As another year of relatively high inflation comes to a conclusion, many people are setting New Year’s resolutions to cut back on spending in 2025. Yet doing so is easier said than done. To accomplish this goal, it helps to be specific and clarify what’s important to you.
“As long as you are spending money in ways that align with your values, you are not wasting your money. Money is a finite resource, therefore it is important to identify your core values and spend to your heart’s content in those areas. Everything else? Just say no,” said Kate Dorman, certified financial therapist and founder of Sound Financial Therapy LLC.
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“Sometimes we spend money that aligns with other people’s values — our friends’, family’s or coworkers’ values — instead of our own, because we do not want to feel judged. By spending according to your values, you invite others to do the same,” she added.
With that in mind, the exact things to stop wasting money on vary by person and situation, but here are some general ideas to get you started in 2025.
Storage Space
If you have to spend money to simply store your possessions, that could be a sign you have too much stuff in a way that’s causing you to waste money.
“I’m not a pack rat, so if new items come into my house, I try to get rid of things I no longer use. Many people, however, inherit items or find it hard to part with belongings, so they rent storage units as a short-term solution. Unfortunately, these ‘temporary’ storage units often become a long-term expense, with people spending $400 to $500 a month for years on items they rarely, if ever, access. I encourage my clients to reassess whether the stored items are truly necessary and, if not, to let them go,” said Joe DiSanto, founder and CEO at Play Louder.
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Vice-Related Spending
While it’s arguably normal to have certain vices, in general, these are areas that are ripe for cutting back on in ways that benefit your wallet and health.
“Many clients spend hundreds of dollars a month — sometimes $300, $400 or more — on smoking, vaping, cigars or similar habits. While I’m not here to judge, as we all have our vices, this can be a substantial drain on finances. When I point out how much they’re spending, most clients are shocked and often motivated to cut back or quit,” DiSanto said.
Luxury Clothes and Accessories
It’s easy to fall into the trap of trying to keep up with social media influencers or impress friends by buying luxury items to add to your wardrobe, but there are often far less expensive options that can still help you look and feel stylish.
“It’s worth considering whether splurging on designer brands is necessary. If it brings you joy and you can comfortably afford it, that’s one thing. But for those looking to be more financially conscious, I advise paying attention to how much is spent in this area,” DiSanto said.
Luxury Cars
Similar to luxury clothes, luxury cars are also often unnecessary. Even if it’s not a brand traditionally associated with luxury, you might be spending hundreds of dollars more per month on a car like a pickup truck when all you really need is a mid-size sedan to get from Point A to Point B.
You might also be better off waiting to buy a used car rather than leasing one.
“Leases often lock you into the most expensive period of a car’s life — the first three years — only to encourage you to lease another new car at the end of the term. To get the most value out of a car, I recommend owning it for at least five to ten years. Personally, I buy slightly used cars, often three years old, from places like CarMax. These cars are nearly new in terms of features but come at a significantly lower price because they’ve already depreciated during the initial lease period,” DiSanto said.
New Phones
Many people buy new phones even when their current model works just fine. And it might seem like you’re getting a good deal through your phone carrier, but that often costs you money in the long run, as it prevents you from switching to less expensive carriers, for example.
“Phone companies encourage upgrades every two years by tying customers to payment plans. While I don’t oppose payment plans — most are interest-free — I recommend keeping your phone for three to four years instead of upgrading as soon as the plan ends. Skipping every other version of a phone model, like moving from the iPhone 10 to the 14, can save you a significant amount of money over time,” DiSanto said.
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This article originally appeared on GOBankingRates.com: 5 Things To Stop Wasting Money on in 2025
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
