How Americans Waste Over $1 Trillion Every Year_Featured_, Economy Monday, October 1st, 2012
CLN Editor’s Note: To put this list in perspective, consider that the estimated annual cost to end world hunger is about $50 billion. This is roughly what American spend on alcohol each year. Just something to think about.
13 Ways Americans Throw Away Money
We waste a whole lot of money. Seriously, over half a trillion dollars.
This list is based on estimates due to limited available data, and the true total is surely higher. We included things like cigarettes and gambling, even though some would claim they are are worth their cost. This is a personal finance site after all, and these are costs you can cut.
$6 billion in unused gift cards each year
$41 billion in gift cards went unused from 2005 to 2011, worth $6 billion a year, according to TowerGroup. Most of these are considered lost or discarded.
But don’t ditch those unused gift cards just yet—you might be able to turn them into cold, hard cash.
Last year, deals site CouponSherpa launched a movement called Gift Card Exchange Day, during which consumers could sell their unwanted or slightly used gift cards for cash.
On the marketplace, people post an ad for their card in the hopes that a gift card reseller will buy it. ”On average you could pocket between 75 and 92 percent of the value of your original gift,” reports BI’s Mandi Woodruff.
$7 billion in ATM fees each year
Americans pay through the nose at the ATM machine, according to Bankrate.
What’s more, these penalties are higher than ever right now.
The only way to ditch them may be dumping your big bank for a credit union. Not only do some credit unions reimburse you for ATM fees, some will even pay you for using their card.
$12 billion in traffic tickets each year
Drive too fast? Park in the wrong spot? You are spoon feeding money to the government and the insurance companies.
The National Motorists Association estimates that Americans spend 7.5 to 15 billion dollars on traffic tickets, assuming 25 to 50 million traffic tickets, costing an average of $150 with an insurance surcharges for half of them costing around $300. (We averaged the range in this estimate.)
$29 billion on candy each year
$31 billion on lottery tickets each year
$44 billion on tobacco each year
Americans burned $44 billion on tobacco, according to the BLS.
It’s become such a problem that low-income New Yorkers are spending a quarter of their annual salary on cigarettes.
And we’re not counting the indirect health costs, which are covered in a later slide.
But help may be on the way. Researchers like Dr. Ronald Crystal of Weill Cornell Medical Center are developing vaccines that could provide immunity to nicotine and even cocaine. It’s a one-time shot that could help stop addiction.
$50 billion on alcohol each year
$49 billion on credit card interest each year
NickCotter at www.flickr.com
We calculated this figure based on a Gallup surveyshowing that the average cardholder had an unpaid balance of $2,210 at the end of the month. Throw in an average APR of 12.75% for 174 million cardholders, and you get total annual interest payments of $49 billion.
You seriously need tostop wasting money on credit card interest and end the debt cycle for good.
***Slide changed to correct a miscalculation of credit card interest rates.
$69 billion at the casinos each year
Casinos earned gross revenue of $125 billion in 2010.
We’re going to be generous and estimate that 45 percent of this money was returned to gambler’s in winnings. That leaves $69 billion money that people willingly gave away.
Warren Buffett says it was while watching people throw away money at a casino that he first realized how easy it would be to get rich.