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We’ve all spent money and regretted it. Many of us have spent money and ended up wondering what on earth we were thinking. But what’s the #1 worst thing to spend money on, not just for us but overall?

We wanted to look at some professional opinions on expenses that just don’t make sense. We asked a panel of finance experts and businesspeople what they think is the #1 worst thing to spend money on.

Some of the answers were similar, as you might guess. These were some of the most common.

  • 5 panelists cited interest, especially credit card interest, as the #1 worst thing to spend money on.
  • 3 panelists said new cars were the #1 worst place to spend money, citing the rapid depreciation of new vehicles.

We haven’t listed all the duplicates, because some of them said almost exactly the same things, but here’s a spectrum of the worst ways to spend money!

We Asked Regular Folks Too

It’s great to have the views of finance professionals and experienced business people, but it’s also great to ask ordinary folks for their opinions and experiences.

To fill in the other side of the picture, we asked our readers what the stupidest thing they ever spent money on was. We’ll put those answers after the professionals, for fun and to get a look at the contrasts!

See what our readers had to say 👇

What’s the #1 Worst Thing To Spend Money On?

Here’s what our panel of finance experts and businesspeople had to say on this matter.

Brendan Dooley
President & Founder
Meaningful Wealth Management

Interest

The worst thing you can spend money on is a purchase you’ve already made! Of course, we’re talking about interest. Don’t keep paying for your purchase after you’ve bought it.

For example, if you make $100 monthly payments on your $3,000 credit card bill that charges 14.99% APR, it will take you 38 months to pay it off and you’ll have paid $730 in interest. That’s almost 25% more than the original $3,000 you borrowed. Said differently, using your credit card increased the price tag of what you bought by almost 25%.

You can avoid this by prioritizing a budget and making it easy for yourself to stick to it. Delete apps from your phone if they lead you to mindless shopping. Make a list before you go to the store and only buy what you wrote down.

Unsubscribe from retailers that send you coupons via e-mail. All of this becomes easier after you automate your savings. This way, you can only spend what’s left and after you pay your essential expenses, there may not be much room for frivolous spending.

Brendan Dooley owns Meaningful Wealth Management LLC, a boutique financial planning firm in Philadelphia, PA. He is a Certified Financial Planner™ professional, and he primarily serves Millennial and Gen X households with multi-six-figure incomes.

Hirsch Serman
Founder
Lifecycle Financial

Impulse and Emotional Purchases

The absolute worst things to spend money on are your emotions and stress. Everyone has heard of emotional eaters. There are also emotional spenders. This can be seen in various forms – impulse purchases, feel-good purchases, make me feel important purchases, and make me feel whole purchasers. All of these are temporary solutions. Throughout life, we experience stress and emotions which trigger spending that we ultimately regret.

This can also become very expensive and can happen in good times (child going to college or getting married), as well as challenging times (divorce or loss of a loved one). I caution every client to be careful of their emotions, especially those going through a divorce as emotions and stress can easily become the most expensive part of the divorce.

The worst emotional spend I have seen was $86,000 to “prove a point”. That is a very expensive point to prove!

Hirsch Serman is an MBA and CPA, with over 20 years of finance, seniors, and divorce services. He also has relocation services, consulting, and operations expertise. Hirsch is focusing on building financial wellness and optimizing outcomes with clients. His depth of knowledge and infectious humor engages colleagues and clients to work collaboratively to create the best outcomes possible.

Rebecca Brooks
CEO, Finance and Success Coach
R&D Financial Coaching

Single-Use Items

Single-use items bring convenience, but they come with a hefty price tag. While going “zero waste” for the environment is a growing trend, doubters still say it’s too expensive and only for the affluent. But when you look at the impact reducing single-use items has over time, it helps you keep money in your wallet!

To understand what I mean you need to think long-term and assess the cost per use of the items you buy. Take bottled water for example. One bottle of water costs about $1.29, if you use one a day for a month that’s $38.70 and you effectively added 30 single-use water bottles to the landfill. However, if you invest in and use a reusable water bottle you might spend $20-$50 one time and have it for life. Over time bringing the cost per use to pennies.

Not a bottled water drinker? What about your morning coffee? Using a French Press for your coffee – with no need for filters, etc. these are more cost-effective and a multi-use way to have your morning cup of joe. The price per coffee goes down with every cup of coffee you enjoy. These swaps can be found throughout your home and office to make you a better steward of your money and the planet.

Rebecca Brooks is co-owner, with her husband, of R&D Financial Coaching.

Roslyn Lash
Accredited Financial Counselor
Money Elevation Coach

New Cars

Buying a new car is the worst use of your money. Yes, they are beautiful, and you can arrive at your destination in style. But, let’s look at it in black & white… the hardcore numbers.

While the attention-getting vehicle may be stunning to look at, it’s also stunning to the wallet. Cars lose approximately 20% of their value after the first year, and up to 60% of their value in the first 5 years. For example, if you buy a $40,000 car, within 12 months the car will be worth around $32,000. Therefore, if you bought a used one-year-old car, you could save $8,000. If you postponed your purchase for 3 years, you would save even more money!

The majority of potential homebuyers that I’ve encountered are denied a mortgage solely due to their DTI (debt-to-income ratio). Without the higher monthly payment of their new car, they could easily qualify to become homeowners. Owning a new car interferes with achieving the American Dream.

Roslyn Lash, the Money Elevation Coach, is an Accredited Financial CounselorⓇ, Real Estate Broker & Investor, and the author of The 7 Fruits of Budgeting. She paid off a $36,000 debt in 3 years. She works virtually with single women, helping them gain clarity around their finances, reduce debt, and increase their net worth to live a more abundant life. Her advice has been featured in national publications such as USA Today, Forbes, TIME, Huffington Post, Los Angeles Times, and a host of other media outlets.

Kenny Senour
Financial Planner
Millennial Wealth Management

Interest on Credit Card Debt

Interest payments on outstanding credit card debt are one of the worst things you can spend your money on. The only thing that benefits from paying interest is the credit card company. The opportunity cost to you is that money is not being spent to directly benefit you in any way nor is it going towards savings or investments.

Interest rates on outstanding credit card balances tend to be much higher compared to other forms of debt like a home mortgage or federal student loans. Avoid paying interest on credit cards by paying your balance on time each month or minimizing your use of credit cards in general.

Do not leave an outstanding balance on your credit card or you run the risk of making these interest payments which benefits you in no way and is one of the worst ways to spend your money. On top of this, having an outstanding balance on your credit card does not benefit your credit score in any way!

Kenny Senour is a Certified Financial Planner™ professional with Millennial Wealth Management, a fee-only registered investment advisor in Colorado serving clients of the millennial generation in the Denver and Boulder area, as well as other states virtually. As a millennial himself, Kenny understands the financial choices this generation is faced with, from navigating employee retirement plan options, tackling student loan debt, or deciding when to start saving for their young child’s college fund.

Roy Ferman
Founder and CEO
Seek Capital

Late Fees

There are a lot of things we spend far too much money on. Gas, coffee, rent, you name it, we usually overpay for it. However, there is one thing we as a society pay too much for, and it’s something we can avoid. I’m talking, of course, about late fees.

Late fees are a scourge on our wallets and on society. Making late payments can come back to bite us. Late fees can add up, but we can avoid them by simply making all payments on time. Missing a payment here or there may not seem like a big deal, but if it becomes a habit, it can derail all of your plans.

Making sure you sign up for automatic payments and changing payment deadlines to fit your financial needs are surefire ways to make sure late fees don’t keep costing you.

Roy Ferman has led Seek Capital from incubation to the market leader in startup business funding, having funded in excess of $400 million to startup business owners. Prior to founding Seek Capital, he was the CEO of Breakthrough Ads, a digital ad agency specializing in SMB focused verticals. He has worked with SMB financing since 2010 and continues to expand the offerings of Seek Capital.

Omer Reiner
Realtor & President
FL Cash Home Buyers

Rent

This may sound like a finance cliche but the worst thing that you can spend money on is your rent. Most people accept rent as a necessary expense but that’s far from the truth. Instead, you should focus on buying a property yourself and spending money each month towards paying it down. By doing this, you’ll actually be improving your net worth each month through home equity instead of wasting it on rent payments.

Depending on your income and location, this strategy may not be feasible for everyone. However, if you’re able to make it work then you’ll be shocked at the amount of money you save in rent payments over the course of a few years.

Omer Reiner is a licensed Realtor & president of FL Cash Home Buyers, LLC, a real estate investment company based in Ft. Lauderdale. He has been buying & selling properties in FL since 2011.

Rowena Murakami
Co-Founder and Master Chef
Tiny Kitchen Divas

Trying to Impress Others

The worst thing you can spend money on is for anything to impress others.

Wanting to look rich by buying a designer $1000 wallet, and then struggling to put anything in that wallet afterward. Throwing expensive parties for people you do not like. Buying another car simply because your colleagues bought new ones after you all got bonuses.

Spending money for appearances is such a waste. Instead, do your research and find the best way for that money to grow.

Rowena Murakami is Co-Founder and Master Chef of Tiny Kitchen Divas Blog.

Allyson Dennen
MC, AFC ®, Owner/Counselor
Fab Life Now

Eating Out Too Often

The #1 worst thing to spend money on is eating out too often. Eating out has always been an area of overspending for American households. With rising prices in the food and services industry due to the pandemic, it is an even more costly problem.

With the rising costs of food, increased hourly wages in many states, and increases in wages to get people back to work, the restaurants pass the costs along to consumers. According to the Bureau of Labor and Statistics, limited-service meals (think Chipotle and McDonalds) are up 6.1%, and full-service meals (sit-down restaurants) are up 4.1%. That can sure put a significant dent in the pocketbook of a typical family, leaving less for paying down the debt accrued and less for saving and growing wealth.

The best way to combat this area of overspending is to be more diligent with meal planning and set strict spending limits and get the entire family on board for sticking to them.

There are also ways to stretch your eating out dollars. Find restaurants that offer Kid’s Eat Free nights or deals for early-bird eaters, and even having the whole family sit in the bar area (in a family-friendly restaurant) to take advantage of discounted options during Happy Hour can save money.

Allyson Dennen is an Accredited Financial Counselor (AFC ®). She teaches women what they need to know to rebuild their finances after divorce or any other life transition. She counsels and coaches women to find their financial confidence by teaching simple financial strategies for success through her programs at www.fablifenow.com.

Mary Elizabeth
Founder
MeMoreMoney

Unnecessary Debt

Debt is the #1 worst thing to spend money on because it’s spent, and not invested or saved for a later time. Debt locks up your money in loans that you have to pay back with interest rates fixed from highest loan rates to lowest loan rates and even gets compounded. In my experience, it also causes you to feel under pressure and trapped in your decision-making, because some of your wages are already spoken for.

What’s worse, is if you don’t have a good credit score which can make getting new loans difficult and costly due to higher interest rates paired with the more stringent underwriting criteria. Often the debt especially credit cards is spent on depreciating assets which means you are paying more for something that is losing money. If you absolutely need to take out credit make sure it’s essential i.e purchase a home.

Mary Elizabeth is the founder of MeMoreMoney. A self-taught finance nerd, passionate about helping others reach their financial goals. They bought their first house at 21, paid off student debt, and save 100k by 30. Featured Personal Finance Expert in GO Banking Rates and Yahoo! Finance.

Erin Zadoorian
CEO, Executive Editor
Ministry of Hemp

Fashion and Designer Clothes

If ever there was a complete ruse, this is it. Billions of people all over the world have been brainwashed into believing that brand names equal higher quality and a higher “cool factor.” While this may be true in some cases, it is not the case in most.

Much of the world is unhappy unless they have an item made by their favorite designer, whether it is sunglasses, watches, hats, handbags, pants, jackets, shoes, or any other material possession. The problem is that designers charge exorbitant prices for products that cost them about the same as Walmart to produce. The difference is that they assert that their name and the bare minimum of labor are worth hundreds, if not thousands, of dollars more.

Erin Zadoorian is CEO and Executive Editor at Ministry of Hemp, the leading advocate for hemp in the United States

Recreational Vehicles

One of the worst big-ticket items from a financial perspective is any kind of recreational vehicle: boats, jet skis, motorcycles, ATVs, etc.

In addition to their large up-front cost, these things require regular spending on maintenance, storage, insurance, and transportation, as well as access to land or water where they can be enjoyed. This is all before considering the fact that these vehicles depreciate rapidly in value and are some of the most frequent causes of accidents, which lead to medical bills, repair bills, etc.

Carter Seuthe is VP of Content at Credit Summit.

Jacob Villa
Co-Founder and Marketing Director
School Authority

In-Game Purchases

As a semi-recovering Candy Crush junkie, I understand how difficult it is to quit this habit. However, those $1 or $5 purchases pile up, and you’ll find yourself staring at your bank account with a sense of guilt and regret.

Remove your credit card information from any websites or applications where you play games, and if you’re truly stuck on a level, Google a how-to instruction. (Now that I’ve discovered some really powerful ones for Candy Crush, I feel incredibly stupid for purchasing those power-ups.)

Jacob Villa is the Co-Founder and Marketing Director of School Authority, a site dedicated to matching students with their ideal college in the United States based on factors such as career aspirations, lifestyle, and other personal preferences.

Michael Hamelburger
CEO
Sales Therapy

Newly Released Gadgets

Buying newly released gadgets for personal use is a money-wasting behavior.

Smartphones, for instance, depreciate at a value of between 35% to 80% within one year from the date of purchase and with a new version coming out in a matter of months for most brands, you’ll likely lose a lot of your investment in a replaceable device.

Michael Hamelburger has been the top-rated sales rep for 7 years in a row in multiple firms. Michael founded Sales Therapy to help business owners stop fearing sales calls and see them as the opportunity they really are.

Storage Units

Storage units are often seen as a necessity in today’s world, but most people have no idea how much money they’re wasting. The average storage unit prices range from $60 to $225 per month.

Sure there might be exceptions like being between homes or an emergency where your home was damaged beyond repair, but those cases are rare! Imagine investing that money rather than spending it on a storage unit; wouldn’t this investment provide more security?

Catherine Hall is a psychotherapist, Licensed Master Social Worker (LMSW), and contributor to psychologydegreeguide.org.

Ann Young
Co-Inventor & CEO
Fix The Photo

Gambling

Believe it or not, online gambling! Whenever people brag about how much money they won at the casinos, they generally never talk about how much money they lost subsequently. If anything, trust me, they probably lost a lot more than they won because that is just how casinos work. They wouldn’t be operating if they were facing more loss than the gambler.

I definitely believe it to be the #1 worst thing to spend, rather waste, money on, especially since your hard-earned money shouldn’t be bet off over odd luck.

Ann Young is a writer-photographer based in NY with 18 years of experience. Since graduating from New York University, she’s worked as a photographer and freelance retoucher. Ann teaches beginning retouchers how to use Adobe software for photo and video post-production.

Here’s What You Had to Say

We asked you, our readers, “what is the dumbest thing you ever spent money on?”
154 people from countries all over the world responded. What did they say?

Word cloud showing the most common words used in your answers.
  • The #1 answer category, cited by people from Russia, Trinidad and Tobago, Thailand, the US, Zimbabwe, Fiji, Vietnam, Australia, Lesotho, and Pakistan, involved prostitutes, strippers, porn, and a term for the female anatomy that we’d rather not use.
  • Coming in close behind, with responses from the US (multiple), Poland, India, Costa Rica, Belize, and Zambia, were marriage, wives, and girlfriends.
  • Respondents from New Zealand, Philippines, Romania, Jamaica, Pakistan and Sri Lanka cited fraud, scams, and online purchases that turned out to be fake, deceptive, or defective.
  • Answers from South Africa, Ecuador, Zimbabwe, Spain, Dominican Republic, Philippines, Honduras, Fiji, and Kenya cited alcohol, drinks, and clubbing.

After those popular selections (wise up, guys), there were few patterns but several notable responses.

  • Drugs
  • Bad internet connections
  • Expensive haircuts
  • Chanel
  • Dogecoin
  • Expensive laptop
  • Botox
  • “Excessive entertainment” (we’re curious)
  • “It hurts to talk about it” (we’re doubly curious)

We hesitate to draw conclusions from this, but here are a few tentative ones.

  • Marriage counseling is probably a growth business.
  • It’s good to think before you spend.
  • We should all learn to budget effectively.

So what is the dumbest thing YOU ever spent money on? Let us know in the comments!