Cutting out Wasteful Spending from the Budget

photo credit: Steve WamplerI am a numbers person, so naturally I like to analyze every cent that comes in and out of our family budget. I look for things like wasteful spending and where we can save more money. Any extra money can be used to create passive income that will help my family obtain our goal of financial independence. Our long term goal is to become financially independent so that we no longer need to rely on having jobs to pay the bills and provide for us. As I have stated many times – I could lose my job any day, as nobody is safe from this economic downturn. I have decided to take control and ownership of our personal finances that will help put us in a more stable financial position. Cutting back on wasteful spending is just one way to do that.

My wife and I have always led fairly frugal lives. We don’t have expensive cars or live in a house that we can’t afford. We live within our means and have a very comfortable life. However, we still spend money every once in a while on things that we want and don’t necessarily need. After all, it is just money and we want to enjoy life with our children. We believe that there are certain times when we can spend some money on a few (and I mean just a few) of our wants.

I recently walked around our home and made notes on what items we purchased over the last year. My wife and I had been saving up some money to buy some things for our new home that we moved into just over a year ago. I took the list and then identified the top 5 things that we purchased that we hardly ever use. I wanted to break things down to see if the things we bought were actually being used. Here is the list -

1. Dining Room Outfit – My wife and I have always wanted a formal dining room. So when we went house searching over a year ago, we only looked for homes that had a dining room. Once we moved into our home last year, we spent the next 6 months looking and looking for a dining room outfit that was inexpensive but still fit our needs (i.e. durable with two young boys). We finally found a very reasonable dining room outfit and made the purchase. While we were very excited about purchasing this furniture set – we have only used it twice during the past 6 months! So was this purchase wasteful spending? I don’t really think so – at least for now. Part of the reason why we don’t use the outfit is because of time. Between my job, building our passive income empire, and raising the two boys – spending time sitting down for a formal dinner tends to get cut out of our daily routine.
2. Toys – Toys, toys, and more toys! I can’t wait to have a garage sale when our children are a little older and we can get rid of some of their toys! My wife and I had a really bad habit when our oldest son was born. We bought every kind of toy available – not to mention the grandparents spoiling their only grandson. We have since cut way back but it doesn’t seem like enough. We actually had a very hard time finding things to buy for our youngest son this past Christmas. While we cut back on gifts for everyone this past year – we still did buy both boys some new toys. I would consider several of the toys we purchased this year as wasteful spending as most of them rarely get used.
3. Wicker Furniture – We also made a very frugal purchase on a wicker furniture set for the morning room in our new home. The set had been marked down considerably when the store was trying to unload summer merchandise early last fall. We purchased the set and have used it once. While I am very tempted to say that this was a wasteful expense, I just can’t do it. If we didn’t purchase the set, the room would have nothing in it. While we don’t use the outfit today, we hope to in the future once we have a little more time. The clearance price of the set alone is enough for me to say that it wasn’t wasteful spending.
4. Front Porch Rockers – I always wanted a big front porch in my home. I don’t know what it is but a front porch to me gives a home character and curb appeal. Besides searching for a home with a dining room (as noted above), we also looked for one with a decent front porch. Luckily we found a home with both. When we moved in we decided to go out and purchase four rocking chairs to put on our new front porch. I was so excited about this purchase and couldn’t wait to set them up. A year has almost passed and I have sat in them for a combined 2 hours. Not the most frequent items we use. While I think they add charm to our home, I look back and consider this a wasteful purchase. We could have probably just added some plants and other outdoor decorations we already had in our garage to spruce up the front porch.
5. Jacuzzi Bathtub – While this wasn’t something that we specifically went out and purchased directly – our master bathroom came with a beautiful jacuzzi bathtub. The problem is that it never gets used. My sons think it is really cool and have taken a few baths in it and I found time to take one bath in it. My wife has never used it at all! In my opinion, this was a very wasteful indirect expense to us. Although the bathtub does make for a very nice laundry basket!

The term wasteful spending can be interpreted in different ways by many people. I guess it is how you would define the purchases you make and the things you spend money on. Buying a coffee on the way to work every morning instead of drinking free coffee at work may seem like wasteful spending to some. Others may not interpret it that way. As you can tell by my top 5 list above – all items had something in common. They all are purchases for things we made that we don’t really use. Some of them we now look back and consider wasteful while others we still believe are not.

What do you consider wasteful spending? What purchases have you made in the past year for things that you don’t use?

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