8 Things You Should Stop Buying to Build Wealth

If your goal is to build long-term wealth, there are certain purchases you should seriously reconsider. They’re a waste of money. 

In this video, I'm going to share 8 things you should stop buying in order to grow your net worth and achieve financial freedom.

1. Expensive Coffee Drinks

One of the easiest places to cut back is on those pricey coffee shop drinks. A daily $5 latte can add up to over $1,500 per year.

Consumers spent nearly $110 billion on coffee in 2022. Women spend about $2,327 per year on coffee, while men spend almost $400 less, at $1,934 per year. Don’t get me wrong, I know you love your coffee but, there are ways to save money on it. Brew your coffee at home or take a reusable cup to the coffee shop.  The savings can really add up over time when redirected into investments.

2. Brand Name Clothing

Designer labels and brand name clothing are often heavily marked up. Believe it or not, they’re not always ‘better’. 

American households spend an average of about $120 per month on clothes. That comes out to $1,434 per year. If this is a lot for you, find ways to cut it. 

Avoid brands all together and look for equally stylish and high-quality options at discount retailers, second hand stores, or even generic clothing brands for a fraction of the cost. Focus on value over labels to save money.

If you love brands then look for sales. You can get the same product at a discount during seasonal sales.

Most t-shirts cost less than $10 and if it had a brand name on it, it would cost up to $50! There’s a reason why the owner of luxury brand maker, LVMH is one of the richest in the world.

3. Cable or Satellite TV 

With the abundance of streaming options these days, paying for an expensive cable or satellite TV package is often an unnecessary expense. The average American has 4.5 subscriptions and pays an average of $924 per year.

This is a lot. Start by cutting the cord and stick to lower-cost streaming services. Make sure to keep an eye on your bills as it is common for people to ‘forget’ about services they’ve subscribed to. Maybe you’ll even watch less TV!

4. Eating Out Frequently 

While the convenience of restaurant meals is appealing, the cost really adds up compared to cooking at home. Aim to limit eating out to special occasions and try meal prepping to save money on your food budget.

Americans spend about $3,639 eating out per year, which comes to about $300 per month. This is a lot of money but this isn’t an expense I’d recommend you cutting altogether as going out and having fun is important.

What you should do instead is limit the number of times you go out or budget according to your means.

Also, eating out isn’t great for your health as we tend to eat more than normal and most restaurant food is packed with sugar and carbs.

5. Lottery Tickets 

Buying lottery tickets may seem harmless, but the odds of winning are incredibly slim. The money spent on lottery tickets would be much better invested in assets that have a higher chance of providing an actual return. 

There’s a reason why they call lottery tickets a tax on the poor.

6. Impulse Purchases

It's easy to make unplanned purchases, whether it's online shopping or wandering the aisles of a store. Get in the habit of waiting 24-48 hours before making any non-essential purchases to avoid impulse buys. 

If it’s a big purchase, I wait at least a week before buying anything. 

Amazon created the 1-click checkout to make it easy for people to buy online. That’s why I don’t shop online unless I already know what I need. I never buy something that’s not on my list.

Another way to avoid impulse purchases is to wait for sales or even Black Friday and buy everything you need at a discount. It saves you money but also helps avoid impulse buys.

7. Expensive Hobbies

While it's important to have enjoyable hobbies, overspending on expensive equipment, memberships, or travel can derail your wealth-building efforts. Seek out more affordable hobby options or find free/low-cost alternatives.

I used to ski but it’s expensive. A lift ticket can now cost $150, not to mention the equipment. Sure, you can buy a season pass to help with the cost, but you have to be sure to go enough to make it worth it. Now, I go running for free.

8. Brand New Vehicles 

Buying a brand new car is one of the worst financial decisions you can make. New vehicles depreciate rapidly, losing 20-30% of their value in the first year, although this has changed in recent years depending on the area, so check new vs. used prices. 

Instead, consider purchasing a reliable used car to save thousands.

Conclusion 

Eliminating or cutting back on these 8 discretionary purchases can free up significant cash flow that you can then redirect into building wealth through savings and investments. Small lifestyle changes like these can make a big difference over time. 

Watch this video about the 8 things you should never invest in: