Here are a few things you’re probably overpaying for!
9 - Cable If you’re trying to save money and be smarter
with your money, one of the easiest things to get rid of is cable.
I’d say to just not watch TV in general, but hey, that’s just me.
If you really need shows in your life however, you can easily just get a subscription to
netflix or hulu.
But somehow, a lot of people still choose to keep cable!
If you’re one of those people that have cable, make sure you’re not overpaying for
your subscription.
The average basic cable package costs around 65 dollars month or 780 dollars per year,
but that doesn’t include taxes and all those weird fees they tack on.
It’s common for some families to buy packages that has anywhere from 130 to 300 plus channels
included in their subscription.
Research has shown that Americans only view an average of 17 channels despite the massive
variety they have to choose from.
The best way to avoid overpaying for cable is to choose the best subscription package
for you and not the best package the cable company offers.
And just watching TV to watch TV so you can get the max value of your cable bill just
doesn’t make sense either!
8 - Bottled water The convenience of having a product that you
can essentially get for free bottled for you has turned into a multi-billion dollar industry
in the US.
At an average cost of $1.22 per gallon, consumers are spending 300 times the cost of tap water
to drink bottled water!
But just how pure is that pristine bottled water in your shopping cart?
As it turns out, the answer varies depending on the brand, and on a confusing array of
water terms.
Artesian water isn't the same as spring water for instance.
The bottom line is that close to half of the bottled water sold in the United States is
ordinary filtered tap water.
The National Resources Defense Council completed a four-year-long study of over 100 brands
of bottled water and found a few disturbing things, such as the case of “pure, glacier
water” having been pumped from a well near a hazardous waste site.
Bottled water brands are fond of using images of snow capped mountains and pine forests
on their labels, even when the water in the bottle may really be from a tap in Pittsburgh.
Or, as one investigator put it, "the same stuff that fills up your toilet bowl."
Just buy a water bottle and refill it!
7 - Brand-name items It happens quite a lot that you go into a
store to buy something and you see the product you were looking for under two different brands.
One is the premium brand while the other is the store brand.
If you take a minute and do a quick comparison of the ingredients and the price, then you
might realize that the brand name product isn’t always the best choice, but is often
the more expensive one for no real reason whatsoever.
Brand phobia happens when we always prefer buying the branded product over the non-branded
one, often out of the fear that the non-brand products won’t be good enough.
Your headache isn’t gonna know the difference between a brand name and a generic pain reliever,
as long as they have the same active ingredient in the same amount.
So instead of spending the extra money on brand name pharmaceuticals, go for the generic
brand and save a few bucks.
6 - HDMI cables When people first started using HDMI cords
to deliver digital signals to their TV’s, the cables were another expensive thing to
buy along with the TV.
But as HDMI cables became widespread, you could find them at prices under $10.
Now there’s a wide range in price for HDMI cables, from ten dollars all the way up to
hundreds of dollars!
There must be some small improvement for performance for the most expensive cables right?
“In terms of picture quality there’s no difference,” explains Jeff Park, Senior
Technical Manager for HDMI Licensing, LLC.
“It’s digital, so it’s all or nothing.”
So the short answer is no.
He says quote, “Whether you have a $100 cable or a $5 cable, if they meet the same
specification requirements there should be no difference.
From a technical point of view they are exactly the same.”
What people really pay for in expensive cables is just a bit more quality.
That and some great looking materials that make the cable look expensive, but adds absolutely
no value to performance.
Case in point, Magnolia retails a 9.8 foot long HDMI cable for $459.00!
If you need a new HDMI cable there is absolutely no reason to buy the super high-end HDMI cable.
Inexpensive HDMI cables will give the same image and sound quality as expensive cables.
5 - Textbooks Textbooks have long been criticized for being
grossly overpriced.
The giant markup for college textbooks largely comes from author royalties, editorial production,
and marketing.
Don’t even get me started on the ROI of going to college itself.
Students have to pick degrees that actually can make them money!
Anyways, textbooks haven’t always been so expensive.
Publishers and professors decided to come together and release new editions of a book
every two or three years.
Textbooks became less about educating and more about profitability.
According to The College Board, the average student spends upwards of $1,200 per year
on textbooks.
If you’re really trying to save some money, just buy old editions of the same textbook.
Or better yet, just go to the campus library and use the textbooks that’s often available
for free.
4 - Extended warranty If you’ve bought a home appliance, computer
equipment or a used car recently, you probably have been offered an extended warranty.
In many cases, the salesperson probably pushed you hard to purchase it, outlining all of
the benefits of the warranty.
The question here is, are extended warranties a good value?
The answer is a resounding no!
These policies are a great deal for those that offer them, but they’re a terrible
deal for the customer.
There are several reasons why.
Most often, you may be purchasing insurance you already have, as most products will carry
some type of manufacturer’s warranty for at least a year.
Another big reason is that well, insurance is a losing proposition – it has to be.
Insurance companies aren’t in the business of losing money.
They can do this only because, on average, you’ll pay them more than they will pay
you.
Insurance companies that issue these policies also factor in breakage.
That is, many people who suffer a covered loss won’t file a claim.
They’ll either forget that they bought the extended warranty or they won’t be able
to find the paperwork to prove they bought it!
3 - Restaurants Restaurants markup the cost of food to turn
a profit of course, but some foods have way bigger markups than others.
Soda from the fountain sells for 20-40 times the restaurant's cost, and eight times more
when it's served in a can.
A cup of tea in a nice sit-down restaurant goes for $2.25 to $3.25, whereas the tea bag
costs no more than 35 cents.
When it comes to pasta, it's impossible to assign an exact dollar figure because the
markup depends on what it’s topped with.
But if you exclude pasta dishes with seafood or red meat, you can probably figure that
that bowl of pasta costs the restaurant around a couple bucks, and most restaurants sell
their pasta dishes for 6 to 10 times the cost.
Eggs often come with a hefty markup as well.
The profit margin for a scrambled egg is about 80 percent.
As far as cheese goes, restaurants pay, on average, 29 cents per slice of cheese, but
offer to add cheese to burgers for $1.50 on average, a 417% markup.
If you’re really trying to stick it to a restaurant, order a steak, such as ribeye
or filet.
Sometimes restaurants sell it for a loss just because they pretty much have to have it on
the menu.
Do you know what’s usually the worst thing to order at a restaurant?
The special of the day!
Typically it’s something that’s about to go bad, or something the restaurant got
for a great deal.
If you’re gonna eat out, at least choose something that you can’t easily make at
home for yourself to get the max value out of the experience!
2 - Wine You would think that the more money you spend
on a bottle of wine, the money you spend would proportionally go to the actual winemaking
process.
But, it just doesn’t work out that way.
Where exactly does the money go?
For a 100 dollar bottle of wine, around 25-40 dollars of the bottle really goes to what
you can actually taste.
Let’s just go through a quick example.
A winery sells their $25 bottle of cabernet to a wholesaler or distributor for $45 per
bottle.
Well, that distributor or wholesaler needs to make money as well.
The distributor charges the retailer $65.
The retailer tacks on the de facto 50% margin.
The wine is now listed at almost a hundred bucks on the store shelf.
When picking a bottle of wine, bear in mind there are two things related to quality.
First on the list are the things you CAN taste – here think about the grapes, the oak barrels,
the winemaking process – and the things you CAN’T taste but still pay plenty of
money for: the marketing, the bottles, the corks, the labels etc.
The cheap wines, something under ten bucks a bottle, put a good percentage of that 10
dollars in making the bottle look good.
For more expensive wines, $100 dollars or more, the biggest percentage of the 100 bucks
in the marketing of the wine.
Yes, ultimately, it’s better wine, but you’re not getting the best bang for your buck.
It turns out that you get the best value for your money by buying wine in the mid-price
range, for somewhere around 20 bucks for a bottle of wine!
1 - Newest Consumer electronics The newest consumer electronics that comes
out is one of the worst things people overpay for.
One obvious reason is the fact that these products depreciate fast.
Such products face the double whammy of wider availability, as competitors jump on every
bandwagon, and constant innovation, which knocks prices lower.
The longer a product is on the market and the more available it becomes, the lower its
price becomes.
In terms of innovation, the drawback of nearly all electronics is that whatever you buy,
whenever you buy it, a newer, more high-tech product will be on the market within weeks
or months, for cheaper.
Take 3D TVs for example.
In July 2010, the average 47-inch to 50-inch 3D TV sold for a little more than $900 dollars.
A year later, the same TV sold for about $400.
This is why Sony has lost money on its television division for eight straight years!
Buying used or perhaps buying the previous year's closeout model is the smartest way
to go.
You’re not going to feel the slight difference in improvement in technology, but you’ll
definitely feel that extra money you saved!
Here’s what’s next!