If you really want to stay poor, here's how to do it.

How to Waste Money

by Rick Kahler

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Be frugal. Live on less than you make. Save for the future. It's my message, and I'm sticking to it.

Just in case you're getting tired of that message, though, let's take a look at thrift from a slightly different perspective. For anyone who wants to throw cash around, here are some effective ways to waste your money:

How to Waste Money on Travel:

  • Buy package vacation deals.

  • Buy a vacation home.

  • Get an RV and only use it one or two weeks a year.

  • Buy a timeshare unit.

  • Pay for hotel internet packages.

  • Eat at hotel restaurants.

  • Use room service.

  • Over-pack and pay checked baggage fees.

  • Don't bother to use a travel credit card that gives you frequent flyer credits.

  • Stay at full-service hotels with amenities you don't use.

How to Waste Money on Big-Ticket Items:

  • Buy hybrid cars.

  • Pay for extended warranties.

  • Buy cars new instead of used.

  • Fail to compare prices and check product reviews.

  • Pay full price for furniture.

How to Waste Money on Insurance:

  • Get a cancer or accidental death policy.

  • Buy credit life insurance.

  • Buy variable universal life insurance.

  • Have life insurance if you don't need it.

  • Keep your deductibles low.

  • Purchase the cruise line's trip insurance.

  • Purchase car rental insurance.

How to Waste Money on Investing:

  • Don't take advantage of a retirement plan with employer matching that doubles your money.

  • Invest outside of a retirement plan instead of fully funding the plan first.

  • Buy variable and fixed annuities that charge you big commissions and high fees.

  • Buy load mutual funds and trade them often.

  • Cash in your 401(k) when you leave your job instead of rolling it to an IRA.

  • Cash in your IRA when money gets tight.

How to Waste Money on Health and Fitness:

  • Buy home fitness equipment and use it to hang clothes on.

  • Pay for a fitness center membership but rarely or never use it.

  • Be a sucker for the latest "cure-all de jour" supplement or multi-level marketing product.

  • Pay more for specialized brand-name vitamins even though store brands are just as good.

  • Buy junk food instead of stuff that's good for you.

  • Skip those regular visits to the doctor and the dentist.

How to Waste Money with Your Everyday Habits:

  • Drive across town to save two or three cents on gas.

  • Buy grocery name brands instead of cheaper store brands.

  • Pay full retail price for clothes, furnishings, or other items instead of waiting for sales.

  • Buy bottled water.

  • Disregard ATM fees.

  • Pay hefty overdraft fees because you don't bother to keep track of your bank balance.

  • Forget to change your furnace filter.

  • Don't bother to maintain your car or house.

  • Be disorganized about taking care of bills on time, so you pay late fees.

  • Pay for premium cable TV packages with channels you rarely watch.

  • If you can't afford something now, pull out the plastic. When you don't pay a credit card bill in full at the end of the month, high interest rates can quickly double or triple the price of anything you buy.

  • Gamble. Online gambling, slot machines, gaming tables, and lottery tickets are all good ways to get rid of extra cash.

  • Speed. This is a three-for-one deal. You'll use extra gas, pay $100 or more for a speeding ticket, and end up with higher car insurance premiums.

Even practicing a few of these overspending habits will give you more financial stress and less financial security. Just observing half of them will give you an interesting life full of financial chaos. Follow more than half and you, too, can qualify as a first-class money waster.

Rick Kahler

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at KahlerFinancial.com. Contact him at Rick@KahlerFinancial.com or 343-1400, ext. 111.

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