A few years ago, I started tracking exactly where my money was going, and what I found genuinely shocked me.
Not because I was spending on obvious things, but because some of the biggest wastes were decisions I'd never even thought to question.
Things that society had convinced me were completely normal.
So in this video, I'm going to share with you eight things that are a complete waste of money, and what to replace them with instead.
If you're new here, hi, I'm Nisha, a qualified accountant and a former investment banker.
And on this channel, we talk about all things personal finance.
Let's start with the very first one, and that is buying cheap.
You've probably heard the phrase, buy cheap, buy twice before.
It's popular because It's often true.
We buy the cheapest option to save time and money, only to spend more in the long run on replacements and repairs than if we just bought something decent quality from the beginning.
But there's another side to this that doesn't get talked about as much.
Even when a cheap purchase clearly isn't working, a lot of us can't bring ourselves to get rid of it.
So it ends up in a drawer, in a cupboard, along with a dozen other things that weren't worth what we paid for them.
If this sounds familiar, it's not your fault.
What could be to blame is a psychological bias known as a sunk cost fallacy.
It's basically when we stick with something, a product, a habit, a job, even a relationship.
Not because it's working, but because we've already put time or money into it and it feels like a waste or it feels wrong to walk away.
You might see the sunk cost fallacy showing up in your relationships, in your career, your day-to-day life too.
For example, if you're watching a movie that you think is boring, you're probably not going to walk out of the cinema early because you've paid for a ticket.
Whereas if you're watching the movie at home for free, you probably just change your channel or switch your TV off.
The only difference is what you've already spent.
The same thing happens with cheap purchases.
We hold onto them long after they've stopped being useful, because throwing them away it feels wasteful.
But keeping them doesn't get your money back.
It just costs you space.
It costs you mental energy.
It costs you clutter.
Sometimes even more money down the line.
So before you buy something cheap, it's definitely worth asking two things.
First, how often will you actually use it?
If it's something you'll use every day, skimping usually isn't worth the frustration.
If it's something you use once or twice a year, spending a lot more probably doesn't make sense either.
And the second question is do you actually need it at all?
A lot of cheap purchases don't get used because they were never really solving a problem.
They just felt like a good idea at the time.
Number two, a bigger home than you need.
When you apply for a mortgage, you'll usually go in with a rough idea of how much you'd like to borrow.
If you're buying a home for 500000, for example, and you've saved a 50000 down payment, you'll need 450000 to fill the gap.
But what happens if the lender offers more than this?
If they offer you a mortgage of $500,000 or even $600,000, would you take it?
It might sound like a no-brainer, especially if you're offered enough to buy in a better location or to get an extra bedroom.
And if the monthly repayments still look manageable at today's interest rate, it's very easy to convince yourself that a bigger loan is worth it.
It's only when you add up the true cost of the full loan that you realize how much of a waste it can actually be.
If you borrow 450,000 at 4% over 30 years, let's say, you'll pay 773,000. just a bit over that.
That includes your 450,000 mortgage along with over 323,000 in interest alone.
Increase your loan size to 550000 with the same interest rate and you'll need to pay back over 944000 over that 30-year term, including your original loan plus nearly 400000 in interest.
You also need to think about how your circumstances might change over time, turning what seems like an affordable monthly repayment today into something that could keep you up at night in the future.
If your income falls, if interest rates rise or you have more outgoings in the future, you might have very little left over once your expenses are paid.
Then there's the cost of the home itself.
A bigger place means usually higher energy bills, higher property taxes, more maintenance, more repairs, more money spent filling the space.
These don't hit all at the same time or all at once, which is exactly why they are so so easy to underestimate, so it's really worth being honest with yourself about what you actually need.
Right now, there's actually no rule that says you can't live in a one bedroom with a baby, So whilst you might feel pressure, thinking you need to upsize, there is no rules around this.
Your kids don't need their own room straight away either.
Staying smaller for longer can keep your fixed costs down and leave room in your budget for other things, instead of stretching yourself thin right from the start.
So, instead of thinking about what most people do or what the general rules are, figure out what it actually is that you want and that is important to you.
Number three, upgrading your phone every year.
Are you someone who upgrades your phone every year?
If so, you are not alone.
25 of Americans expect to upgrade their phones within one to two years, compared to just 15 in 2023.
And I get it.
When the cost is spread across monthly payments and you can trade in your old device, it doesn't feel like a big spend.
I used to upgrade every single year without really thinking about it.
It was like a must.
But nearly like four or five years ago, I just stopped.
And my phone now is three years old and it still works completely fine.
There's a few scratches on the side, but it's completely fine.
If I kept upgrading, that's easily another two or three thousand dollars or equivalent just gone.
So say you're paying around forty five a month for your phone over two years.
That's just over a thousand dollars.
Keep doing that every couple of years.
And over a decade, you've easily spent five, six, maybe seven thousand dollars. extra on phones.
Choosing a new phone or switching contracts can be really overwhelming, partly because there are just so many deals on the market across multiple providers.
But as a starting point you might find it easier to compare the cost of different devices without the data plans attached.
The other thing worth knowing is that you might be paying for features you'll never actually use.
At the time of recording this, in early 2026 in the US, an Apple iPhone 17 starts at 1029 for 512 gigabytes.
But you could save 200 by choosing a 256 gigabytes iPhone 17 or a 128 gigabytes iPhone 16 for 829.
If you switch to 128 gigabytes 16E and you're looking at $599, giving you a saving of over $400.
So if your current device isn't broken, you can save a lot of money by just waiting another year or two before you switch.
And if your contract is up, it is easy to switch to a SIM only plan until your device has breathed its last breath.
Of course again, if you're really passionate about having the latest iPhone, you do not have to take any of this advice.
I'm just encouraging you to be mindful of exactly how much a new phone is costing you, so you can weigh out whether it's worth sacrificing other things to keep on top of the latest tech.
By the way, when you're saving all this money, you might be thinking what to do with it.
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Thank you so much, Plum, for sponsoring this bit of the video.
Number four, diamonds.
Let's talk about diamonds.
You've probably heard that an engagement ring should cost a month's salary, or maybe even two months or three months.
That idea is so widespread that a lot of people assume it's some longstanding tradition.
In reality though, that rule actually came from an advertising campaign by the diamond company De Beers.
It originally started as one month's salary and over time it quietly prepped up.
All because the industry wanted to make more money.
If you're really interested in diamonds and you've budgeted for them, I'm not going to tell you to stop.
But there are a few things to think about before buying one, whether it's for you, whether it's for a loved one.
And that is that most engagement rings actually lose a significant chunk of their value the moment you walk out of the store, not because they're low quality, but because the retail markups are huge.
So, even if you never plan to resell it, that drop is still useful to understand, because it shows how much of the price is branding and marketing rather than the stone itself.
It goes to show just how beneficial buying secondhand or vintage can be, or even seeing a specific bring that you like from a branded shop and then going somewhere else and actually purchasing, making that ring yourself or picking the diamonds separately.
You could also save thousands by buying a lab-grown diamond rather than one that came from the ground.
Many people think that lab diamonds are fake, but they're made of the pretty much same materials as mined diamonds.
And even trained gemologists can't tell the difference without specialist equipment.
The main difference is the price, with lab-grown diamonds costing nearly 30 to 70 less than mined ones for the same size and quality.
And I actually found this out firsthand.
I lost a pair of real diamond earrings that I bought for myself as a birthday present.
And when it came to replacing them, I looked into lab grown ones.
I got the same ones, pretty much.
I showed them a photo.
They made the same ones, the same quality, for a fraction of what I'd originally paid for the real diamond ones.
And honestly, I couldn't even tell the difference.
None of this is about spending as little as possible.
If a diamond ring is important to you, that is completely fine.
The waste happens when people spend large sums without knowing where the expectations came from or what alternatives exist.
When you know the numbers, you get to choose.
Instead of defaulting to an expensive decision you didn't even realize you were making.
Number five, luxury purchases labeled as investments.
Let's imagine you're thinking about buying something expensive.
Maybe it's a coach bag.
Maybe it's a Herman Miller office chair or some other large expense that you don't strictly need.
You know it's a lot of money, so you start looking for ways to justify it.
You might not even be justifying it to other people.
It is for you.
It's totally normal to look for ways to make ourselves feel better about big purchases.
So what happens very often is you tell yourself this is an investment.
You'll use it for years.
It's good quality.
It might even save you money in the long run.
And once that idea is in your head, something really interesting happens.
You start noticing things that support that decision.
Reviews about durability, articles about posture or productivity.
People online saying it's worth every single penny.
Meanwhile, you ignore the downsides even if you don't mean to.
This is a form of confirmation bias.
When we want something badly enough, our brains get very good at finding reasons to justify the purchase, whilst ignoring all the reasons not to buy it.
The problem is telling yourself that these luxury somewhat purchases are an investment won't actually make it true.
They're unlikely to grow in value.
They're not going to generate income.
They're not going to improve your financial position.
Sure, they might make life more comfortable or enjoyable, and that is fine, but they're not improving your financial position.
They are just nice things.
And honestly, that's enough of a reason to buy something.
You don't need to dress it up as an investment to give yourself permission.
Just be honest about what it is so that you could put it in the right category in your budget and think about that spending in the right way.
And then you can make that decision from there.
Number six, extended warranties.
Let's imagine you're about to buy something, a laptop, a TV, a kitchen appliance.
You've done your research, you're happy with the price and you're about to check out.
And then it appears, would you like to add an extended warranty for just a five or a month?
It feels small.
It feels sensible.
Better safe than sorry, right?
But here's what's actually going on.
Most products don't break during the extended warranty period.
And when they do, the cost of repair is often less than what you already paid for the warranty itself.
So in a lot of cases you've spent money on protection you never needed for a problem that either never happened or would have cost less to fix anyway.
What a lot of people also don't realize is that you're probably already covered.
Most products actually come with a manufacturer's warranty.
Retailers often have their own return and repair policies.
And if you pay by credit card, there's a very, very good chance that your card automatically extends the warranty on purchases anyway.
Extended warranties are pushed so hard at checkout because they're incredibly profitable for the company selling them.
That's the whole point.
Most people never use them.
And that's exactly how the model works.
So instead of paying for one, a better option is to build your own small repair fund.
Set a little aside each month, and if something breaks and you're out of warranty, you've got it covered.
You keep the money either way instead of handing it over just in case.
Number seven, which might sound a little controversial at first, and that is weddings.
And I'm not actually going to say they're a complete waste of money, because I am of the opinion that this is one of the few days in your life where you and your partner will have everyone you both love in one place.
And so it is worth spending some money on.
But the question is, how much?
From my own experience and from talking to friends, one of the first things that people do when they start planning a wedding is they go to look at some venues.
Someone will show you around, maybe give you a glass of champagne.
At the end of your tour, you'll usually be handed a brochure with some prices on.
Now, for some people that price can come as a shock, because straight away it is out of their budget.
For others and this is an experience that some of my friends have had it's actually lower than they were expecting.
So they lock in a date, they tell all the friends and they start planning everything around it.
And this is where costs start to spiral.
You've got suits, you've got dresses, you've got a photographer, you've got a DJ.
You've got all these extra costs.
But on top of that, the venue itself will often charge extra for things you assumed were included.
Suddenly there's a fee for reception drinks, a charge for cutting the cake, the cost of your room the night before.
And if your friends are already married, there's a good chance you'll feel pressure to include things from their weddings too, even if it means blowing your budget.
And because most people only plan to do this once.
It is very easy to let the budget rules slide a little, telling yourself it's a one-off, it's going to be worth it.
And maybe it is, but if you end up borrowing money to pay for your wedding, things have probably gone too far.
The last thing you need at the start of a marriage is debt from the day itself.
So before anything else, write down exactly what you can afford to spend and stick to it.
List the things that genuinely matter to you and your partner and give yourself permission to skip the rest.
Saying no to family isn't easy, but doing it early saves a lot of stress later on, especially when they're not the ones footing the bill.
And number eight, streaming subscriptions.
The average American spends 552 a year on streaming subscriptions and 10 of people are paying for more than five services at the same time.
Now, I want to be clear, spending money on streaming isn't automatically a bad thing.
I talk a lot about cutting back on things you don't love so you can spend more on things that you do.
So if you're genuinely watching TV for hours every day, $46 a month is actually pretty reasonable.
But I'd guess that most of you aren't doing that.
You're probably only watching a fraction of what you're paying for.
And I bet that there are whole months where you barely touch certain platforms because you're busy or because you're watching something on a different service.
Or you just forgot it was there.
So here's a useful way to think about it.
Pick one of your streaming services and ask yourself how much would I need to watch this month to make me feel like it was worth the money?
So let's say you decide two shows is a threshold.
If each show is around eight hours long, that's 16 hours of watching on one platform.
Now multiply that across four services.
That's 64 hours of content a month.
You'd need to get through to feel like you're getting value from all of them.
Is that really realistic?
I cancelled two of mine last year and honestly did not miss them.
Not one bit.
The reality is, most of us are paying for the idea of having lots of options not because we're actually using them.
So just do a quick audit, go through your subscriptions, work out which ones you actually used last month and cancel anything that doesn't make the cut.
You can always resubscribe when there's something you actually want to watch.
And I don't want you to watch this video and think I'm attacking you for spending money on non-essentials.
I mean, I had a wedding.
I don't always make the most of my subscriptions.
And I sometimes make expensive purchases that I regret later.
I used to be a lot worse, repeatedly wasting money month after month without realizing it.
But now I have my money set up in such a way that the occasional blip doesn't completely derail my finances.
So I budget for big luxury purchases and I review my spending regularly.
That way, any money mistakes are identified really quickly and I can get back on track.
Thank you so much for watching.
If this video helped you spot a few spending habits you didn't think about before, let me know in the comments which ones you relate to most and whether there are other money pitfalls that I've missed.
Thank you so much for watching.
Don't forget to subscribe if you haven't already, and I hope to see you again next week.
