22 Things Broke People Waste Money On

In this episode of the Personal Finance Podcast, we are going to talk about  22 things broke people waste money on. Watch this episode on Youtube. How Andrew Can Help You: Listen to The Business Show here. Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining Index Fund Pro! This is Andrew’s course teaching you how to invest! Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok. Learn how to get out of Debt by joining our Free Course Leave Feedback or Episode Requests here. Car buying Calculator here Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Go to https://joindeleteme.com/PFP20/ for 20% off! DELL: Get a new Dell AI PC starting at $749.99, at Dell.com/ai-pc. This episode is sponsored by Plaud https://www.plaud.ai/ — an AI wearable gadget that takes notes of meetings and calls. With Plaud, you don’t have to take notes and make summaries anymore. Shop outdoor furniture, grills, lawn games, and WAY more for WAY less. Head to wayfair.com Function is offering 160+ lab tests for $365 to anyone who signs up. To get started, visit www.functionhealth.com/PERSONALFINANCE Get 50% Off Monarch Money, the all-in-one financial tool at www.monarchmoney.com/PFP Links Mentioned in This Episode: The 1-3-6 Method For Building & Managing Your Emergency Fund 11 Car Buying Mistakes you Need to Avoid! (Don't Make These Mistakes!) Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Free Guides: The Stairway to Wealth: The Order of Operations for your Money How to Negotiate Your Salary The 75 Day Money Challenge Get out Of Debt Fast Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

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• 0:00Andrew Giancola?

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• 0:44Andrew Giancola?

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• 1:27Andrew Giancola?

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• 2:25Andrew Giancola?

  What's up everybody and welcome to the personal finance podcast. I'm your host Andrew, founder of mastermoney.co and today on the personal finance podcast, we're going to dive into 22 things that broke people waste money on. If you guys have any questions, make sure you join the master money newsletter by going to mastermoney.co/newsletter and follow us on Spotify, Apple Podcasts, YouTube, or whatever your favorite podcast player is. And if you're getting value out of this show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or give us the old subscribe and thumbs up on YouTube. Now today, we're going to be diving into

• 3:06Andrew Giancola?

  22 things broke people waste money on. And the reason why we're going through this is I want you to make sure that you are avoiding most of these at all costs. Someone who is prudent with their money, or someone who is quote, "good with money," is going to avoid these as much as possible. Why? Because it's some of the small leaks can really sink an entire boat if you have way too many of them. Now, I am a person who does not want you to focus on the small stuff. If you want to have a coffee every single day and you want to go out and order at Starbucks, hey, more power to you. But if you are someone out there who has a bunch of small leaks all over the place, that can result in thousands and thousands and thousands of dollars that could cause you issues. And so what we're going to talk through today is I'm going to try to motivate you to kind

• 3:47Andrew Giancola?

  of think through your finances in ways that is a little bit different than everybody else. Some of these things are just accepted in society that this is what's going to happen. This is what you're going to spend your money on. But I'm going to show you what wealthy people actually do and some of the things that wealthy people will avoid. And so that is the entire premise of this episode, and we're going to be diving into the 22 things broke people waste money on now.

• 4:10Andrew Giancola?

  Alright, so the first one is unused gym memberships. Now, this is one of those things that I have seen way too many people waste money on, where they will, A, maybe join in January, but they quit going by March, but they continue to have the gym membership because maybe they're gonna go back at some point in time. A lot of us have good intentions that we will be going back to the gym at some point in time, and so they continue paying that gym membership month over month over month. If you are not going to the gym at least once every single week, and you haven't done so over the course of the last couple of weeks, then you probably need to get rid of that gym membership. Why? Because, A, obviously gym memberships are just gonna continue to auto-renew over time, but the average cost for a gym membership in the US currently, right now, is $60.

• 4:52Andrew Giancola?

  That is $720 per year that is completely wasted. Now, if you look at the compound interest of $720 every single year, if you invested those dollars instead, that'd be $118,000 over the course of 30 years. That is a huge, huge deal for some people. That could change your retirement and give you that extra boost that you actually need. And so, what happens with a lot of gym memberships is it's a psychology thing. Guilt stops people from canceling. They think, "Okay, I need to have this membership in place because I may go back." Well, if that's you, I would encourage you honestly to take that $720 per year and start to build out a home gym, if you have the space, where you can have equipment in your house that you can utilize whenever you want. I built a home gym in my garage, and it's been the best dollars I have ever spent.

• 5:36Andrew Giancola?

  I spent thousands of dollars on it, but it brings me so much value. I use it literally every single day, and it is one of the best things that I have ever done. No more driving over to the gym and wasting time commuting back and forth to the gym. Instead, I've got it in my house. So, I encourage most of you, either do the CIA method, so cut out that expense, identify where you want those dollars to go, and then automate that money towards something. Say, for example, you want to automate it towards your home gym. If you wanted to do that, I would make a high-yield savings account and start putting money towards that home gym, or start buying equipment used on Facebook Marketplace as you see it. That way, you can start to build out a home gym that actually works for you. So, this is something I would definitely consider. Also, you can also do something like paying for classes. So, maybe you pay per Instead of having that gym membership in place.

• 6:21Andrew Giancola?

  That way, each time you go, you're paying per class. You may be paying more per class, but at the same time, it is going to reduce the amount that you're spending. Now, a lot of you out there, if you have a CrossFit membership, or a Pilates membership, or a yoga membership, those are going to be $200 plus dollars every single month. And so making sure you utilize those can be a big one. Number two is along the same lines, but this is going to be one that a lot of people do is forgotten and unused subscriptions. This is the low hanging fruit. This is easy pickings for a lot of you. I personally have forgotten or unused subscriptions right now at the time of recording this. Most of you probably do as well. And so I, after this episode, I've already got something scheduled in my calendar. I'm going to go through those unused subscriptions. I'm going to start cutting them out. Business owners, you probably also have a bunch of

• 7:06Andrew Giancola?

  unused subscriptions that you need to start cutting out. It may feel like, ah, it's not much. It's 30 bucks a month. That 30 bucks a month could be going into your pocket instead. And so if you are someone out there who is wasting money, you need to make sure that we are cutting out unused subscriptions. This is going to be, again, we'll use the CIA method when we do this, but the average person in the US right now, according to CNR research, is wasting $133 per month on unused subscriptions. So if you took that $133 every single month, and you compounded that at a 10% rate of return over the course of 30 years, that is an additional $274,000 that you would have in your retirement accounts if you took those dollars and shifted them over. Now, let me tell you something right now. Okay, if you have the gym membership and you have

• 7:49Andrew Giancola?

  those unused subscriptions, those two things alone would allow you to have well over $300,000 in retirement over the course of the next 30 years. It's a huge difference in just cutting out the waste. If you can cut out the waste in your life, the stuff that you're not using, the stuff that does not bring you value, you can have so much more money. In fact, this could be a, it is a six figure decision. This could be a multimillion dollar decision if you actually make this impact. And so most households, according to research, have four plus streaming services that are just letting go, they're spending over $133 per month on unused and forgotten subscriptions. So maybe this is something you signed up for a free trial, and then once the free trial was over, you forgot to cancel. Or maybe Maybe you have duplicate streaming or music apps. And I've seen that happen a number of different times.

• 8:34Andrew Giancola?

  Maybe some of these small changes just kind of slip under the radar. So what you want to do is you want to use either apps out there that can help you track some of your subscriptions. Or you can just print off your bank statements, dive in there and just highlight the ones that you think you're not using anymore. Then what I want you to do is use the CIA method. Meaning you cut out the subscriptions you don't use anymore. You identify where that money is going to go because if you leave that money in checking, guess what's going to happen? It's going to get commingled in checking and you're just going to spend those dollars every single month. So instead, I want you to identify where you want those to go. Do you want it to pay down your mortgage faster? Do you want to save that money in your emergency fund? Do you want those dollars to go towards your investments? Wherever you want those dollars to go, then I want you to identify that and then automate it into that specific location.

• 9:17Andrew Giancola?

  Otherwise, again, the money is just going to get stuck in checking and you're going to spend it all. And so that is the second one is looking for unused subscription. Number three is Lotto tickets. The average American, this is shocking to me, spend $70 to $100 per month on Lotto tickets. Now, obviously, there's going to be outliers in an average where some people are spending way more. And some of you probably don't spend any dollars on Lotto tickets. Now, the odds of winning the Mega Millions jackpot is one in 302 million. Now, let me say this about lottery tickets, okay? If you are someone who just likes to buy the Powerball when it gets to $500 million or $1 billion as it has been doing over the course of the last couple of years. And you just like to have that fun and you like to hope, you like spending whatever it is, five bucks.

• 10:01Andrew Giancola?

  I don't know what a Powerball ticket costs. Obviously, I don't play the lottery, but if you go out there and you want to spend, you know, your money on one Powerball ticket. You're not buying 500 Powerball tickets, but you're buying one just for fun, just to have the hope because you enjoy that. There's nothing wrong with that whatsoever. But if you are the type of person that you are living on this hope and you're going to the gas station every single Friday when you get paid or every other Friday on payday. And you're buying a bunch of different Lotto tickets to try to hit, or you're buying scratch offs constantly. Or you find yourself just constantly playing the lottery, just trying to hit it big one time. Then you have yourself something that is going to drain your wallet. If you would have taken those dollars and invested those dollars instead. It would have a massive impact on your financial future. But there are a lot of people out there. If you took $70 to $100 every single month,

• 10:47Andrew Giancola?

  it is going to have a huge, huge difference in how much you are going to have over time. In fact, if you put $100 per month into Lotto tickets, that's just $25 every single week. That is $206,000 that could be in your portfolio over the course of 30 years. And over the course of 40 years, that is $555,000. This, my friends, is a huge difference maker. You must avoid things like Lotto tickets that just have no odds for you to ever win. Now, again, you can treat it as entertainment. You can treat it as something that is just fun to do, but this is not for income. And the problem is, it is a weekly habit for low-income households because they're trying to figure out, okay, how do I get out of this situation? Because they don't know how to fix their finances. And so instead, they're going out and buying Lotto tickets. I do not want that to be you.

• 11:30Andrew Giancola?

  If you are someone who doesn't make a lot of money right now and you are trying to buy Lotto tickets just to hit it, again, stop it. If you have extra income for that, then put it towards investments. Start to try to help yourself, okay? The book of Proverbs in chapter 13, verse 11, says, "Wealth gained hastily will dwindle, but whoever gathers little by little will increase it." And that is such a powerful lesson in long-term investing and making sure that we understand that just small amounts of money over time can grow to very large amounts of money. Okay? Four, is some of your bad habits, specifically when it comes to cigarettes and vaping. Those of you who are smokers, smokers spend on average $2,292 per year on cigarettes. And vaping costs add up too. Now, the average smoker has declined. A lot of folks in the millennial generation, in the Gen Z generation, smoke a lot less cigarettes at least.

• 12:12Andrew Giancola?

  Now, vaping had been something that had started to rise, but they smoke less cigarettes. And so that is, A, you're damaging your health. B, you're damaging your wallet. The two things that most people do not want to damage is they're taking advantage of this by smoking cigarettes. A pack-a-day habit is $180 to $300 every single month. And so making sure that you remove this from your life is going to be one of the most important things. Do not smoke, do not vape. Number five, and this is one that most people who live paycheck to paycheck need to start avoiding, is these high-interest payday loans. Payday loans are a business that I would avoid at all costs. AMSCOT, all these other different payday loans that are out there, all these companies who are having this average APR of 39.1%.

• 12:56Andrew Giancola?

  Now, 12 million Americans use payday loans yearly. And 80% roll those over into new debt. So 12 million Americans actually are using payday loans. And over 8 million of them are rolling those over into new debt. If you have to use a payday loan, typically it is because you don't have the money on hand. So where do you think you're going to get the money afterwards? Instead, I would try to figure it out in a different way. Because fast cash becomes endless payments for a lot of people. And the psychology behind this is not something that is good. And so for a lot of these businesses, they are making the money on the interest. A 40% interest rate is going to be so incredibly difficult for you to pay off. It is going to cause damage to your credit score. It is going to cause financial stress on your family for a very long period of time.

• 13:41Andrew Giancola?

  So avoiding them at all costs is going to be your number one priority when it comes to figuring out how to pay the bills. Instead, focusing on your finances and focusing on ways to increase your income are going to be two big things that you need to make sure that you are doing. You've got to avoid that at all costs. Now, for those of you out there who is like, "Well, I always have to get a payday loan when something happens in my life. Maybe I go out and my car breaks down. Well, then I need a payday loan to make sure that I can actually fix my car so I can get back to work again." Guess what? Instead, we need to focus on building up something called an emergency fund. Now, if you've never heard of an emergency fund, we have entire episodes on that. But an emergency fund is a place where you save your cash for a rainy day. Your car breaks down, you have cash just there. Your house has an issue, you have cash just there to take care of it.

• 14:25Andrew Giancola?

  It is one of the most powerful and freeing things to have an emergency fund. And you've got to make sure that you build that up. See, if you keep borrowing money, the borrower is a slave to the lender. And so if you just keep borrowing money over and over and over again, you're just working to pay off that lender. You've got to make sure that instead, you're working for yourself and building wealth for your freedom. Because if you can break the chains of debt, if you can break those financial chains of debt, you will never have to worry about somebody else. Instead, all you've got to do is worry about yourself. Number six is late fees on bills. Now, probably most people listening to this podcast have forgotten To pay a bill at some point in time in their life. If you haven't, awesome, you are great with money. But Americans pay $12 billion a year in late fees.

• 15:07Andrew Giancola?

  $12 billion per year in late fees. And they forget due dates or they waste money on specific things. So one late payment can actually cut your credit score by 100 points, depending on what it is. And so how do you prevent this? How do you prevent late fees on bills? Setting up automations for bill pay. Okay, so when it comes to setting your money on autopilot, and we have a community coming out soon that is going to be talking through exactly how to do this step by step on setting up your bills on auto payments. But what we want you to do is we want you to A, take your checking account and connect it to your bill pay. So let's say, for example, your electric bill. If you're someone who's just like, I just keep forgetting to send in a check for my electric bill, or I keep forgetting to log in and pay that electric bill.

• 15:50Andrew Giancola?

  Okay, instead, what you need to do is set up automatic payments. I don't care if it's $2 more. Set up that automatic payments so that just automatically comes out of your checking account every single month. No more late fees. You don't have to worry about it. Do this with every single bill. Your cell phone bill. Do this with your cable bill. Every single bill needs to be set up on auto pay. Okay, now, if you're saying to yourself, well, when I get paid, I am worried that my auto pay is going to cause me to not have enough money in my account. Here's what you do is you can set up payments for each and every single bill on specific days. So you can time it on days that land when you get paid. So if you get paid biweekly, and maybe those dates are changing, but if you get paid biweekly, maybe you want to do it early in the month, or you want to do it later in the month, or in the middle of the month.

• 16:36Andrew Giancola?

  You can set it up and break it up into days. So every two weeks, you can break up, okay, these bills are going to get paid these two weeks. Two weeks later, the next bills are going to get paid. All you do is call up each carrier and say, hey, I want to adjust my billing date. How do I do that? Sometimes they'll make you make the payment for the remainder of where you are currently, and then you can adjust those billing dates based on that. But if you are worried about not having enough cash on hand in your checking account, just adjust the days that you make that payment, and then you can move on from there. Now, some of the utility companies may not let you do this. If they don't, then I would adjust the rest of my bills around. Some of the payments that won't let you make those adjustments. And then always, always have a small cushion in your checking account for this. Because when you're making automatic payments, you just want to make sure you have a small cushion in your checking account. So you don't have to worry about that. If the power bill is a little bit higher this month,

• 17:21Andrew Giancola?

  you have that cash on hand, so you don't have to worry about that. Because this is what the checking account is for, is it's there to help you funnel through auto pay. Secondarily, if you are someone who is good with credit cards, you've never been in credit card debt in the past, using your credit card for things like your cell phone bill, or using your credit card for your cable bill, or using your credit card for some of those things that allow you to pay them with a credit card, it's going to be really beneficial for you. Because then you can automate your credit card payment as well, and make sure that everything is set up on auto pay. All bills always, if you want to be good with money, should be set up on auto pay. And you should be tracking what is happening with those bills. You should know the due dates of those bills. And then you won't have to ever worry about that stuff ever again. Number seven is overdraft fees. So overdraft fees are something, again,

• 18:05Andrew Giancola?

  that banks collect $7.7 billion in overdraft fees over the course of the last year alone. The average overdraft fee is $35. And multiple fees a month are going to add up fast if you are not tracking this properly. You should never, ever, ever pay overdraft fees. In fact, if you find yourself paying a lot in overdraft fees, one, you are obviously mismanaging money, and maybe you don't have enough income to survive currently. So we need to look at increasing our income. But two, look at switching to a bank that doesn't charge these overdraft fees. Maybe they have overdraft protection. And maybe they have something in place that will allow you to not have to pay these fees. Because, for example, if you're paying for overdraft fees per month at $35, you are paying $140 every single month. That is a large amount of money.

• 18:49Andrew Giancola?

  In fact, $140 over the course of 30 to 40 years is going to make a huge difference. Over the course of 40 years, it is $770,000 if you invested those dollars instead. $140, that's all it is. Could be $770,000 over the course of 40 years. And over the course of 30 years, it would be $288,000 with that 10% rate of return. Absolutely amazing, just these small amounts, what they will add up to over time if you actually reallocate those dollars and just make some differences. Also, if you are having a lot of overdraft fees, I encourage you to budget. Make sure you have a budget on hand and we have something called the five minute drill, where every single day you spend five minutes on your budget,

• 19:31Andrew Giancola?

  categorizing transactions from yesterday, categorizing some of the transactions that happened today. And then when you do that five minute drill, you'll be on top of your money every single day. Okay, so that is one of the most powerful things that you can do is make sure you budget your dollars. So you know where your money is going is one of the best things that you can do. Number eight, and this is one where there's a lot of consumerism involved in this, but upgrading your phone every single year. So brand new phones cost anywhere from $800 to $1,200 per year. And the average upgrade cycle for a lot of people is about every two years. Now I have had my iPhone for the last three and a half years. I try to keep iPhones usually around five years because not much changes year over year. Secondarily, they last a very long time.

• 20:16Andrew Giancola?

  The only issue with a lot of phones is if your battery does not stay charged. And a lot of phone companies, I feel like this is just a conspiracy Andrews coming out right now, but I feel like a lot of times after two years, they start to really slow down that battery life. And for a lot of people, that's probably just naturally a battery life cycle. But for a lot of people out there, that's when they start to begin to really think about upgrading. But if you're the person that upgrades every single year because you want that brand new iPhone, or you want that brand new Android or Samsung or whatever else, and you are someone who goes out there and just upgrade your phone every year and you really don't get much value out of it, there's no point in doing that. Okay? If you're someone who pays a monthly fee for your phone, it's obviously much better to just pay cash for your phone if you have it, instead of paying it off monthly.

• 20:59Andrew Giancola?

  And if you have that cash on hand, I would just pay cash for the phone and then try to hold it as long as you possibly can. That is the best way to do this and the best way to think about this. Every new phone means a higher monthly bill if you are paying month to month. And if you keep phones for longer than two years, you're probably in good shape. Again, I try to keep mine three to five. My goal is always really to try to keep them for five years. And then repairs are always cheaper than replacing typically. So that is another one as well. And investing in a sturdy case, obviously a screen cover is going to be the two big things that you can do to make sure those last way, way longer. Number nine is designer clothes on credit. So Americans carry $986 billion on a credit card currently, according to the Federal Reserve. And store credit cards equals high APR.

• 21:43Andrew Giancola?

  So store credit cards usually have really high interest rates, 25% plus. A, store credit cards are some of the worst credit cards to go out there and get. They don't give you merry mini benefits and they don't really help you out. With the exception of the Amazon card, I would say that's the only one that I know of that really has tremendous benefits where you get like 5% cash back. If you shop at Amazon a lot, it is a pretty decent deal to have that Amazon card. But outside of that card, every other card that you see is just not going to make sense. If it's a Macy's card, or if you get a Dillard's card, or if you go out there and get, you know, a TJ Maxx card. Those don't have the benefits that you would get with other credit cards out there. Some of my favorites, and if you go to the personal finance podcast.com, there's a little menu at the top that says credit cards, and those are my favorite credit cards.

• 22:28Andrew Giancola?

  It's my page with all my favorite credit cards that I use day in and day out. Chafe Sapphire, Capital One Venture, the Amex Gold. All of these are some great cards out there that you could look at getting into more. Okay, never, ever put designer clothes on credit, though. And then number 10, and this is one that I think some of the folks who maybe are younger are gonna really relate to, but it's buying rounds of drinks for everyone. Now, when I was in college in my early twenties, when you're going out a little more and you're just hanging out with friends a lot more when you go out. Now, you wouldn't catch me dead in a nightclub or bar past 7:00 PM. But nightlife overspending can add up and it can add up dramatically. And if you're the type of person who just buys rounds for everybody all the time because you feel like it's fun or that's the way you want to give back to your friends, I get it, but at the same time, that gets very, very expensive.

• 23:13Andrew Giancola?

  Specifically, if you go out and buy shots, or if you go out and buy drinks that are way more expensive, those are going to have a big impact on your wallet because one round with five people can cost you over a hundred dollars easily nowadays. Okay, I was just on a golf trip in Orlando. We bought a round for four people in the round. It was over a hundred dollars for that specific round. It is out of control, the cost of what alcohol is currently. And so most people don't pay you back. They either forget or they're just out and about. And so if you want to do I would have a cash budget set aside. But if you are struggling to pay your bills and you're buying rounds also for other people, you have your priorities mixed up. Making sure that you do not buy rounds of drinks for people when it doesn't make sense is a huge, huge thing. In fact, the Bureau of Labor actually did a study. The average American spends $3,000 per year on dining and drinks out.

• 23:56Andrew Giancola?

  And so if even a big chunk of that is drinks out, really rethink about that if you can, or just have that cash budget set aside for bars. So those are some of the sneaky budget killers. Now, we're going to get into some of the lifestyle money drains next.

• 24:11Andrew Giancola?

  If you've heard any recent episode of Health Corner, you know that I have spent the last few years trying to optimize my sleep. I've tried sleep trackers, cooling my room, changing my nighttime routine, all the different things, but nothing really matters as much as having the right mattress. And that's one of the reasons I love Leesa. A great mattress is one of those things that you use every single night and you spend a third of your life sleeping. And it can make a huge difference on how you feel the next day. Leesa has mattresses designed for different sleep positions and comfort preferences. And their sleep quiz can help you get matched in less than two minutes. Plus, they're designed and they're assembled in the USA and they come with free shipping,

• 24:54Andrew Giancola?

  easy returns, and a 120-night free sleep trial. So go to leesa.com for up to 30% off mattress plus and get an extra $50 off with promo code PFP, exclusive for my listeners. That's L-E-E-S-A dot com, promo code PFP for 30% off mattresses plus an extra $50 off. Let them know we sent you in the survey after checkout. Leesa.com promo code PFP. My relationship with money has changed a lot over the years. Early on, I thought building wealth was about making more money. Now, I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions.

• 25:39Andrew Giancola?

  That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings, goals, and spending, so you can see your entire Financial picture in one place. One habit that's made a huge difference for me is my five minute drill every single morning. I open Monarch, check my spending, investments, cash flow and net worth, and I'm done in just a few minutes. It gives me confidence that nothing is slipping through the cracks. I also love the AI weekly recap because it'll flag spending changes, upcoming expenses, or shifts in my net worth before they become a problem. Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch.

• 26:23Andrew Giancola?

  Use code PFP at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code PFP. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company. They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free.

• 27:05Andrew Giancola?

  And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen. It's about knowing my family is protected so I can actually enjoy these moments together instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies, starting at just $276 a year for $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com. If you've been listening to this show for a while, you know it's not just me anymore.

• 27:47Andrew Giancola?

  It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact. That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love. Sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes.

• 28:31Andrew Giancola?

  Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs. And listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs. All right, so number 11 is going to be one that a lot of people are doing right now. It is buying brand new cars that you can't afford. So new cars lose 20 to 30% of their value in the first year, according to Edmunds.

• 29:14Andrew Giancola?

  And this is something we have talked about at length in some of our car buying episodes. The average new car payment is $738 per month, according to Experian. Now, this is a massive, massive issue for a lot of people. $738 per month on a car, because the prices of cars are rising, is not the best financial decision for most people. And so many people will stretch their loans for six to seven years. In addition, fancier cars equal higher maintenance. One of the worst purchases I ever made was a luxury vehicle. And the maintenance on that luxury vehicle, which was a brand that rhymes with Mercedes, was something that was absolutely astonishing. You want to get an oil change? Guess how much an oil change is for a brand that rhymes with Mercedes? $2,000 per year. You heard that, right? $2,000 per year.

• 29:59Andrew Giancola?

  Oh, and if you want to get the higher level oil change, which they recommend every other year, it's $3,500 for the whole year. Your boy almost had a heart attack the first time they told him that. And this is something where I could not get rid of that car faster. I was in my twenties when this happened and I could not get rid of that car faster. And it is one of those things that just did not make sense for a lot of people. In fact, your insurance goes up, your taxes goes up, all those different things. And so I have a rule and I even bought that car used, by the way. But my rule is I buy used or certified pre-owned. And we have a car buying rule, which we'll talk about here in a second. But I like to buy anywhere from two to three years old because it takes that big depreciation hit. And now you have a car at a deal. We bought a car over the course of last year because we had a new baby.

• 30:43Andrew Giancola?

  And so we had to get a bigger vehicle because we had three kids instead of two. And so we got a bigger vehicle for my wife and we bought a car that was two years old and saved ourselves tens of thousands of dollars just because we bought this SUV two years old. Now here's the car buying rule that we talk about here. First, we want you to buy it used, but we talk about the 24 12 10 rule. Okay. 20% down is what I want you to have. Obviously, it's always best to buy cars cash, but 20% down is going to be the rule that we talk about here. Because if you buy a brand new car and it gets in an accident, guess what? It took that depreciation hit. I don't want you to be underwater on that car. Okay. So 20% down, you can also get gap insurance and compare the prices on those if you wanted to. Four years or less on your car loan, meaning that I don't want you stretching this out seven or eight or nine years.

• 31:28Andrew Giancola?

  In fact, I'd really rather you have it three years or less, but four years or less on your car loan. Okay. 12% or less of your income spent on your car payment, your insurance, your gas and your maintenance, those four things. Typically, this comes around to about 7% or less on your car payment. And the rest, the other 5% goes to maintenance and gas. Okay. And then lastly is 10. You need to drive that car for 10 years or more. So all of my cars, my goal is to drive them for 10 years or more. That is how you get the true value out of them. The longer you drive them, the better off you will be financially in the long term. Cause you won't always just have car payments because you're just re-inning up over and over and over again. So long-term, you need to drive that car for 10 years or longer, as long as it's safe to drive, obviously. But the number one thing to do is just pay cash for cars. If you can't do that, then follow the 24 12 10 rule.

• 32:12Andrew Giancola?

  Okay. Along those same lines, car modifications. So custom wheels for cars are going to cost you anywhere from a thousand to $4,000. And mods rarely ever add any resale value. So this is something where insurance can go up with mods and you're going to end up spending way too much money. So if you go out and you buy a Tahoe, for example, and let's just say you get that Tahoe, but it's got some plain wheels on there. You want to get the black rims. You want to delete the chrome off the Tahoe so that you have the black on black. And now you're driving around town with that brand new looking Tahoe with the nice rims. If that's you, rethink that or making sure that you make enough money for that to make sense. Nothing wrong with that whatsoever, but I just think car modifications are just a waste of money that you're just throwing money into the fire. Number 13 is overpriced cable TV packages.

• 32:57Andrew Giancola?

  Now I've told this story before on this podcast, but when I had, just last year alone, I got an updated cable bill and the cable company decided to upgrade my cable. I have had streaming services for years, but did a bunch of cost analysis and figured out, okay, actually cable right now is cheaper. And so for the first year, it was absolutely amazing. I signed up for cable. It was way cheaper. It was like less than a hundred dollars a month for cable and really fast internet. And so I had that for years. Then I got a bill in and I saw the bill probably a month later and they auto charged me $240. I wasn't looking close enough like I should have been. So I said, what the heck is going on? And I had an overpriced cable TV package that they added me into. And so then I went back and started negotiating with them. We got it back to 125.

• 33:40Andrew Giancola?

  I ended up cutting out the cable anyway, because I didn't like how they raised the price on me so much and went back to you. Now I have YouTube TV again. And so we went back and forth on that, but I cut out this overpriced cable that I did not need, saved myself over a hundred and forty dollars every single month by cutting this out. It was a big, big difference for me. And so a lot of you out there, if you have cable TV packages, look at some of your cable packages and see if you are charging too much because a hundred dollars per month, as you have seen in just some of these compound interest calculations, we can do it right now again and look at it, but a hundred dollars per month is $206,000 at a 10% rate of return over 30 years. And if you did it over 40 years, this is going to be a big number, $555,000. So huge difference on what will happen with your money over time, just by making sure

• 34:25Andrew Giancola?

  that you're controlling some of these subscriptions. All right. Number 14 is Fancy gadgets you don't need. So US households spend over $1,500 a year on new electronics, according to Statista. And it's usually new tablets, smart home devices, kitchen devices, all those different things. And there's nothing wrong with this whatsoever. In fact, there's a lot of times that I will buy this stuff. It brings me value. But if you were the person who is doing this every 15 to 30 days, and you were buying these new gadgets, and you're constantly just buying the next new thing, Ninja has an ad, and you buy the brand new Ninja gadget, and then you get the brand new iPad the next month, and then you go out and you get the Ninja Creamy the third month, and then you go out and get the brand new Dyson vacuum cleaner the fourth month. If that's you, if you're the person who just

• 35:07Andrew Giancola?

  keeps buying gadgets and you can't stop buying gadgets, this is something where I'm talking to you right now. Because if you have to buy something like this, at least use the 30 day rule, where I usually like to sleep on things for 30 days, if it is something that is not a necessity, and it's over a couple hundred bucks. Okay, that is going to be something that allows you for that cooling off period, and something that really is going to make a big difference in you just making these impulse purchases. Because the folks who treat money in this range, the $200 to $500 range, as if it is $20, are the folks who typically are broke. So if you are someone who goes out there, and you're treating $200, $500, $700 like it is nothing, like you don't have to think about it twice, even if you make

• 35:49Andrew Giancola?

  good money, and you spend those dollars without even thinking twice, without having a real conscious thought about this, typically, those are people who make high incomes that are broke. It's treating $500 bucks like it's nothing. That is something I want you to think through, and make sure you have that cooling off period before you just buy that stuff. Number 15 is trendy diet pills or gimmick supplements. So Americans spend $2.1 billion a year on weight loss supplements, according to NIH, and many pills don't work as promised. If you're the type of person who just buys all these crazy different supplements, and understanding that it's just diet and exercise is going to make the biggest difference for you, but if you're the type of person who just always wants to find the next pill, it really is not worth it, especially when it comes to your wallet. Instead, just making sure you focus on having a right exercise plan, having a diet in place that really

• 36:33Andrew Giancola?

  is going to work for you. Those are the two big things that will absolutely change your life. It's not worth wasting your money. Along the same lines is fad beauty treatments. The US beauty industry is worth over a hundred billion dollars now and much goes to expensive trends. So things like lip plumping or eyebrow microblading or fad facials. These temporary results are earning big, big mon- these are big, big businesses out there. If you look at like Kylie Jenner has a massive business when it comes to the beauty world. Hailey Bieber has a massive business. I think she just sold her business for a billion dollars. Some of these things are just not worth it. Focusing on the skincare basics and looking for deals are gonna be the two big things that you can do. A lot of times you can get sold into different makeup or creams or lotions or shampoos or whatever else.

• 37:16Andrew Giancola?

  All that stuff is typically overpriced if you don't think through it or understand the science behind it. Number 17 is retail therapy. So if your go-to is to go spend money every single time you get stressed or you have a big win or something happens in your life or you're just bored. If retail therapy is your thing and you cannot invest your dollars towards your financial future, that is a problem. And so we gotta make sure that we are looking at the ways that our psychology is impacting our wallet. Cause typically retail therapy is a psychological thing. And it typically is to give you psychological relief for stress or anxiety or whatever else. And if that is you, just learning how to cope with that is gonna make a big, big difference. Number 18 is monthly subscription boxes. So subscription box industry is now worth 22.7 billion dollars according to Subda.

• 38:00Andrew Giancola?

  And they could be beauty boxes or snack boxes or surprise goodies. And they often lead to you paying for things that you wouldn't buy yourself. Now, I know they're fun. It's like getting a Christmas present every single month in the mail. But if you're not using the things inside that box, then it may be something that's just adding clutter to your house. Here's a great example. They have since passed away now, but we used to have two dogs. And when we had two dogs, we got the Bark Box. If you've ever heard of Bark Box, it's like a subscription that sends them treats and toys. And they absolutely love it. Every single month, we would get brand new toys and treats. And so we did it for like 12 months straight. And after the 12th month of getting three or four toys every single month, we have 50 dog toys in our house that we just couldn't handle any more toys coming in. In fact, we would start to like stash away the toys to save them for the dogs. And we would throw out a big stack of them.

• 38:42Andrew Giancola?

  And so we started to have way too many treats and we started to have way too many toys. Where it just didn't make sense anymore. It was building up. So if that's you, if you're not using- them anymore if it's just kind of building up and backlogging then try to cancel those subscriptions because a lot of times they can get pretty expensive depending on what you're looking at a lot of those can be fun for a couple of months but if you're really not using it then look at cancelling them number 19 this is a big ticket one okay is expensive weddings that you can't pay off so the average wedding costs $30,000 and my take on the wedding is that if you have the money and you want to spend it on a wedding more power to you in hindsight after my wedding I wouldn't spend as much as we did on our wedding but many couples are taking on debt to fund their weddings that my friends is not something you want to do if you have to take on debt to fund a wedding you are making the wrong decision

• 39:26Andrew Giancola?

  it is point blank black and white right there if you want to have a wedding fine but if you take on debt to fund a wedding that is not something that you should be doing because payments are going to linger on year over year for a party and that is not something you want to be doing so if this is something where you don't have a huge budget look for budget friendly venues look for ways that you can save money prioritize the guests that really matter look at the food costs look at the music costs try to think through ways that you can save money on your wedding this is not a wedding competition this is something that is special between you and your future spouse and you need to make sure that you are spending consciously when it comes to we'll do an entire wedding episode because there's a lot of things that I could dive into on that but it would take way too much time for this one number 20 is holiday gifts beyond your budget so

• 40:08Andrew Giancola?

  35% of Americans take on debt for holiday shopping according to lending tree and overspending to impress family and friends is the main reason why they do that and they also impulse shop at holiday sales now we have a system here on how to tackle holiday debt so you never go into debt again on the holidays and it is treating the holidays like a bill so what you do is you look at how much did I spend during the holidays last year you can look at your November or December statements add up every single dollar you spent for the holidays last year and I don't care if you're listening to this in July but in January every single year or in July or whenever you first listen to this what you want to do is you want to set up a bucket or a budget category in your high yield savings account and you want to start to allocate dollars towards the holidays at the beginning of every single year so if you start in January and you spent

• 40:51Andrew Giancola?

  $1,200 last year on the holidays you're going to put a hundred dollars every single month in that high yield savings account and so by the time the holidays roll around No stress, there's no anxiety. Why? Because the money's just there. You already have the money available and you can take that money and enjoy your holiday instead of stressing and worrying about money and having anxiety about money. That is the way to treat the holidays properly and that is the way to save for the holidays properly. So you have enough cash on hand, really, really important to make sure that you're doing that. Every single person listening to this podcast should be doing that. They should have a holiday fund. Number 21 is unplanned vacations on credit. Now, if you go into debt to go on vacation, you are doing it wrong. All vacations, no matter what, always need to be paid for in cash.

• 41:34Andrew Giancola?

  Always, always, always, no matter what. Okay? If you do not have enough cash on hand, but you still want to have the experiences with your family, either wait an extra year, continue to save and/or find a cheaper vacation each and every single year until you make more money. There is no reason whatsoever to ever go into debt for a vacation. It is going to destroy your financial future. You're going to have high interest rates on your credit cards. It is never, ever, ever an option for you. Make sure you get that down. It is never an option to go into debt for a vacation. Plan and save first and it'll be so much better, so much more rewarding, so much more relaxing than taking some lavish vacation that you cannot pay cash for. All right. And then number 22, the last one, is lending money to friends that you know won't pay you back. So one in three Americans lose money lending to friends and family.

• 42:17Andrew Giancola?

  And it creates these really awkward relationships. So if you're going to lend money to somebody, I would treat it as a gift. And I've always done this. I've talked about this in the past. Because otherwise, say you lend $2,000 to a friend, okay? What's going to happen is if they can't pay you that $2,000 back right away, now you're going to get frustrated. And when you get frustrated, then you're going to start to ask them, hey, can you start paying me a little bit of that $2,000 back? So I can kind of recoup what I sent over to you? And now what's going to happen is they're going to get mad at you for asking for the $2,000 back. Is it fair? No, but this is always what happens when it comes to money psychology. Is now you're putting pressure on somebody else and they are going to get frustrated that you're putting that pressure on them when they don't have it yet. And so now your relationship is going to start to get damaged because you both feel like you're somehow being wronged in some way, shape or form.

• 43:02Andrew Giancola?

  And this is what happens when it comes to money with friendships. So instead, if you're going to give somebody money, give it to them. If you value that friendship, give it to them. Yeah, you heard me right. If somebody asks you for a hundred bucks, just give it to them. Or if you don't have it and you don't want to give it to them, just say no. Just say, hey, I don't mix financials with friendship. I just don't think it's good for our friendship. And it's a very simple response, but you do not have people borrow money and then they pay you back and definitely don't cosign for anybody. But those are the two big things that I want you to know and I want you to learn as time goes on here. So these are the 22 things broke people waste money on that I want you to avoid. Listen, thank you guys so much for being here. I hope you got value out of this episode and if you guys have questions at all, join the Master Money Newsletter and you can respond to any of those newsletter issues that come out every single week.

• 43:46Andrew Giancola?

  Listen, thank you guys so much for being here. I truly appreciate each and every single one of you and we will see you on the next episode.

• 44:06Speaker 01

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