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10 things you're likely to spend too much on

Tradition and emotion often cause people to overspend. Who says you should pay 3 months' salary for an engagement ring? Here's how to anticipate and cut the costs.

By MSN Money Partner Aug 21, 2013 11:46AM

This post comes from Michael Koretzky at partner site Money Talks News. 


MTN logoAll too often, we buy things we think we're supposed to, and whenever there's an emotional component involved, our tendency to overspend is enhanced even more. Think funerals, weddings and engagement rings, just for starters.


Here are some of the purchases that people routinely spend too much on, plus solid suggestions for cutting those costs.

1. Funerals

The worst time to shop for a funeral is after a loved one dies, when grief can affect judgment. That suggests this is a purchase you should arrange yourself long before your demise. According to the National Funeral Directors Association, Americans paid an average of $6,560 for a funeral in 2009, the latest year for which cost is available, and that doesn't include a burial plot, marker or stone, flowers and obituary.


Here's how to significantly reduce that cost:

  • Consult the government. The Federal Trade Commission regulates "funeral providers." Here's a list of the rules they must follow, plus some excellent advice, including:

o    "The law requires funeral homes to give you written price lists."

o    "You have the right to buy goods and services separately."

  • Shop around. Because the law allows you to BYOC (bring your own casket), shop around. Where? Try Costco. While the NFDA says a casket averages $2,295, you can get a beautiful Costco casket for $950 -- delivery included. But there are many other discount options online.
  • Get cremated. More Americans are opting for ashes. In 1960, only 3.6% did, but that had risen to 42% by 2011, says the NFDA. The Neptune Society, one of the largest cremation services, says its costs vary by "local market factors" but insists it's "a fraction" of burial costs.

2. Weddings

Who doesn't enjoy reading about "The 12 most expensive weddings in history"? No. 1 is Princess Diana's wedding ($110 million adjusted for inflation). While the average American wedding costs a fraction of that, it's still $28,427, according to a survey by wedding website The Knot.


While everyone from Martha Stewart to Bank of America offers advice for saving on weddings, the truth is plain: Many brides refuse to skimp on their big day. So while buying from websites like PreOwnedWeddingDresses.com and limiting the floral arrangements and guest list can save thousands, many are going to eschew those steps.


Maybe these other cost-cutting suggestions will appeal:

  • DIY the DJing. The Knot survey says a reception band will cost about $3,084, while a disc jockey will run almost $1,000. But many couples, especially younger ones, are programming their own music on iPods and simply hiring someone (or even asking a friend) to push the right buttons at the right time. Search online for "DJing your wedding" and you'll find all kinds of detailed advice.
  • Skimp on the cake. How many weddings have you been to where everyone exclaimed, "That cake was delicious!" Most attendees don't care, and they only get a sliver, anyway. So don't buy your wedding cake from a specialty baker. Buy it from your local grocery chain. Since the average cake runs $560, you can easily cut that cake price in half.

Wedding ring (© Jamie Grill/Photolibrary/Photolibrary)3. Diamond rings,

You'll notice we didn't mention engagement and wedding rings in the Weddings section. That's because jewelry is an overspending category unto itself -- and diamonds may be the most marked-up item on this list. But like spending on funerals and weddings, buying diamonds is fraught with danger because it's yet another emotional purchase. If we try too hard to save money, we feel like we're being cheap.


But here's a secret: Diamond prices are often negotiable, even at major chains like Zales and Kay Jewelers. So while it's important to know the four C's of diamonds -- carat, color, clarity and cut -- the biggest lesson you can learn is to haggle. If your local jeweler or national retailer won't come down on price, they'll often be willing to upgrade the setting for a discount or even free.


4. New cars

Money Talks News founder Stacy Johnson lives in a beautiful house on the water, and there's a 30-foot boat docked out back. But he's never, ever bought a new car. This is what he says:

When it comes to buying cars, the vast majority of people I've known over the years approach the subject with no imagination at all. They simply do what the commercials tell them to and what their friends do: trudge down to the nearest dealer and buy a new car.

Instead, he's bought used cars for as little as $5,000. How? He avoids car lots. "A few years ago I bought a 1994 Cadillac Fleetwood Brougham from a 91-year-old lady," he recalls. He suggests asking around -- friends of friends seem to value a fair price and honesty. He also consults websites like Kelley Blue Book or Edmunds.com to establish a value. And finally, he gets the car inspected by a local mechanic. It might cost $50, but it can "save a ton of headaches and bills down the road," he says.


But if you're dead-set on a new car, consider more than the price. Also take into account resale value, fuel efficiency, repair record and the cost of insurance.


5. Food

So you don't cook much or well, and you don't have the time or space to grow your own fruits and vegetables. Since that sums up the advice in many saving-on-food articles, now what? Here are three quick and easy suggestions:

  • Eat smart when eating out. Of course, the unhealthiest food is often the cheapest. So if you're both healthy and price-conscious, skip the soup and salad -- they're not only expensive for what you get, they're not nearly as good for you as you think.
  • Buy smart when eating in. If you don't like to cook, at least make meals with healthy ingredients that are easy to manipulate, such as beans, brown rice and eggs.
  • Don't be bored/scared of cooking. You can save big and still eat well. .

6. Clothes

Kanye West made headlines recently not just for releasing his new album, but also for selling his own clothing line that featured a $120 white T-shirt. Guess what? He sold a lot of them, says The Huffington Post. While maybe you weren't among those who purchased one, the fact is that we've all overpaid for clothes because we liked the label.


Perhaps the most crucial advice on buying clothes is about what not to do: Don't buy brands. Five years ago, in a study of online clothes shopping, Consumer Reports determined that its readers rated Sears clothes "excellent" 29% of the time -- and "Victoria’s Secret, the Gap, J.C. Penney, and Kohl's fared about the same."


7. Private school

Of all the items on this list, none is harder for scoring a deal. First, you need to find one close to home. Then you need to figure out the best way to compare prices and services. Finally, you want to pursue financial aid. Here are three good places to start:

  • The National Association of Independent Schools. It represents 1,700 institutions nationwide -- including religious and boarding schools -- and it has a Parents' Guide   with tips for everything from visiting the school to landing financial aid.
  • PrivateSchools.com. This simple-looking website is about financial aid, plus details on scholarships, loans and vouchers. It also has a search function for nearly 30,000 schools.
  • Time magazine and The Week. Six years ago, Time published a controversial story about a controversial study that disputed whether private schools are really any better than pubic schools. A few months ago, The Week did the same. Read them before you decide to spend thousands a year in tuition for something you can get for free.

8. College

While experts offer all kinds of conflicting college advice, they seem to agree on one thing: Spending more than you can afford to attend a big-name school isn't smart. As with buying clothes, you need to look beyond the pricey labels. As Money Talks News reported last month, "Forbes has released its list of top colleges for 2013 and for the first time, the top two aren't in the Ivy League." Start by checking out the U.S. Department of Education's College Affordability and Transparency Center.


9. Insurance and warranties

We've all heard the expression "Better safe than sorry." But we also know about "Nothing ventured, nothing gained." You can spend a lot of money insuring yourself against any probability, and insurers prey on those fears. But many things that can go wrong can be fixed for cheaper than the premiums. Take cellphone insurance, for example. Personal finance blogger Len Penzo did the math and determined it wasn't worth the cost.


The same goes for extended warranties. Consumer Reports has always been skeptical of them, pointing out that your credit card may already provide an extended warranty.


10. Credit cards

This item has the potential to rack up big savings with just a few minutes of your time. But too many of us sign up for a few credit cards and never look back, paying high interest on a balance or a large annual fee. Or we cut them up because we think those pieces of plastic got us mired in debt.


But credit cards, wisely used, can help you claw your way out of debt. Reward points are like free money, and balance transfer offers can reduce your interest rate to zero for many months.


Have you overspent in one of these areas because tradition or emotion or other people's expectations got the best of you?


More on Money Talks News:

112Comments
Aug 21, 2013 2:23PM
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I didn't see Cable TV.  My bill exploded to $180 per month for extended basic TV and 15 Mbps internet.  It was "only" $125 just three years ago.  The intro rate was $90 per month when I started 5 years ago.  That's doubling of my bill in just 5 years.
Aug 25, 2013 6:40PM
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It would be a cold day in hell before I would pay extra for a shirt just because it had some celebrity's name on it.
Aug 22, 2013 6:22PM
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Cable TV:  One of the biggest ripoffs around--and you still get commercials on the regular channels.  Reduce to Basic+Internet and you'll still pay $75+/month for mostly crap TV.  More proof that CEO's and their ilk are scum.
Aug 25, 2013 8:53AM
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Why in the hell do we have to pay so much for cable anyway.
Aug 25, 2013 5:08PM
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We  kicked Direct TV to the curb more than a year ago,  Hulu, netflix, and basic rabbit ears  is enough for me.
Aug 25, 2013 4:48PM
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I wouldn't buy a Kardashian or Kanye item if it were the last thing on earth.  And by the way, the "big reveal" of their daughter North was ho-hum at best.  *yawn*
Aug 25, 2013 8:54AM
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Cable TV is one big issue with me. I changed carriers four months ago and I am going to flip again in a couple of months. Companies lie about their costs and until you really get the first bill you do not know exactly. Funerals are an issue. It is best to prearrange a funeral if you can. If you do not have the money to lay down, then shop around and make a list of providers in order of estimated costs. Update every four or five years.
Aug 25, 2013 8:56AM
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I agree with the cable scam.  I sometimes get 4 of the same moves on at the same time and cable is slow as can be.  I guess they have you by the balls dont they
Aug 25, 2013 8:24PM
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My body is being donated to the Anatomy Gifts Registry for medical and scientific study. They cover the cost of cremation after study is done. No casket, no funeral, no cemetary plot. Suck it, funeral industry. You're not getting any of my family's money.
Aug 25, 2013 8:59AM
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A wedding day should be special, but how special. If you are managing on a budget, don't blow it when you get married. Simple details that cost little money are what people remember most. Also remember, unfortunately that in the US chances you will wind up in divorce court in five years or less. Save you money and consider eloping.
Aug 25, 2013 12:04PM
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Cellular phones, especially "smartphones" on a contract with a data plan are incredibly overpriced. Instead, purchase a just discontinued phone outright (eBay, etc.) and connect through a prepaid plan such as Page Plus using Wi-Fi hotspots exclusively for data.
Sep 2, 2013 8:07AM
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I agree with most of this list, but in the New Car section the author endorses "avoid car lots". Really? You want us to buy from private owners? The people who will do and say whatever you want to hear so that they can get that car out of their driveway. They provide no warranty, don't care about your satisfaction or repeat business, have no online reputation, and will never see you again. And do you really think they are selling that car because they are tired of owning such a prefect car? Have you ever sold your car after it had been fully serviced and was in perfect condition? Neither has anyone else. Don't fall into that "private owner" trap unless you know the private owner. You'll be sorry.
Aug 25, 2013 10:10PM
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Ray Bans are the  best ripe off, I'v had 2 pair with factor defectives. The  plastic coating bubbles up.

$120- 140 a pair.

 

Ray Bans policy sucks on how they replace defective glasses !!

Sep 2, 2013 10:26AM
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No question about Cable TV being a rip off. I've heard Europeans say they are completely perplexed why Americans put up with such high Cable/Internet costs. In Europe they get the same level of service or better, for about HALF of what we routinely pay. Why is that??
Aug 25, 2013 1:09PM
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read the fine print and use common sense .
Aug 25, 2013 8:57AM
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I meant the Internet is slower than owl ca ca

Aug 25, 2013 5:14PM
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Sun Glasses has to be the biggest rip off of all
Sep 2, 2013 9:37AM
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I read just this week that something is coming that will eliminate cable TV...I can't wait.  See who get the last laugh.
Sep 2, 2013 9:46AM
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My youngest son liked 'name' brand clothes, so I spray painted 'Tommy' on a white t-shirt and showed him a $35.00 receipt and he wore it proudly for months. By the way, his name is Tommy, so no copyright infringement..
Sep 2, 2013 9:07AM
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If you are worried about the cost you can't afford it.
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