Have you ever bought something that you totally regret? In a recent article I talked about 5 ways we make terrible financial mistakes, and when it really comes down to it we all have made bad financial decisions. Some big some small but the most important part is that I’ve learned something from those mistakes.
So in this article I thought I’d take things a step further and cover some of the things you should never buy simply because they are not worth the money. Some of the things I’m about to mention are things that have happen to me while other have not but I’ve found from my research to be a total waste of greenbacks.
So let’s get started…
Timeshares
First off, yes you guessed it Timeshares. If their isn’t something I’ve wasted more money on it’s timeshares. These things can cost you thousands of dollars to buy and the resale value of them is literally nothing. In fact I have close family members who have paid upwards of $20,000 for these things and I always keep wondering how they are going to sell them because the buyers just are not there.
To boot these things are loaded with fees from your typical maintenance fees to fees to switch to a different week at a different resort. Finally, one of the other big downsides to timeshares is that they aren’t everywhere. For example if you want to stay in somewhere more off the beaten path you probably won’t find anything.
Instead I recommend saving your money and planning your vacations one year at a time. It cheaper and their are more options.
Timeshare Resale Companies
Now if you are one of the unlucky people who did buy a timeshare another thing you don’t want to waste your precious dollars on is timeshare resale companies. These companies give you the promise that they can help you get your timeshare sold, by listing it on their website, but don’t do it.
In fact, almost every one of these resale companies claims they can sell your timeshare and get you out from under it but the truth is none of these companies are interest in helping you sell your timeshare but rather collecting the huge upfront fees they charge. I know this because I’ve invested my hard earned dollars with two of these so called companies and ended up losing $1100 because of it.
Lottery Tickets
Today the lottery has become some big money, with $100 million jackpots and all kinds of crazy scratch off cards people are spending some huge bucks all to take a gamble and hopefully win big.
The truth is all state lottery programs are set up for them to win and you to lose. In fact I often refer to the lottery as a tax for the mathematically impaired. Now to don’t get me wrong I like to spend $5 on lotto ticket when I know the stakes are high and possible win that $500 million jackpot, but on the other hand spending $50 to a hundred bucks a week on scratch offs and other forms of gambling is a total waste.
Instead save your money and if you have buy the occasional ticket that’s fine but don’t do it to with the thought you could make living off of it because more than likely you won’t do nothing more than break even.
Extended Warranties
Another thing that isn’t worth the money is extended warranties. If you’ve ever bought a car you may have been ask to buy one of these but the truth is they are not worth it. Typical extend warranties can carry some tough restrictions and what you thought was a good deal to lower risk on buying something expensive is a total waste.
People get duped into buying these things each and every year and many never claim on them because of specific requirements or time frame restrictions they have. Instead stick with your typical vehicle warranty when you buy your car and save the rest.
Leasing Vehicles
Leasing Vehicles can also be a bad buy. A vehicle lease is where a dealership allows you to buy a car through them. However, during the lease period the dealership owns the vehicle, and will carry certain restriction during the lease period. Typically most least leases last 3 years and only allow you to put on anywhere from 10,000 to 20,000 miles per year.
The problem with them is that the restrictions can be be pretty tough. If you happen to go over the milage they could be charged you for every mile you go over. On top of that vehicles with lower resale values tend to cost more to lease. When it comes down to it car loans or buying a vehicle in cash can be the most cost effective route to go.
Buying A New Car
Ever had the thought of buying a new car or truck. Well you may want to rethink this option before you do. New cars will lose an insane amount of value, in fact according Edmunds.com a car worth nearly $30,000 will lose just over $2500 the first minute you drive it off the lot.
A year later that same vehicle will lose another $5600 in value and after five years your new car will lose somewhere around $18,000. That’s a lot of money wasted which could have literally bought you a good used vehicle. So the next time you are looking for a new vehicle make sure you compare new and use car prices because you may be able to get the same vehicle just a few years older at two thirds to half the cost.
LAN Line
Seventh, on the list is telephone LAN lines. With the onset of smart phones and other mobile devices it’s becoming clear that your typical telephone line is becoming more and more useless. In fact I know people who haven’t had one in nearly 7 years.
When you think about it how many times do you really use it? In my house I still have mine yet but I’ve still to convince my wife that it isn’t worth the money. I think the only reason we still have one is out of necessity. We’ve had one for so long that we feel we couldn’t forgo it. However at some point we will eventually get rid of it but it will just take a little more time and convincing.
Name Brand Clothes
Next on the list is name brand clothes. I can’t tell you how many times I’ve seen people wearing high dollar clothes but yet can’t afford to pay their bills. I think great clothes is fine but you don’t have to pay top dollar for it.
This is where my wife and I typically get creative. We tend to hit a lot of garage sales in the spring time, get hand me downs, and even go to a few thrift stores and what’s amazing about these places we will find a lot of great clothes for our kids that is barely used and in some cases still has the tags on them yet.
When it comes down to it paying $80 for a pair of jeans isn’t worth. Instead start looking for the deals.
Smoking
Finally, one of the biggest waste of money these days is smoking. Now I know not everyone is going to agree with me here, so if you are a smoker just hear me out. Smoking cost some big dollars these days.
I know one guy who can’t afford to buy health insurance for his family but at the same time him and his wife can smoke three packs of cigarettes a day. Altogether that’s $5460 a year that they roughly spend on smoking. Now don’t get me wrong I don’t want to turn this into a rant by any means but if smoking is more important to you than your kids well being then you have some mixed up priorities.
On the same end you also have to consider health care cost. The fact is health care cost are going up and this is also driving up insurance cost as well. Smoking does cost some major health issues such as lung cancer and heart disease but more than that it also causes you to just get sick easier resulting in more lost days at work.
Instead if you really want to provide for your family just stop smoking, you’ll save more money in the bank and have less headaches down the road.
So is their anything else you would like to add to list? Feel free to share your thoughts and comments below.
I completely disagree with leasing vehicles. Leasing is the equivalent of rent for tax purposes in my jurisdiction. Thus, it qualifies 100% as a business deduction. The money the deductions saved me in taxes far exceeded the cost of the loan. Additionally, letting me keep my capital invested earned more than the “savings” I would have had by not having to pay finance charges. (Financed cars with a loan, or cash purchased cars can only have depreciation claimed for tax purposes)
Generally speaking dealerships do NOT offer lease financing. Most car companies have their own credit division for this sort of thing. And while yes, the “minimum” payment deals they offer do have limited mileage, you can easily by more (increasing your monthly payment… but increasing your tax advantage). And yes, there may be a differential between the contract residual buyout price vs the current re-sale value of the car. But that is to your advantage. If it’s MORE, then you can buy it out at the contract price, then sell it privately and keep the profit. Otherwise you can walk away and either lease something else, or “walk away” but then buy it back from the dealership at the more-reasonable market price. If you do buy extra mileage then more often then not, your contract price will be much less than the actual re-sale value of the car.
If you are self-employed (in my jurisdiction) and need more business deductions, you’re throwing money away (in taxes) if you buyout your car (provided of course you use it for business).
From a simple-math perspective, YES it does cost more to lease a car… But the benefits of the tax advantages as well as keeping money invested FAR FAR outweigh the extra cost.
I don’t know a lot about timeshares but I have to assume that they’re a terribly value. I always see people reselling them on craigslist!
I don’t get why anyone buys a timeshare. Never seems like a good value.
I agree extended warranties are just a waste of money. They only thing that they provide is a false sense of protection. I every time I have purchased one they have ended up not being used. The Items that they cover like big ticket repairs can be covered within the normal warranty if you take good care of your vehicle.
That’s a good point, leasing could probably give a better tax deduction because you would be able to write off the full amount for being a business owner but if you are not then you won’t have the deduction. I’ve personally never leased a vehicle but from all my research and talking to friends of mine who have done it said they would never do it again.
Now I could be totally wrong and that’s fine if you want to know if leasing is a good option check it out and do your own research. I took a chance on timeshares and got burned so it obviously pays to do your research. Thanks for sharing your thoughts.
You’re right about that Holly, timeshare carry hardly any value. I bought my timeshare for $4500 and was only able to get $400 out of it when I sold it and I was lucky to get that much. The problem with selling them is that it’s not like selling a house. When you sell a house you can show them the house and all the little details but when you sell a timeshare all you can say is where it’s located, what it has, and what it’s worth.
I agree Michelle, but I’ll tell you timeshare reps will make them sound when you talk to them but don’t believe them because they are total sharks looking for the kill.
You’re exactly right Gary, extended warranties tend to make people feel more comfortable so they will make a purchase under a false belief if things go wrong it’ll be alright. Thanks for your input Gary.
Totally agree on many of these points, Chris. We never buy extended warranties anymore. And I watch many family members drop several hundred dollars a month on smoking. 🙁
I don’t think I’ve ever bought an extended warranty but I’ve had a lot of people try to talk me into them. As for the smoking I work with a lot of people who do smoke and I’ve told them over and over that you’d save a ton of money if you would quit and none of them ever do. Thanks for sharing you thoughts Laurie.