There are many ways that people save money, and many people are very effective and saving loads of money because of them.

But this list details 5 ways people try to save money that just are not worth it. They either are ineffective or have negative consequences that outweigh the savings.

1. Stay in and Watch TV

When presented with the option to go out, some people decline with the idea in mind that they’ll save more if they sit on their couch. It’s true, they won’t be temped to spend money on drinks or food, but what they don’t realize is that they’re also missing out on experiences which brighten their day and interactions that lift their spirits. It’s hard to put a price on human interaction and the value of going out with friends, but in my opinion, it’s a no-brainer.

2. Skimping Out on a Bill

When you do go out with friends and buy a sandwich and drink, don’t just pay for the actual price of your food, but throw in extra for tax and tip. Sure, it’s very likely that someone else will pick up the extra two dollars, but if you cheat people out of money, it will come back to bite you. It may seem like you’re being smart at the time, but is your friends harboring ill will towards you worth it?

3. Passively Looking for Great Deals

When there’s something you need and you find a coupon, your action is rewarded in a lower price. But when you constantly check sites for great deals, and when the items you see are for things you don’t really need, you could get yourself into trouble. You’ll very often see such great deals that you’ll be more prone to make purchases. If it’s not something you’re already looking for, no matter how great of a deal it is, you’ll spend more if you buy it.

4. Eating Fast Food

That burger may only cost you a dollar and those fries and soda may fill you up for a cheap price, but you may be costing yourself in the long run. Eating unhealthy food may have future consequences that include higher medical costs. It may cost an extra dollar now, but making food for yourself at home could benefit you in a number of ways.

5. Consumer Traps

When buying bulk means you have extra you won’t sure, it’s not really such a great deal. When “get one free when you buy 4″ means you’re buying 4 when you only wanted 2, it means you wasting money, not saving it! Think really hard before you get that “great” deal that’s making you think you’re such a genius.

What other saving tactics are effective but simply not worth it?

Daily Yakezie Short Carnival:

5 Lessons Learned from My Encounter with a Financial Advisor @ Personal Finance Journey

I Tried To Shop At Whole Foods But I Couldn’t Make Myself Do It @ Out of Debt Again

I’ve mentioned before that I use SmartyPig as my savings account (as well as ING Direct so that some money is immediately available), but many people are unfamiliar with SmartyPig, so I thought I’d give my thoughts after using it for a few months.

GOOOOOALs

For those who don’t know, SmartyPig is a savings program that is unique in that it is designed to help people save for specific goals. Instead of putting money into a savings account and letting it sit there accruing interest, SmartyPig members set up their goals and contribute regularly, with the option of letting friends contribute, too (we’ll get to that in a minute).

I use my SmartyPig account for various goals and automatically contribute every two weeks.

The 2.01% interest rate is much higher than any traditional bank, and if you are using this for savings, it’s just a little bit of a process to withdraw money, so you’re less likely to supplement your checking account. That’s not what savings is for!

Social Funding

One thing about SmartyPig that I’m not a fan of is the social aspect. If you choose to share your goal, friends and family can provide financial support. For most people banking is private and asking friends for money seems…weird. Sure, you can let people know that you are saving up for a trip to Europe, but letting them know that you are accepting donations just doesn’t seem right. I turned off this option for my account. My friends can do what they want with their money without feeling pressured. I use it more as a bank than as a way to connect with friends and beg for their money.

Withdrawing

The withdrawal process for SmartyPig is very interesting. Instead of being able to transfer money in and out like a regular bank, users must close their goals before withdrawing. This doesn’t matter much because these goals can be opened again, but the automatic contributing must stop.

Then there are 3 withdrawal options:

• ACH Transfer – Send money back to your savings account
• Debit Card – They’ll send you a debit card that can be reloaded with money from future goals
• Retail Gift Card – Get a retail card with up to 112% of the money in your goal on it.

The retail card is where it gets interesting. With Amazon, Macy’s, and Barnes & Noble among the retailers, you can put all or part of your balance on a card to get the most out of your cash.

Of course, only use this option if you need something anyway! Don’t just get it because you think it’s a smart financial move!

Give It A Shot

Head over to SmartyPig and take a look around. It’s definitely worth a closer look, and my experience so far has been fantastic. No complaints, and who doesn’t love earning extra interest on their money?

What bank do you use? What are the pros and cons of your savings accounts? Would you ever use the social aspect of SmartyPig?

Please head over to Free Money Finance and vote for me in the current games of the March Money Madness contest. My post is “How to Save Money on Wireless Carriers”. Thanks!

Every morning, from as far back as I can remember until I left for college, my parents would have a cup of coffee in the morning. Occasionally they would have a cup in the evening as well, and I can only imagine how many cups they drank at work (My mother is a fourth-grade teacher, my father occasionally deals with insane criminals).

I hate the smell of coffee. I’ve never had a cup in my life. Out of the four sips I’ve ever taken, I’ve wanted to vomit after each one. I don’t support Starbucks. In fact, I boycott Starbucks as much as possible. It’s not hard considering that I don’t drink coffee, but it gave me a great excuse when my mother asked me to go out and get her a cup.

Dropping the Habit

I tried everything to get my parents to get rid of the awful stench at home. I told them it would ruin their teeth, I told them it was a gateway to opium, and I told them they wouldn’t be able to retire because of it.

Clearly none of my efforts worked, but recently my mother started drinking instant coffee exclusively and it made me think about that third excuse I gave them: how much drinking coffee really cost them.

Calculating it Out

My conservative estimate was two cups of coffee a day. Every single day. For 20 years. I’m sure they drank more than two cups sometimes, and I know they did it for more than 20 years. But we have to start somewhere, and I don’t want to be the guy who completely blows things out of proportion to try and prove a point. This is not a scientific study. Actually, I haven’t done the calculations yet, but here we go:

A few more assumptions:

• Each week consisted of 11 home-brewed cups and 3 cups at Starbucks (or Dunkin Donuts, or wherever).
• The average cost of a pound of coffee is $10 and provides 32 cups of coffee.
• The average cost of a cup of coffee is $2. My parents would laugh at people who got the “tall.”

So the average week was 22 cups of home-brewed coffee and 6 cups of store-bought coffee. That comes out to $6.87 for home brewed per week and $12 for store bought, for a total of $18.87.

My first thoughts are WOW, that’s a lot of money for 6 cups of coffee. The home-brewed stuff was a bargain!

Their coffee habit was costing them about over $75 a month, or about $985 per year, or $19,683 over 20 years. Damn.

But how much would it have been for the instant stuff? It costs about $7 for a can, which makes 21 cups. So $0.33 per cup. Slightly more than home brewed. Still, it comes out to $486 per year, or $9,733 over 20 years.

After all of this, it looks like $486 per year for coffee is rather insignificant. If you do anything for 20 years, the costs are going to look high, but I honestly expected the costs to be higher.

Early Retirement? Not Quite

My conclusion is that my parents’ drinking habit didn’t cost them an early retirement. My focus should have been on them brewing their own coffee instead of buying it 3 times a week, but the trade-off of having that stench in the house more often may have been too much for me.

The main takeaway is that people are getting ripped off every morning when they drink coffee. There is barely any difference between home-brewed and instant coffee (home-brewed is actually cheaper!), but there’s a HUGE difference between home-brewed and store-bought!

Brew it yourself! Why pay $2 per cup when you could pay $0.33? Is the convenience worth the 500% markup?

I spoke to my grandmother last week (she reads the blog on her snazzy new computer she just got) and she told me the advice her boss gave to her many years ago.

He said that before you pay the bills and before you go spending your paycheck, pay yourself first. Put 10% aside and then go pay the rent, utilities, etc.

I’ve heard this advice a million times on various blogs, but as much as people come up with creative ways to save a few bucks on taxes or search the weekly circular to save a few cents on pasta, nothing can replace the best way of saving and making sure we have enough money in the future.

Sure, you may make more in the future as you get a better job and more opportunities open up, but saving now can have a lasting impact. There is always enough to put a little something away. Even if you think that money won’t make much of a difference, it definitely will.

I’ve seen this graph several times, but for those who haven’t seen it, look at how much of a different putting money aside now is compared to waiting.

Taking a look at the numbers, it’s astounding how much of a difference paying yourself first makes. Consider this example:

Alex is 25 and saves $5,000 a year for 10 years, and after 10 years, has a cool $73,000 in his bank account from his $50,000 in contributions. Then he doesn’t contribute another cent until retirement.

John is 25 but decides that he’ll be able to make up the difference later. he waits 10 years, then contributes $5,000 a year for the next 30 years, for a total of $150,000 in contributions.

Who do you think has more money at age 65?

Despite contributing 3 times as much as Alex, John has about $55,000 less at retirement, assuming a 7% return on investment.

And what happens when Alex doesn’t stop saving at age 35, but keeps investing $5,000 a year for 30 more years? He ends up having over twice as much as John. Can you believe that those ten years delaying cost John over $600,000?

There really is no replacement for saving. As you get older and make more money, you will also have more responsibilities and saving will be just as hard. So do yourself a favor: start saving TODAY by making your “pay yourself first” bill more important than than the rest, and you’ll be doing yourself a half a million dollar favor.

My sister-in-law owns an iPhone, but when she went away on a business trip a few months ago, took a cheap international cell phone her mom had and left the iPhone at home for the week and a half she was away. My brother, Not thinking that his actions would have any consequences, took his sim card and put it in his wife’s iPhone and suddenly he had thousands of apps at his fingertips.

He was probably pretty amused by it for that week and a half, but what he didn’t realize is that if you’re going to use an unlimited service, you should probably sign up for the unlimited data plan. For those 10 days he was happy as a clam, but every time he checked his email or downloaded an app, it was costing us money. And it wasn’t just a few cents here or there, it was over $900 for the 10 days he had the phone.

When the cell phone bill came out, I saw a $600 overage and realized something was wrong. I scanned the bill and found that one number used a ridiculous amount of data. I called my brother make sure it was a mistake (surely he didn’t actually use that much data), and when I told him that our account was messed up and it said he had an iPhone, he paused for a second and said, “O crap.” He really did it. I’ve had my share of negotiations with AT&T, so I told him not to worry, that it wouldn’t be a big deal, and that I would take care of it. But first I called him a few names and made fun of him quite a bit.

I called up AT&T to explain what happened and get the charges reduced, and got a customer service representative who listened to my problem and agreed to try and resolve the situation. The conversation went something like this:

Customer Service Representative: Hi, my name is Tracy, how can I help you today?

Me: Hi, I just got my bill and saw that there are some ridiculous overages for this month, so I wanted to try and get that reduced.

Tracy: I’ll be happy to help you. It looks like the 0480 number has a lot of data usage this month.

Me: Yah, my brother put his sim card in an iPhone and didn’t realize that he should have signed up for a data plan first. Is there a way to remove the charges?

Tracy: Well, unfortunately it looks like the charges are valid because he didn’t sign up for a plan before the billing cycle began, so there’s not much I can do. If he had called up in advance to get a data plan before doing so, it would have only been the $30 cost of unlimited data for the month.

Me: Yah, I know that the charges are technically valid, but if you looked what happened, it was obviously a mistake. He doesn’t have an iPhone usually and it was a temporary mistake. We’ve been loyal customers for 10 years and we’ve liked our service a lot, so I’d hate for this to give us a bad impression of AT&T. Is there anything you can do? I’d like as a courtesy to have the bill changed. Can you apply the $30 a month data package retroactively?

Tracy: Well, we do appreciate your business, so as a one-time courtesy, this is what I can do: While I can’t remove all the charges, I can retroactively apply a $30 data plan to that line so you’ll be charged only the $30 and not $600.

Me: Wow, that would be great. You just saved us $570!

Tracy: It’s not a problem. Actually, I can apply the data plan from the date he started using data, which was 7 days before the end of the billing cycle, so the charges will be prorated. So for those 7 days, it comes out to $7.32.

Me: Thanks, I really appreciate it. Since we just realized what was happening, can you do the same thing for this month as well? He’s been using it for the past few days, while the bill was coming out, but after the billing cycle started, so I’m sure he’s racked up some more charges.

Tracy: I’m unable to remove charges from a bill that hasn’t come out yet, but what I can do is keep the data plan on for this month. When your next bill comes out, you will see the charges on the account, so you’ll have to call back next month and a customer service representative will see my notes and make the adjustment for you.

Me: That’s not a problem. Thanks so much, I really appreciate you helping me out!

I called my brother and told him that I got the bill reduced to $300 and that he should send me a check because I already paid the bill. Just kidding. He was pretty relieved that he didn’t cause our family such a large, unnecessary charge. He felt bad about using the data, so he took out the sim card and put it back in his regular flip phone.

I called up AT&T again to have the data package removed since he stopped using the iPhone, and the prorated charges for the month totaling just $3. Then, when the next bill came out with $300 in data charges, I called up again, told them to reference the notes, and they were able to credit our account. So instead of paying over $900 for 10 days worth of data, we paid only $10.

While I like to think that I have special powers and just plain good at negotiating, the truth is that I’m nothing special. Customer service representatives are there to help you. They may not always jump at the opportunity to reduce your bill, but ultimately they are willing to help if you ask the right questions. If you think you’re paying too much for your phone, cable, or internet, call up and ask if they have any promotions that could save you money. You definitely won’t save money by sitting on the sidelines.

Wednesday marks 6 months at my job and makes me eligible for the second half of my signing bonus. It’s nice to know that I am now a full employee and eligible for all of the benefits as everyone else. I’m actually not sure which I’m more excited about. But what should I do with the extra money? It’s not much, but it is enough that I can spend it in a variety of ways and get a lot out of it.

Decisions, Decisions, Decisions…

I can:

• Stick it all in my emergency savings and build up the $5,000 fund about 2 months sooner than expected.
• Buy a decent new HDTV for the apartment. Or clothing
• Pay down some of my debt.
• Invest it.

I am already on a regular investing plan and feel that bumping that up isn’t necessary. If I’m going to go that route, I might as well pay off some of my student loans. However, my student loans are at $23,000 and a small hit to that won’t make much difference in my life. Paying it off 5 months early doesn’t sound like much when that 5 months will happen many years from now.

I want to spend it in ways that I’ll notice, as a bonus to myself, but I don’t want to spend it all in one place and come away with nothing.

I’ve decided that I am going to use some of that money to buy some new clothes. I need a new pair of work pants and a few new shirts, which I will definitely enjoy wearing. I don’t need to dress too nicely, but I like the thought of looking clean and professional. 30% of the windfall will go towards clothing.

I also am interested in building up my emergency fund a little more. I would be very happy to know that every month, my funds can go towards other goals than simply protecting myself in case of an emergency. So I will be sticking the remaining 70% there and should be fully funded by April.

By using some of my windfall for clothing, I will be congratulating myself on a job well done while not going overboard and spending it all. I think it’s important to spend money on things that make us happy, and this gives me the clothes I want now and will likely reduce future clothing expenses in the coming months because I will already have what I’ve been looking for.

By putting the other 70% of my bonus in emergency savings, I’ll be that much closer to my goal and when I look at my accounts on Mint, I’ll be pleasantly surprised to see that the money is making a difference in my life.

If you had $1,000, $5,000, or $10,000 deposited in your bank account today, what would you do with it?

Standing in at 5 foot 6, weighing a perfect 135 125 pounds, a strong student majoring in Hearing and Speech at the University of Maryland, is Lauren Berger! She has been recruited as a guest blogger because of her amazing insights and experiences with saving money.

My mother is the QUEEN of talking. Now you may be thinking to yourself, “no, you’re wrong, my mother can out-speak your mother any day!” but you’d be wrong, she would probably win an award for longest running filibuster, talking at all hours of the day; anytime and anywhere she can. So it wasn’t at all surprising to me that she was using her phone in the bathroom. What did shock me though, was that, my normally well-coordinated and multi-tasking mother managed to drop her brand new phone into the toilet.

Now you might be asking yourselves, “What does this have to do with personal finance?!” And, normally I would say nothing, but in this case, everything.

After reading that phone insurance is a scam, my family decided to forgo phone insurance because our phones were automatically covered for the first year. However, sadly for us, this first year of insurance does not cover water damage…or more specifically, toilet water damage.

Luckily though, when Daniel heard what happened, he suggested a tip that he heard might work. Stick your soaked phone and battery into a bag filled with rice for about 10 hours. Fortunately for us, we had a giant bag of rice sitting in the pantry just begging to be used, like the sad mop in the Swiffer commercials “…baby come back…” sorry anyway:

We removed the battery from the phone, stuck both pieces into a plastic bag, and filled it with white rice. The next morning, my mother went to use her phone and magically, POOF, it was as good as new! Who knew? Rice cures water damage, by soaking up all the fluid! So stop wasting electricity by blow-drying your wet phone or wasting money by buying insurance on your phones and save your pockets and our planet one waterlogged phone at a time.

A few months ago, Lauren was due for a new pair of sneakers, so she went on Zappos and picked out the pair she wanted. I took a look, and told her I would find her a better price. Instead, she got impulsive and bought the shoes without even letting me find a coupon. I was a little annoyed because I figured that she could have done better.

Generally, I’m a big supporter of waiting before making purchases. For electronics, waiting is almost always a good idea. Prices always decrease, and if you wait a few weeks, you can almost always find a sale on the item you want.

Turning back to our sneaker example, it turned out that Zappos did in fact have the best price on that specific shoe. Plus, their overnight shipping (she a VIP) meant she got the shoes 3 or 4 days before she would have otherwise gotten them. So, Lauren: You were right. This time. But this is the exception. Well, buying airline tickets is usually the exception. The best deals for that are usually found at least 3 weeks before the date of travel.

But I still think that generally, it’s best to be diligent with your purchases. Find a coupon, find free shipping, wait for a sale, and you’ll get the satisfaction of knowing you got a great price.

The other advantage of waiting is that if you wait 3 days and realize that you don’t really need that new video game, you won’t have that buyer’s remorse. You’ll be able to stick that credit card back into your pocket and save yourself from buying something you didn’t truly want.

Are there times when you waiting too long would actually cost you money?

This time of year, lots of people have gift cards for various stores. This can lead to losing the cards, not using them for a year, or using them, but buying something that exceeds the amount on the gift card.

Here are some easy ways to get the most out of your gift cards:

1. Keep Track Of Them

Keep them in a drawer, an envelope, or your wallet so they are all located in the same place. If you leave them all over the house, you are bound to lose track of your cards and let them go to waste.

2. Buy necessities

Don’t buy just anything with your gift cards. Instead, start with what you would already have bought. With a Target card, restock your shampoo or buy groceries. This essentially turns your gift cards into cash, which is what you honestly wanted anyway.

3. Buy On Sale

Use your card before the post-holiday sales disappear. Don’t wait until February when the prices will go back up. This year especially, stores won’t have as much excess merchandise because they began the season with smaller inventories.

3. Stay Under Your Budget

Some people say that leaving $2 on your card is just a waste of money. I say that making a $60 purchase with a $50 gift card is a waste of $10, so try to get the most out of your cards, but don’t spend extra money on the transaction if it means you have to pay for your own gift.

4. Trade, Sell, Or Regift Them

If you don’t need your gift cards, try regifting them. Maybe someone else can get the most out of it. If not, head over to thegiftcardtrader, cardhub.com, or plasticjungle.com and try to trade your card for one you actually want, or sell it at a discount and get cash in your pocket.

Today, I learned an important lesson about negotiating. A family member asked me to help her with her AT&T bill because she thought she was spending too much on her phone service, and after taking just a quick look, I realized that there were savings of $80+ just by cutting out unnecessary services. I’m not talking about optional services; it’s not my job to judge how people spend their money, if they think browsing the Internet on their phones is necessary, that’s their prerogative.

The $80 in savings was based on simply dropping services that were on the account but were never used. 3 of the accounts on the family plan were to enable international calling, even though nobody had been out of the country in the past 6 months. One account had unlimited Internet usage on it, although that person never used the service, and the family had 10,000 rollover minutes because their 3,000 minutes-per-month plan was simply too large.

By activating the free AT&T A-List feature (free calls to any 10 numbers on any network) and decreasing the monthly service to 2,100 minutes, they were able to save $30 each month. The international plans were dropped, saving another $15 per month (plus another $40 for charges from previous months that they were able to drop), and the Internet savings added another $10. All that adds up to $55, just by looking over the bill! I encourage you to look over your monthly bills every few months, there could be big savings just by dropping unused features!