12 Things Broke People Often Waste Their Money on (And Keep Them in Debt)

Life is expensive. Just paying for housing, gas, and groceries can be a struggle. Many people seem strapped for cash — like your friend who never picks up the tab and tells you about their money woes between sips of their $8 coffee drink.

There’s a word for people like this: broke. Maybe this was you in your early 20s, or it’s you right now.

While broke people may struggle to pay their bills and save, many seem to always have funds for unnecessary purchases that keep them in debt.

If you’re trying to get ahead financially, consider cutting back on these 12 purchases.

While less common than a few decades ago, nicotine still holds a major grip on many Americans — especially those struggling financially. According to the American Lung Association, those living below the poverty line are twice as likely to smoke and to smoke more heavily (consuming more cigarettes per day).

The average cost per pack varies greatly by state, but if you spend $8 a day on cigarettes (roughly a pack a day), that adds up to $2,920 yearly. You can plug figures into online smoking calculators to see how much you could save.

Lottery tickets are another vice more common among low-income individuals. According to Fortune, the poorest households in the U.S. spend 33 times more of their income on scratch-offs and other lottery tickets than rich people do.

American adults spend roughly $600 a year on tickets in the country's poorest zip codes, compared to $150 in the wealthiest ones.

Overall, large prizes are becoming more challenging to win. Lottery tickets are increasingly becoming a magnet for economically disadvantaged individuals hoping to "get out" of poverty.

Food delivery is a major “vice” for Americans of all income levels. No one wants to cook dinner at the end of a stress-filled workday. They don’t even want to think about what to cook, let alone put it on the table.

It’s much easier to “make” dinner with a few taps on your phone. But DoorDash and similar apps come with lots of hidden fees, and it’s just as spendy as eating out, which is often spendier.

Netflix starts at only $6.99 a month and offers an endless line-up of entertainment. Or maybe not so endless because you can also get Hulu for just $7.99, Disney+ for $7.99, and Apple TV for $9.99.

While not everyone subscribes to these four streaming apps, most people subscribe to more than one streaming service. A few dollars here, a few dollars there: It all adds up to death by a thousand cuts.

Whether it’s Android or Apple, many people love having the latest smartphone model — so much so that they’ll go into debt to acquire it or take on a monthly payment plan.

T-Mobile, for example, carries the new Apple iPhone 16 with pricing starting at $829.99. Monthly financing is available starting at $34.59.

Making do with your old phone can stretch your budget much further. You can also consider switching to a free burner that still gives you access to WiFi and your favorite apps.

For some, cars are a means of transport. For others, they’re a form of self-expression. And kitting out your car with expensive rims, body kits, speakers, and other upgrades is not cheap. Body kits can cost well over $1,000. Four new tire rims can cost $800 to $2,000.

Skipping these upgrades can save you thousands of dollars, which you could use to open an IRA or put toward a down payment on a home.

For many of us, there’s no better daily ritual than our morning Starbucks run. However, the morning java jolt can cost $8 a day. That’s $2,920 a year — roughly the same as being a pack-a-day smoker.

Cutting back will make your occasional coffee run an occasional indulgence, not a daily necessity — and save you big bucks.

The pursuit of youthful beauty isn’t cheap. Just visit any Sephora and scope the $610 jars of beauty cream. Many people, not just the chronically broke, overspend to look and feel beautiful. Waxing, manicures, pedicures, miracle serums, and other beauty procedures all add up to a $446 billion industry.

You can get a bottle of nail polish for $10 at Ulta. Drink water and wear sunscreen religiously for a healthy glow. You could even splurge for a fancy, schmancy $38 tube at Sephora and still come out ahead.

A little travel is good for the soul. New research indicates it’s good for your mental health and can slow down the aging process.

Many people, however, splurge on trips they can’t afford. Going into credit card debt or depleting your bank account to fund your vacation is not relaxing.

Keeping fit is a worthy goal, but many people spring for gym memberships that they can’t afford. Basic memberships can’t start at $19 a month, which is cheaper than high-status facilities charging $200 a month. Also, health insurance offers many ways to get free access to a local health club.

The Oracle of Omaha, Warren Buffett, has said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

The same advice applies to durable and consumable goods. Buying a cheaper product upfront can cost you more money in the long run, especially if you’re stocking up on lower-quality goods for the cheap per-unit price.

“Spaving,” spending money to save, rarely works out. You’re more apt to lose storage space and go over your shopping budget.

Even billionaire Warren Buffett drives a modest car and believes brand-new automobiles are a waste of money. He prefers used vehicles to new ones.

According to Kelley Blue Book, the value of most new vehicles drops 20% in the first year.

Everyone has overspent on some of these categories before, regardless of the size of their bank account. But for those who are regularly broke, many of these purchases may be holding you back and preventing you from building lasting financial stability.

A good start is to use free budgeting apps, pick up a side gig, or delete your social accounts (to eliminate #FOMO spending).