by Stacy Francis, CFP®, CDFA
This weekend, my family and I spent some time browsing plasma TVs at Best Buy. Strolling past walls of pulsating light and sharp-as-a-knife imagery, I was amazed at how much prices have dropped lately. In line, I was even more amazed at the number of people who purchased extended warranties for their electronics. From a statistical standpoint, it makes little sense. The vast majority of such products malfunction either early on - while still under the manufacturer’s warranty - or way down the road, long after the extended warranty has expired. In this economy, few of us can afford to waste money. So do yourself a favor and decline these offers.
While we’re on the topic of money wasters, I would like to point out another one: gym memberships. I’m not saying you shouldn’t work out! Few things – if any – are more important than good health. But not only do many people pay more than they need to for their memberships (you can use sites such as globalfit.com to compare prices), but many of us don’t need the gym to stay in shape, at least not all the time. This time of the year, why not go for a run or bike ride in the park? The fresh air and change of scenery are free bonuses! I work out at 5:30 am four times a week and love being outside. It is relaxing and also super effective at helping me drop my post pregnancy baby weight.
The third major money waster on my list is overdraft fees. If you are unable to keep a cushion of a couple of hundred dollars in your account or if your balance bounces all over the place, consider signing up for overdraft protection. It typically costs $5-$10 per year, and with overdraft fees starting at $30 per transaction, you may end up saving hundreds.