20 Everyday Rip-Offs Draining Americans’ Wallets

This post may contain affiliate links.

Did you notice how fast your paycheck evaporates? It’s not just big expenses like rent or mortgage that are eating away at your funds. While much of our everyday spending isn’t glamorous, behind each dollar lies a hidden cost, and those costs begin to accumulate.

The Bureau of Labor Statistics reports that the average American household spends roughly $66,928 a year, with much of this money going towards expenses with little to no value. These stealthy rip-offs are draining your wallet every day through excess ATM fees, and even premium gasoline. Here are some of the most common culprits and how to avoid them.

Premium Gasoline

Although many drivers believe that premium gasoline is best for all vehicles, in reality, this isn’t the case. Rather, you only need premium gasoline for certain engines. According to the Federal Trade Commission, the extra benefits offered by using higher octane fuel in a car that doesn’t require it do not exist. 

Switching to regular unleaded rather than the premium can save an average of $300 a year on your gas bill, based on how often you drive.

Cable Packages

According to the Leichtman Research Group, 44 percent of U.S. adults subscribe to a streaming service rather than traditional cable. 

The average cost of a cableTV package in the U.S. is $217 a month, according to Leichtman Research Group. And with streaming, many families save upwards of $50 a month, which makes it a smart choice for budget minded homes.

Credit Card Interest and Fees

Credit card debt can accumulate quickly, especially if you’re only making minimum payments. The average U.S. household owed $7,849 in credit card debt , according to NerdWallet’s 2020 report. 

The best way to avoid interest is to pay off balances each month in full. Consider seeking cards with lower interest rates or exploring balance transfer options to minimize these costs.

Extended Warranties

Many consumers are suckered into purchasing extended warranties, which come seemingly as appealing add-ons to purchases but become failed promises. According to Consumer Reports, more than half of extended warranties are unclaimed, and maybe simply setting emergency funds aside for repairs is a better, cheaper alternative.

Products experience a low failure rate during the period of the extended warranty, and so these plans are unnecessary. Instead of getting an extended warranty, consider putting money aside in a savings account.

Gym Memberships

A Finder.com survey states that 23% of gym members never go to the gym, while 47% only go once a week or less. 

That’s a lot of wasted money with an average cost of $58 a month. If you’re not using a gym membership to the fullest, then consider pay-per-session classes or home workouts.

Bank Transfer Fees

International or Domestic bank transfers often come with fees which will eat into your funds. Fees for a transfer can vary between $10 and $50 depending on the bank.

Researching alternatives, such as PayPal or Wise, can offer cheaper or even free solutions for transferring money.

Luxury Coffee

A daily latte habit can turn expensive. Buying one every day means each cup will run you around $4 a pop, amounting to nearly $1,500 a year. 

Brewing coffee from home is much cheaper than in any coffee house, and with a little practice, you can make your favorite coffee house drink at home. A good, quality coffee maker is a relatively small expense that can make a huge difference in the long term.

Fast-Food and Takeout

Fast-food convenience often comes at a premium. Research done by The Simple Dollar discovered that home cooked meals on average cost 60% less than takeout options. 

According to the Bureau of Labor Statistics, the average American household actually spends about $3,365 a year on dining out. Planning meals and preparing them at home may not only save you money but also help you with control over what your eating and how much..

Bank Overdraft Fees

Overdraft fees can sneak up on anyone and become a real pain and costly habit. That said, the average overdraft fee is $33.58, and it can happen in the blink of an eye, according to the Consumer Financial Protection Bureau.

According to CNBC, Americans forked out over $11 billion in overdraft fees in 2019 alone. Opting for overdraft protection, keeping a cushion in your account, or setting up low-balance alerts can help avoid these fees.

Name-Brand Products

Some think when it comes to name brand, it equals superior product, but that isn’t always the case. In fact, store brands often have similar quality, and they are available at a fraction of the price. 

Consumer Reports found that store brands are a cheaper bet than name brands, with shoppers able to save an average of 25%. Compare prices and try store brands whenever possible to stretch your dollars.

In-Store Warranties

Even though there are free checking accounts, many people use the ones that are paid. You easily deplete your account with monthly maintenance fees, transaction fees, and minimum balance penalties. 

Nearly half of checking accounts are charged a monthly fee, according to Pew Charitable Trusts. An alternative is to research banks offering fee free accounts or even credit unions for less of these charges.

Banking Fees

Many individuals still pay for checking accounts despite the availability of free options. Monthly maintenance fees, transaction fees, and minimum balance penalties can quickly deplete your account. 

The Pew Charitable Trusts found that nearly half of checking accounts charge monthly fees. Researching banks that offer fee-free accounts or exploring credit unions can cut down on these charges.

Late Payment Fees

Late payment fees are a common pitfall, especially with busy schedules. According to the National Foundation for Credit Counseling, late fees can range from $25 to $35 per incident.

Setting reminders or automating payments ensures that you avoid these unnecessary charges. This simple step can prevent unnecessary charges and safeguard your credit.

Fancy Cell Phone Plans

Often, a simple prepaid plan will offer enough data and features for a small fraction of the price.

Take a look at your cell phone usage and decide what plan matches your needs. Switching down to a prepaid plan can greatly reduce your cost.

Lottery Tickets

Buying lottery tickets is another drain on finances without much reward. According to a Motley Fool survey, Americans spend more than $108 billion a year on lottery tickets with hopelessly slim odds of claiming the jack.

Winning big on a lottery ticket is incredibly unlikely. Instead of hoping for a windfall, consider investing that money for a more promising return.

Single-Use Kitchen Items

Single use items, like sandwich bags or disposables plates, are convenient, but financially and environmentally expensive. If a family spends $10 a month to buy these products, they are spending $120 per year. 

As alternatives, reusable items can help your wallet and the planet. Stick to multipurpose kitchen tools rather than individual single-use items.

Impulse Buys at Checkout Counters

Small, tempting items are strategically placed at checkouts so as to lure customers in for a last minute purchase. For the typical American family, Progressive Grocer found that impulse buys add up to over $5,400 annually. 

Creating a shopping list and sticking to it can combat these impulse purchases.

ATM Fees

When you use an out of network ATM, your bank, and the ATM owner may collect fees. According to Bankrate estimates, the average surcharge paid for using an out-of-network ATM was $4.64 in 2020 — and that’s increased since. 

This may not seem like a lot on the face of it, but if you use out-of-network ATMs frequently you can be spending hundreds of dollars a year on bank fees. You can sidestep these charges by planning your cash withdrawals or choosing cash-back options at retailers.

Subscription Services You Don’t Use

Streaming platforms, music subscriptions, and digital magazines can be enticing, but many users forget to cancel subscriptions they no longer use. A West Monroe survey found that the average consumer spends $273 a month on subscriptions, but many aren’t using all of them.

Regularly auditing your subscriptions can reveal services you might no longer need, enabling you to redirect that money toward more meaningful financial goals.

Bottled Water

Bottled water is a convenient choice for many, but its cost can pile up. Data from Food & Water Watch shows that bottled water can cost up to 2,000 times what tap water costs.

The average American spends around $100 per year on bottled water, according to the International Bottled Water Association. Investing in a reusable water bottle and a good filter not only saves money but also reduces environmental waste.

Disclaimer – This list is solely the author’s opinion based on research and publicly available information.

7 Money Rules The Rich Don’t Want You To Know

7 Money Rules The Rich Don’t Want You To Know

15 Creative Coffee Bar Ideas to Start Your Morning Off Right

15 Creative Coffee Bar Ideas to Start Your Morning Off Right

11 Must-Have Finds For Enhancing Your Family Movie Nights

Affordable Home Entertainment: 11 Must-Have Finds For Enhancing Your Family Movie