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Nobody likes to admit that they are wasting money, but so many of us do it anyway. Not all money wasting is created equal, of course. There is the garden variety frittering away of precious dollars and cents on needless purchases like fancy clothes and tech gadgets. Then, of course, there is the much more insidious type of money wasting… the kind that you don’t even realize that you are doing until it’s too late. If you are just rolling along in life and doing what you think you ought to, then it can be shocking to be told that you are not making the best use of your funds. Yet, this is exactly the reality check that some people need to get up off their butts and make better choices. If you truly want to live a thrifty lifestyle, you need to lock down your needless spending. That includes actively searching for these money-wasters in all aspects of your life, top to bottom. Keeping a comprehensive spending journal will give you a good idea of the areas in your life that you need to improve upon if you want to attain a more financially-sound lifestyle. Here is a list of the ways that many of us end up wasting money, possibly without even knowing we’re doing it.

One of the most obvious ways of wasting money is on impulse spending. Go figure, this is also one of the hardest forms of money-wasting to break oneself of. Are you prone to whip out your wallet whenever something desirable catches your eye? Don’t beat yourself up; we are all programmed to engage in a certain amount of wish fulfillment. The problem is that all these spur-of-the-moment purchases add up… and quickly! Did you know that a full two-third of purchase decisions are made at the store, and over half these purchases are impulse buys? A purchase is classified as an impulse if you are made to feel like you need the item (especially as a result of marketing strategies like product placement and advertising) and you don’t really need the item. If you are especially prone to impulse purchases, you need to get stricter with yourself in considering the vital difference between wants and needs in life. If you go to the grocery store, for instance, you should take a list and stick strictly to it… no deviations allowed! The grocery store is one area where little impulse buys can quickly add up to one monster of a bill. Working on your self-discipline is the best and only way to curb your unplanned purchases!

Another fairly frivolous way of blowing your money is on services and memberships that you don’t need. How many of us splashed out on a gym membership as the result of a particularly ambitious New Year’s Eve resolution, only to have our workout clothes gathering dust in the wardrobe? Is that money being directly debited from your account every month, despite the fact that you haven’t visited in months? How about that five bucks a month that you shell out on an insurance policy for your credit card? Experts agree that these are massive money-sucks. Get off your butt and cancel both! Make sure that you know exactly how long your contract lasts and what termination penalties you will be on the hook for. Also in this category? Spouses and domestic partners who carry contracts with different cell phone providers. Do what you must to get a family plan, and save some serious cash!

Another way that many of us blow money without realizing it is on bank fees. Have you ever noticed just how much of your paycheck that you throw away on charges from your financial institution? They are almost endless! Some banks have fees for falling below the minimum required balance in your bank account. All accounts charge for overdraft and non-sufficient funds. You can also get shafted on fees when you visit the ATM, especially if the machine you visit is not branded by your own bank. Knowing your bank’s fee schedule and taking pains to ensure you don’t rack up any fees is paramount. The minimum balance requirement is easy enough – just find a bank that offers free checking, and has no minimum balances. Either that, or scrupulously watch your account ledger. Don’t keep a checkbook? It might be time to start! As for overdrafts, this is also easy enough to avoid – and not just by (again) watching your check register like a hawk. Federal banking reform has given American banking customers the right to opt out of overdraft “protection,” and this is absolutely something that you should do. If you don’t have the money in your account to cover a purchase, you cannot make the purchase. It’s really just that simple. If you end up at the register with your card declined because you didn’t keep track of your purchases, then you will probably have a really good reminder of why you should be more vigilant next time! As for ATM fees, avoid those machines like the plague whenever possible. You can get cash in other ways – visiting your own bank, or getting cash back from the cashier when you make a purchase with your debit card at the grocery store or pharmacy.

Carrying needless or redundant insurance coverage is another way that you can be dumping your hard-earned money down the drain and possibly not even knowing it! In a day and age where insurance is very expensive, make sure that you are not paying for more insurance that you need. A great example from a money-saving blog I occasionally read was this: a woman in her forties who has had a hysterectomy really has no need for maternity coverage on her health insurance, does she? Nor does this advice just apply to medical insurance! Car insurance is an area where many people are footing the bill for redundant coverage without even realizing it. You might be paying a few dollars extra for rental car coverage when this is something that is covered by your credit card. Or you could have shelled out for insurance on your cell phone, when it is widely agreed by experts that these policies are nothing but a waste of money.

Interesting enough, however, not carrying ENOUGH insurance can also lead to you wasting money in a big way. If you have skimped on your policy in the hopes of keeping your premium manageable, then you might be setting yourself up for financial disaster if you should happen to have a catastrophe take place. Scrimping on your auto policy or penny pinching with a higher deductible will certainly bite you in the rear if you are in a bad accident and don’t have all the coverage you need to be thoroughly taken care of, AND you have to pay one thousand dollars to get your ride fixed. Experts advise you to create an emergency fund with all the deductibles you could possibly need for your various types of insurance. If you have the cash squirreled away, then by all means feel free to go with a higher deductible in the hopes of saving money every month. You can find the right balance of saving money and covering yourself against further disaster, you just have to look for the line.

This probably doesn’t come as a surprise to you if you are a regular reader of this blog, but carrying a balance on your credit card(s) from month to month is also a terrible way of wasting money. The uneducated might view spending on a credit card as a smart way of financing big purchases, or even just the smaller components of the lavish lifestyle you wish that you had. You can buy whatever you want, and then pay it off over time. Great idea, right? WRONG! If you pay only the minimum (or even just slightly more) each month, you are throwing away money hand over fist on interest payments. Those payments do exactly nothing for you, other than making your bank fat with the spoils of your paycheck. To maximize the use of your own money, pay off your credit card balance in full every single month! If you have a high balance, NOW is the time to formulate a plan for how you can quickly pay down your debt and regain control of your own bank account.

If you have read all this, then hopefully you have had something of an awakening as to all the ways we spend needless money without even realizing it. The saddest part is that this is not even a comprehensive list! Unfortunately, there are many ways that we all blow our cash – both knowingly and unconsciously. The only way to break the cycle is by conducting a brutal financial audit on yourself. Sit down with your spending journal and turn a critical eye onto how your money is going out the door. What fat can you trim from your budget? What are your own areas of weakness? Once you have answered these questions, you will be much better equipped to make smarter financial decisions that will help you get the most out of all the money you bring in! Good luck!