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.
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Cigarettes
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
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.
DoorDash
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.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Streaming services
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.
The latest iPhone
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.
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Car upgrades
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.
Daily Starbucks run
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.
Cosmetic procedures and products
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.
Vacations
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.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Fitness memberships
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.
Quantity over quality
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.
New cars
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.
Bottom line
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).
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