9 sneaky ways you overspend without noticing

Get wise to the ways companies take your money.

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Key takeaways

  • The convenience of shopping from your phone can lead to small, recurring charges you might not even notice.
  • Even many brick-and-mortar stores are designed to make you spend more.
  • Being more mindful of your habits can help you save.

It's so easy to spend money—sometimes you don't even realize the ways it leaves your wallet. But knowing these 9 ways companies try to get your cash can better equip you to keep it.

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1. Recurring charges and renewals

It's the quick click that makes you a liar: "I have read and understand the terms and conditions." That speedy little agreement may lead to recurring charges and automatic renewals for services. (Remember that $3.99-a-month Spanish dictionary app you activated on a trip to Mexico 3 years ago? You might still be paying for it.)

A recent survey from C+R Research found the average consumer spends $219 a month on subscriptions and services—$133 more than they thought they spent. More than 70% of consumers had set bills to autopay, with 55% of Gen Zers and 48% of millennials forgetting about these subscriptions.1

In fall 2021, the Federal Trade Commission ramped up efforts to stop so-called "dark patterns" that companies use to trap shoppers into subscriptions, services, and auto-renewals.2 The agency requires that signups are clear, consensual, and as easy to cancel as they are to initiate.

Still, pay attention to emails and notifications from companies letting you know that you'll be charged. Set calendar reminders for cancel-by dates, have your bank monitor recurring charges, or consider using an app to cancel unnecessary subscriptions for you.

You can also set preferences for any subscriptions you have through your phone. On an iOS device, go to Settings, click the arrow to the right of your name, then select Subscriptions. It will show a list and the next billing date, as well as renewal dates. Click into each one to cancel or set a renewal preference. On an Android device, go to Google Play, tap your profile, and select "Payments and subscriptions." Tap into a subscription and either cancel or set preferences.

For non-phone-based services, you may have to (deep breath) look closely at your credit card and bank statements. Some of these monthly fees could be just a few bucks, but they add up.

2. Fitness fantasies

Endorphins can make you do weird things—such as taking exactly 1 new fitness class, then signing up for a 10-pack of classes or buying an annual membership. Reality check: Gym memberships are notoriously underused, with 82% of them used less than once a week, and 63% not used at all.3 Canceling such memberships can be more taxing than a workout. You may have to ask for paperwork at the front desk, get it notarized, send it via US Post certified letter, pay a cancellation fee, and/or wait a full month for the cancellation to take effect.

To avoid getting in this spot, go on at least 3 dates with a workout before you commit to a class-pack or membership. See if the gym sells day passes to nonmembers while you figure out how much you'll go. It may be cheaper to buy day passes than an annual membership if you'll go less than a dozen times a year. If you opt for membership, note when your billing cycle starts each month (it might not be the first—or even during the first week), and make any allowable changes you need before then. You don't want to miss it by a day or 2 and end up paying for the entire month.

3. High-hassle returns process

The annoyances run deeper than needing the original packaging. Maybe you only have a few weeks to make the return, or you can only get store credit, or, when online shopping, you need to log in, enter the order number, download a return label, and then print it out. Among millennials, 67% have abandoned a purchase for fear of a difficult return process, in a recent consumer survey.4 Another study found that 90% of online shoppers rarely return items, and among those who kept an item they wanted to send back, 58% said it was because the process was too much of a hassle.5

If a printer is standing between you and making a return, consider buying an inexpensive one. Or find out if the retailer works with a "returns bar" reverse-logistics company. Then you can bring the item—no box, no nothing—to a drop spot at a local store.

4. Gift cards

Gift cards can be a cash drain and probably not for the reason you think. Yes, American adults possess an estimated $15 billion in unused cards, with millennials holding the highest unredeemed amount, averaging $139, a recent study found.6 Turns out, using gift cards can make you overspend too. In a British study, 74% of shoppers who used gift cards said they overspent the card amount by the equivalent of $54.7 If you receive gift cards, try to redeem them promptly—before you forget that you have them. And when you redeem it, bring a game-show mentality to your shopping: spending the closest to the gift card amount without going over.

5. Single-line checkout

At many stores, you have to snake your way through a pleasure path of merch to reach the cashier. That's by design. These single lines can boost impulse purchases by 400% and reduce walkaways by 96%, according to a company that designs these checkout systems.8 Candy and soft drinks rank highest among impulse purchases,9 which might explain why you see enormous bags of gummies alongside socks and jewelry at a clothing store, or a cooler with soda at the home decor store. An older study found that millennials were 52% more apt than other generations to make self-pampering impulse purchases.10 (Looking at you, jade rollers.)

While you wait in line, be your own strict parent and tell yourself to keep your eyes and hands off the candy, coffee mug, and moisturizer.

6. XL grocery carts

Since their invention in the 1930s, grocery carts have gotten significantly bigger, triggering us to toss in more items and spend more. Hand-held baskets limit shoppers to only what they can comfortably carry, which may explain the recent popularity in hybrid baskets that can roll around the store. When you can, avoid taking a larger cart or basket than what you need, and stick to a focused shopping list so you're not tempted to load up on impulse purchases.

7. Caffeinated shopping

You know caffeine gets you ready for the day, but a recent study found that indulging before shopping increases impulsivity, both in the number of items you buy and the amount you spend.11 The next time you enter a grocery store or mall, check out what's right beyond the door—often a coffee shop—and do not pass joe; do not spend $200. If you're jonesing for java, grab it on your way out. The same goes for shopping online; don't caffeinate while you click.

8. Targeted ads

Some ads can follow you around like a puppy. Or maybe it's more like a whole litter of puppies, showing up in your social feed, on banner ads, as promos in your inbox, and even in your friends' feeds. (No, your phone isn't listening to you, but it does know who you message or share an IP address with.12) And in true puppy-dog fashion, these ads can be irresistible. A recent survey found that young consumers find targeted ads more interesting than intrusive and appreciate the convenience of finding out about new products and brands.13

Targeted ads can also influence how you feel about yourself, other research found. For instance, if study participants were told their previous browsing led to getting an ad for a high-end watch, they thought of themselves as more sophisticated.14 That can (surprise!) lead to impulse purchases as you scroll through social media. Sure, you can clear your cookies, clear your cache, and ask apps not to track. But the next time you're about to click from an ad to an e-tailer take a breath … and a screenshot instead of adding it to your cart. Give yourself a day to check online reviews of the seller or the item. Then you can decide if it's worth buying.

9. Convenience upcharges

Credit cards make checkout simple. And stores and restaurants pay for that ease, generally handing over between 1.3% and 3.5%15 of each swiped sale to the card issuer. In most states, it's legal for vendors to add a surcharge to your bill to cover that expense. The maximum surcharge for customers is 4%16—so in some cases the vendor might profit, depending on the credit card you use. Vendors are required to disclose the fee to customers before purchase (at restaurants, look for the notice on menus or on signs near the entry). To save yourself the surcharge—or if the points you'll accrue won't take the sting out of the upcharge—pay the bill with a debit card or cash, neither of which incur fees.

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