Money Management

While most purchases cost more than they used to, some items are exceptionally overpriced. Keep reading for four you might be able to avoid. 

Lately, it feels as if life gets more expensive by the day. While necessary expenses like groceries and housing are difficult to avoid, many people continue to pay high prices for avoidable costs. Every dollar you spend on overpriced things impacts your bank account balance. Keep reading to find out what ridiculously overpriced things people can’t stop buying.

1. New cars

For people across the country, it can be challenging to get around without having a car. Public transportation isn’t always available or reliable, even in some major cities. Unfortunately, it costs a significant amount of money to purchase a new vehicle.

The average new car in the United States sold for $48,043 in June 2023, according to Kelley Blue Book. This is the highest total on record, and the first time the average nationwide new car price topped $48,000. Paying nearly $50,000 for a vehicle sounds painful.

In addition to record-high car prices, interest rates for auto loans are not great, thanks to the Federal Reserve’s interest rate hikes. That means a new car purchase can quickly become more expensive. If you need to replace your car, compare new and used car prices. You may be able to save money by purchasing a used vehicle. But make sure you have it looked over by a mechanic first to avoid costly repairs.

2. Weddings

Weddings are another overpriced thing that people can’t stop buying. Many couples host an elaborate wedding to celebrate their union. But unless you go out of your way to plan an inexpensive event, you could easily overspend on this one-day event.

You may be surprised to find out how much a wedding can cost. According to The Knot, the national average cost of a wedding ceremony and reception totaled $30,000 in 2022. For many couples, that’s a sizable down payment for a home purchase.

If you’re newly engaged, you may want to consider whether you wish to spend thousands of dollars on a wedding or instead plan a more affordable celebration. By hosting a budget-friendly event, you’ll have more ability to prioritize your joint personal finance goals.

3. Food and drinks purchased at events

Attending a musical performance or sporting event can quickly become expensive. Unless you’re able to secure tickets right when they go on sale, you may end up spending a good chunk of cash on ticket costs due to resale markups and added fees.

But another expense that can make your next entertainment outing costly is food and drinks purchased at the venue. When you’re feeling hungry or thirsty while at an event venue, you’ll be stuck paying higher prices. If you’re not careful, you can easily spend more than planned and rack up an expensive credit card bill on food and drink costs.

Last month, I attended two NHL hockey games at two different sporting venues, and I paid more than $18 at each for one beer, before gratuity costs. For this reason, I generally avoid buying food or more than one round of adult beverages when attending concerts and sporting events. I arrive early and have dinner and drinks nearby before the event starts.

4. Caskets

Another item that people continue to overpay for is caskets. Many people have funerals to give their loved ones who have recently passed away a proper goodbye. But a funeral can quickly become expensive, especially when planning a traditional burial service.

According to the National Funeral Directors Association (NFDA), the median cost of a funeral with a viewing and burial was $7,848 in 2021. The median cost of a metal casket that same year was $2,500, while a wood casket was $3,000. That’s a lot of money to spend.

Many people don’t realize they can purchase a casket from an outside source. The Federal Trade Commission (FTC) requires funeral providers to accept caskets purchased elsewhere without charging additional fees.

If you have the time and flexibility to shop around for a casket, it can be a win for your wallet. Purchasing a casket at Costco could save you hundreds of dollars. Some people buy their own casket well before they die to save their loved ones money on funeral expenses.

Keep your finances top of mind

As you make everyday purchase decisions, be sure to keep your finances in mind. Look for ways to save money on expenses to avoid overspending. You could free up extra cash by avoiding some overpriced purchases or opting for affordable alternatives. While you may need to get creative to save money, it can be worth it.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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It’s a good idea to get started on holiday shopping. But read on to learn about one payment option that could come back to bite you. 

Although it’s only the start of November, you may be deep in the throes of holiday shopping already. And that’s not a bad thing.

The sooner you begin your holiday shopping, the more time you’ll have to research prices at different retailers and, ideally, walk away with the best deals. Plus, if there are people on your shopping list who want very specific things, getting a jumpstart could mean not having to scramble at the last minute — or disappoint the folks you love.

As you go about your shopping, you may be offered the option at different retailers to pay for your purchases using a “buy now, pay later,” or BNPL plan. That may seem like a better alternative to swiping a credit card.

But you’ll need to be very careful when going this route. And you may want to think about steering clear of BNPL plans altogether.

The danger of BNPL plans

An estimated 20% of Americans plan to use BNPL plans to purchase gifts during the holidays this year, according to Adobe Analytics as reported by USA Today. But while BNPL plans might seem like a convenient option for making purchases, they could also end up harming you financially.

For one thing, it’s pretty easy to qualify for a BNPL plan. Usually, you pay a portion of your purchase upfront and then agree to repay the rest in installments over a period of 12 weeks or less. The problem, though, is that BNPL plans might drive you to make purchases you truly can’t afford.

It’s one thing to say no to a given purchase because you’re coming close to reaching your credit card limit, or you’re unable to qualify for an additional line of credit by opening a new credit card. A BNPL plan might tempt you to buy something you really can’t swing by making that purchase possible in the absence of other avenues or having the cash on hand.

Also, it’s easy to see why you may be tempted to use a BNPL plan even if you haven’t come close to reaching your credit card limit. When you charge expenses on a credit card, you’re charged interest automatically when you don’t pay your balance in full, the exception being if you have a 0% interest rate for a limited period. With a BNPL plan, there’s no interest at stake if you make your installment payments on schedule.

But if you don’t make those payments on time, you most likely will face costly penalties and interest. Plus, you’ll risk having your credit score take a hit, the same way you would if you were to fail to pay the minimum balance due on one of your credit cards.

It may be best to say no to BNPL plans

It’s easy to see why you may want to sign up for a BNPL plan as you’re doing your holiday shopping. But that’s a move you might regret.

The upside of starting your shopping early is that you have time to pivot if you realize you can’t swing many of the items on your list. So rather than subject yourself to added debt, make adjustments to your spending plans if money ends up being tighter than expected, or if tackling your gift list in full proves to be too costly. You’re better off buying less expensive items, or cutting items from your list, than closing out the holiday season with a pile of debt and a massive hit to your credit score.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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The holidays can be expensive. But read on to make sure they don’t seriously upend your finances. 

It’s November, which means the heart of the holiday season will be here before we know it. And if you’re the type to not leave things to the last minute, you may already be in the process of doing some holiday shopping.

It’s hardly a secret that the holidays tend to be an expensive time of the year. An October survey from Deloitte, however, found that U.S. consumers expect to spend an average of $1,652 on the holidays this year. That’s a 14% increase from last year.

Of course, if you can afford to shell out $1,652 for holiday gifts, decorations, and other purchases, go for it. Perhaps you have that money sitting in your savings account earmarked for this very purpose.

But a lot of people can’t afford to spend $1,652 or anything close to that. And if you’re in that boat, you should know that pushing yourself to spend beyond your means could leave you with a serious pile of credit card debt. That could, in turn, mean starting off the new year in a hole and feeling incredibly stressed about it.

A much better bet is to try to close out the holiday season debt-free. Here’s how.

1. Set a budget

Maybe you have $600 sitting in savings to spend on holiday purchases, and you’ve worked for the same company for 10 years and have consistently gotten a $200 bonus in the weeks leading up to Christmas (and there’s no reason to think you won’t have a repeat). In this case, it’s reasonable to set a spending budget of $800. But do make a point to set a limit.

If you take the approach of “I’ll just do my best to minimize my spending,” you might easily go beyond what your financial situation allows for and end up with a credit card balance you can’t pay off in full. So try your best to come up with an actual number to work with.

2. Set priorities

When you’re limited in what you can spend for the holidays, you sometimes need to make tough choices. That could mean forgoing a roof full of lights and sticking to just a Christmas tree. It could also mean giving out fewer gifts this year, or keeping your gifts to less than a certain dollar amount.

It’s not easy to cut back on expenses during the holiday season because it only comes once a year, and you don’t want to feel like you’re missing out. But think about it this way. If you rack up debt during the holidays, you’ll miss out on the chance to save your money in the new year instead of handing it over to your credit card company in interest form.

3. Consider a side gig

Don’t want to skimp on too many purchases this holiday season? You may not have to if you’re willing to hustle.

Working a side gig, whether it’s clocking in some hours at a local retailer or driving for a service like Uber, could put extra cash in your pocket so you can buy all of the gifts you want and go all out on hosting parties and events. So think about what’s more important to you — getting to spend that money or having more downtime. And it’s okay to choose either option. But if you’re willing to give up some leisure time to pull off the holidays the way you want to, then why not?

Maybe you’re planning to spend a lot less than $1,652 this holiday season. Or maybe you expect to spend more. The amount of money you anticipate spending should be based on calculations you run — not what consumers broadly expect to spend. And if you crunch those numbers and aren’t happy with the holiday budget you arrive at, you could always take advantage of the gig economy to drum up extra cash.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Want to get the best deal possible at Target? Don’t miss the retailer’s holiday price match guarantee. Find out how this policy could help you save money. 

You’re not alone if you’ve already begun your holiday shopping. If you plan to shop at Target, the company’s holiday price match guarantee could save you money. The retailer has some fantastic early holiday deals to help you keep more cash in your bank account.

But if something you purchase now through Dec. 24 goes on sale for a lower price, Target will pay you the difference. This policy can help you score the best deal possible. Here’s what you need to know about Target’s holiday price match guarantee.

Avoid overspending with Target’s holiday price match guarantee

If you find yourself strolling the aisles of your local Target store in search of gifts, you should know about the retailer’s holiday price match guarantee. If you make a Target purchase in-store or online between Oct. 22. and Dec. 24, and Target lowers the price on or before Dec. 24, you can request a price match.

You must show proof of purchase to qualify for a price adjustment. The lower-priced item must be identical to the one you purchased. I took advantage of this policy last holiday season. I took my Target receipt to the customer service desk, and the lower price was matched in seconds. Since I paid by card, I received a refund to my credit card for the price difference.

If you want to get your holiday shopping done as quickly as possible, this policy can give you greater confidence that you can get the best deal possible without waiting until the last minute to shop. But you’ll need to monitor prices after you shop to see if they’re reduced.

You can quickly look up prices on the Target mobile app. If you’re a Target Circle rewards member, you can also see your recent online and in-store shopping receipts in the app. Since Target runs weekly sales, it’s a good idea to review prices for your recent purchases every week so you don’t miss out on additional savings. Every cent you save adds up.

How to maximize your savings at Target

Target is a great place to shop if you like to save money. The retailer frequently runs sales on everyday essentials and holiday must-haves like electronics, clothes, and household goods. For regular shoppers working hard to reach their personal finance goals, it’s worthwhile to join Target’s free rewards program, Target Circle Rewards.

As a Target Circle Rewards member, you can earn cash back rewards on Target purchases. You can later redeem your earnings for a discount on future shopping trips. You can also activate money-saving offers that provide additional discounts.

Plus, Target will send you an annual birthday gift to reward you for your loyalty. If you’re not yet a member, you’re missing out on valuable rewards and deals. Check out a few little-known perks of a Target Circle Rewards membership.

You should also consider using rewards credit cards to pay for your purchases to maximize the rewards you earn. You can earn points, miles, or cash back when you charge items on your credit card. Check out our list of the best cash back credit cards to learn more.

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In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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