2,292 per year.

  • These numbers might not frighten you, but if you count the opportunity cost, you will

  • probably get rid of these habits immediately.

  • The opportunity cost basically means what you could have done with that money if you

  • haven't spent on drinking or smoking.

  • If you throw that 2292 dollars every year into an index fund with a 7 percent return,

  • with the power of compound interest, you can expect to have $489,593 in 40 years.

  • Next time before you buy that pack of a cigarette, imagine that number in your head.

  • Especially today, investing is super easy.

  • You can do it with a few clicks on your phone and avoid commissions that investors had to

  • pay back in the days.

  • Investing doesn't just mean the stock market.

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  • And now lets get back to the video.

  • Smoking is terrible, but you know what's worst than smoking.

  • 2.

  • Paying high-interest rates.

  • Credit cards are great.

  • It's probably the best way to build your credit score and maintain it.

  • It is extremely important because it will help you to get loans and lower interest.

  • But here is when things get terrible.

  • When you use a credit card to pay for things you cannot afford, what ends up happening

  • is that, you will not be able to cover your credit card debt at the end of the month and

  • the interest starts rolling.

  • Have you ever taken a look at how high credit card interest rates are?

  • They could go as high as 20 or 30 percent.

  • The interest on your mortgage would seem like peanuts in front of credit card rates.

  • That might not seem like a big deal, but 41 percent of credit card users reported that

  • they are failing to pay their bills on time.

  • And that's what these banks are counting on.

  • They want you to forget!

  • No wonder why total credit card debts have risen to almost a trillion dollars nationally.

  • So don't ever get a credit if you can't control your spending habits, especially if you have

  • some really bad habits.

  • How I keep my credit card interest-free is that I know how much exactly I spend.

  • I can use a debit card to pay my bills, and I have absolutely no problem with that, but

  • I use a credit card because I would rather keep building my credit score.

  • And on the last day of each month, I cover all my debt even though I might have another

  • few weeks.

  • If you still forget to pay your debt on time, then whenever you pay your bills or cover

  • your rent, make sure you include paying for your credit card simultaneously.

  • One of the trends that have been rising for the last few decades is

  • 3.

  • Fast Fashion!

  • And you know what?

  • I hate fast fashion!

  • Don't get me wrong.

  • They do make some good clothes, and there is nothing wrong buying clothes and I personally

  • love to dress properly, I am a big fan of fashion!

  • But here is the problem.

  • Since the market is flooded with cheap clothes, we, on average, started buying more clothes

  • than need.

  • Take a look at your wardrobe.

  • Do you really wear most of your clothes as often as you think?

  • I am sure that you have 2 or 3 pairs of jeans and a few t-shirts that you were every day.

  • The rest of your clothes have been lying on your wardrobe, probably for years.

  • And like everyone else, you have clothes that you never wore but you though you need them

  • when you were shopping.

  • The trend has become so popular that some people shop every week.

  • That's insane!

  • What I hate about it the most is that, just because the clothes are cheap, you end up

  • buying more clothes than you need.

  • The question is, why buy a lot of low-quality cheap clothes?

  • Instead, of having 10 or 20 pairs of jeans, just get yourself 2 high-quality jeans that

  • you will feel comfortable wearing, and you would look much better.

  • And you will end up spending a lot less.

  • That's not the worst way humanity is wasting money.

  • No matter how many clothes you buy, they definitely won't harm yourself as the next thing on our

  • list does.

  • 4.

  • Eating Garbage What?

  • Who eats garbage?

  • Unfortunately, most people literally eat nothing but garbage because most of what's sold on

  • the shelves of grocery stores is made out of harmful ingredients in many ways.

  • And if you consider the fact that fast food has become the new norm for years already.

  • You can imagine how much garbage people are eating.

  • People spend most of their money on food, and there is nothing wrong with that.

  • But at least consume quality food that isn't harmful to your body.

  • Almost all junk food that's sold are filled with different types of sugar to boost your

  • dopamine when you consume it and create a sense of addiction so that you come back for

  • it again and again.

  • And that's done purposefully.

  • So we ended up developing a habit of always eating junk food, sneakers bar, chips, or

  • soft drinks.

  • Some studies even say that a lot of people spend almost 90 percent of their income on

  • food, which is absolutely insane!

  • 5.

  • And lastly Unnecessary monthly subscriptions

  • Businesses realized that it's much better to sell you a subscription that's cost a few

  • dollars a month than a product with a few hundred dollar price tags.

  • First, you aren't going to hesitate that much since it's just 10 dollars a month, especially

  • if you enter your credit card information now.

  • You will get the first month for free, but later on, you will completely forget about

  • it, but the company will keep charging you forever.

  • There is nothing with getting a subscription you use or need, but when you sign up for

  • the gym but then end up visiting it once or twice a year, I don't think you need to renew

  • your annual membership.

  • 84% of Americans unaware of how much they spend on subscription services.

  • Have you realized that everything has recently turned into a subscription, music, video,

  • movies, apps, games, softwares?

  • Every few months, audit your spending and get rid of these unnecessary subscriptions

  • because you will end up paying a fortune for something you don't even use.

  • And that's your list of insane ways people waste the money they worked to earn with blood

  • and sweat.

  • And now it's your turn!

  • What would you add to this list?

  • How do you waste money?

  • Let me know in the comments below.

  • Other than that, make sure to give this video thumbs.

  • And hit that subscribes button if you are new around here and if you want to be notified

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  • Thanks for watching and until next time.

Almost 1 in 4 Americans has no emergency savings and without a cash cushion.

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5 Insane Ways People Waste Their Money

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    Summer posted on 2020/09/06
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