The 3 Biggest Wastes of Money

by | Aug 17, 2020

For anyone who has achieved that state of financial independence, the following does not apply. If you have accumulated enough wealth (or you’re on track to accumulate enough wealth) to meet all of your financial goals, you should enjoy your money. Besides, what is all the hard work for if you can’t enjoy it just a bit?

But, I see many people that have not reached financial independence and are not on track to get there anytime soon, but they are spending their money on things that produce little to no return. So, for those of us striving to build wealth, here are what I think are the three biggest wastes of money.

1. Vehicles You Can’t Afford

There are two key issues when talking about purchasing an expensive car; the payment and the value over time. New cars are obviously more expensive than used cars and, therefore, they demand a higher monthly payment.

In fact, according to the 2015 Bureau of Labor Statistics Consumer Expenditure Survey, the average household pays 13.6% of their income toward “transportation,” compared to the average affluent household, which pays just over 3% of income to the same.If you think about it, that’s almost $900/month being spent on transportation for a household making approximately $80,000/year.

Also, according to Nerdwallet, your car’s value decreases around 20% to 30% by the end of the first year. From years two to six, depreciation ranges from 15% to 18% per year, according to recent data from Black Book. That means that you can assume your car will lose 60% of its initial value over five years!With all that said, buying a nice new car feels good. There is not much like that new car smell and pulling it off the lot for the first time. Again, if you’re saving at a rate that puts you “on track” for retirement, then go enjoy a nice car. But, if not, you’re going to make things more financially difficult in the long run.

2. Weddings

Let me just say that I think weddings are wonderful. Your wedding day is a special day and there is nothing wrong with spending some money to host family and friends as you celebrate your marriage.

However, somewhere along the line, it became the “norm” for folks to not only spend “some money,” but to spend an obscene amount of money for their big day. According to, the average wedding in 2019 cost an average of $33,900!

For the average couple, or the average set of parents that are footing the bill for their child’s wedding, the wedding “standards” we have today are excessive. This may be evidenced if you’re considering refinancing your mortgage or taking a loan from your 401(k) to cover these costs (Hint: don’t do that).

Call me old-fashioned, but I think a wedding can be just as special on a budget. What makes it special are the people you celebrate with, not the centerpieces.

3. (Some) College Education

While this point certainly does not apply to some degrees (medical, accounting, engineering, etc.), I believe it does apply to many others.

According to, the average cost of a 4-year degree is approximately $122,0003, while the average salary of a college graduate is only about $50,944.4 In other words, it’s not uncommon to have student loan debt of over 2x your starting annual salary.

Contrast that to a specialized medical program like one to become a Certified Registered Nurse Anesthetist (CRNA). According to, the average starting salary for a CRNA is approximately $197,000 in 20205, while tuition and lost wages is likely to amount to about $200,0006, almost a 1:1 ratio.

This means that CRNAs may have higher debt, but they can pay it off much faster than the average person. This is the reason I believe that some college education is a waste of money. Students pay significantly more than they need to for general or common degrees. In many cases, they also spend years figuring out what to major in to begin with and may even switch their major one or more times.

What are the fixes?

The fixes are simple. Think of every dollar spent in terms of ROI (return on investment). Only buy a car that you can afford. Budget weddings are more affordable than lavish weddings. And, when it comes to college education, thinking in terms of ROI is crucial. Will the expected salary be worth the debt I will have to take on? After all, every investment should be looked at with an ROI lens.

Bottom Line

If you have more than enough, or you’re saving more than enough, than enjoy the rest. If not, consider avoiding these pitfalls that so many do not. As always, I recommend speaking with a CERTIFIED FINANCIAL PLANNER™ for more individualized help.


1. Nerd’s Eye View;




5. MerrittHawkins;

6. CRNAFinancialPlanning;


AJ Erzen

AJ Erzen

Wealth Advisor

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