Updated on 12.19.15

10 Things You Should Never Pay For

From ATM fees to extended warranties, there's rarely a reason to cough up cash for these non-necessities.

When it comes to getting ahead financially, there are two main schools of thought. One says we should pick up a side hustle, take on a part-time job, or climb the corporate ladder to earn as much money as humanly possible. The other, however, says we should sock away as many dollars as we can — you know, “a penny saved is a penny earned” and all that jazz.

While both strategies can help you get ahead in life, it’s easy to overlook the importance of saving money as a financial goal. After all, saving money and living a frugal lifestyle aren’t nearly as sexy as earning a ton of money, right? When most people think of “getting rich,” flashy cars and diamonds are what come to mind — not cutting coupons and shopping garage sales.

The thing is, saving money is just as useful — if not more useful — than earning extra money. Any dollar you save is one you never have to earn, and you don’t have to pay income taxes on it, either. And at the end of the day, a dollar in your pocket is worth the same whether it was earned or saved.

10 Things You Should Never Pay For

That’s why it’s important to look for new ways to save money all the time. When you’re not paying attention, it’s easy to continue paying for services or items that became free somewhere down the line. And as we all know, there are plenty of items and services that people should never have started paying for to begin with (ahem, like bottled water).

Here are 10 things most people can avoid paying for altogether:

No. 1: Most Extended Warranties

Whether you’re buying an automobile, a television, or a computer, most stores will try to sell you an additional warranty that will replace your item for a certain length of time after the manufacturer’s warranty expires.

Most of the time, these warranties offer the worst of both worlds, however — overpriced coverage and a claims process that make replacement impossible. Why? Because these warranty companies exist for one reason: to make money.

“The only way a warranty company can make money is to bring in more than it pays out,” says financial coach Debbi King. “This means that you are going to pay them more than they are going to give you.”

Instead of forking over the money for an extended warranty, King suggests saving the replacement cost for your item instead. “If something happens to your item or your car needs to be fixed, use the money you would have given to them to pay for a replacement/repair.”

And if you don’t like that strategy, you could always see if your credit card offers extended warranty coverage on big-ticket items. Some of the top rewards cards out there do, and they offer this coverage for free.

No. 2: ATM Fees

In a world where most banks offer a huge network of free ATMs, it’s pretty amazing that people continue to pay to access their own money. A little planning and the wherewithal to swing by your free ATM while you’re out can go a long way toward helping you save. And if your bank doesn’t offer very many free ATMs, you could always change banks, right?

Kendal Perez from Coupon Sherpa says most people can avoid these fees altogether if they analyze their cash needs weekly and withdraw that money with no out-of-pocket cost whenever possible.

“I don’t understand why anyone would pay upwards of $5 to access their money,” she says. “Withdrawing cash from your bank before you go or adding a cash withdrawal to your grocery store or drugstore purchase gives you free access to your funds.”

atm fee

With a little forethought, you should never have to pay an ATM fee. Photo: InfoCash

No. 3: Coupons

Coupons are supposed to save you money, right? So why do people buy them? Sadly, Googling “coupons for sale” will turn up a gaggle of coupon resale sites where people actually turn a profit on coupons that were free to begin with.

“I’m always blown away that people actually pay for coupons on eBay,” says savings expert Kyle James from Rather-Be-Shopping.com. “What the hell?”

Free coupons exist everywhere on the Internet, says Kyle. And if you do a Google search for “[name of store] coupons” instead, for example, you’ll be inundated with free offers.

Another tip from Kyle: “If the store you need a coupon for doesn’t currently offer one, no worries — simply hit up their live chat feature via their website and politely ask the operator for a coupon.” If you ask politely, Kyle says this trick works around 80% of the time.

No. 4: Rental Car Insurance

If you rent a car frequently, you’ve probably already checked whether your personal auto policy covers you in the event of an accident or injury. But did you know your credit card might offer additional rental car coverage as a cardholder perk? It’s true, and it’s even better than you probably realize.

For example, the Chase Sapphire Preferred Card offers primary rental car coverage as a cardholder perk, and you don’t even have to pay for the privilege. This enhanced level of coverage can work in place of your own traditional auto policy, says Chase. According to the Chase website: “Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad.”

Other popular travel cards also offer this coverage, as well as secondary collision damage waiver coverage. Before you rely on your credit card’s policy, make sure you know what it is and how it works. Either way, you should never have to pay for it.

No. 5: Cable TV

Thanks to a slew of new technologies, traditional cable television packages are on their way out — or at least they should be. If you’ve ever heard of Netflix, Hulu, Sling, or Roku, you know exactly what I’m talking about.

We’ve written about this multiple times, but the truth is, most content is available legally through other, much cheaper means. “The average person has no need to pay for cable TV at this point, says Chris of Cut Cable Today, a.k.a. “Mr. Cable Cutter.”

To see if you can make it without cable, Chris suggests trying these new technologies, starting with Sling TV, which offers access to ESPN, AMC, CNN, HGTV, and many other core cable stations normally reserved for those who pay a lot for the privilege.

Other options include buying a Roku box, then hooking it up to a variety of free or inexpensive streaming services. Or you could even break out the dinosaur of television history: an antenna.

“As long as you live close enough to town, odds are you can get good reception of the major networks with an antenna,” says Chris. “Over 90% of the top shows come on one of the big four (Fox, CBS, ABC, NBC), plus you’ll get pretty much all the football you can handle.”

Whichever way you go, you shouldn’t have to pay for a full-fledged cable package for long. Chances are, one of the newer (and less expensive) technologies out there will work just fine if you give it some time.

No. 6: Your Credit Score and Credit Monitoring

No one should ever pay for their credit score or credit monitoring, says Harrine Freeman, financial expert and owner of credit restoration company Freeman Enterprises. Using AnnualCreditReport.com, says Freeman, consumers can “obtain a free copy of their credit reports once every 12 months.”

And since you can get a free copy of your full credit report from all three credit reporting agencies — Experian, TransUnion, and Equifax — that means you can get a snapshot of your credit every four months. That’s sufficient for most people who need to keep an eye on their credit report to ensure nothing has gone awry.

Further, sites like Credit Karma and Credit Sesame offer free services such as ongoing credit monitoring and monthly credit updates. You don’t have to pay a cent to see an estimated credit score each month, and you can score all of these perks just by signing up for a free account.

No. 7: Credit Card Interest and Fees

Credit cards can be valuable tools if used wisely, but absolutely destructive if not treated with care. Either way, you can completely get out of avoiding credit card interest (and fees) if you’re disciplined enough. You just need to get into the habit of paying your credit card in full every month, and even a few times per month if that helps.

·        Related: Eight Tips to Make Credit Cards Work for You, Not Against You

According to Andy Brantner, Certified Financial Planner from StartInvestingOnline.com, you shouldn’t really have a credit card if you can’t manage charging only what you can afford to pay off every month anyway. Further, there are plenty of excellent 0% APR balance transfer offers available for people already in debt. If you want to dig your way out without paying interest, these offers are definitely worth pursuing. (Read Best Balance Transfer Cards for 2015.)

No. 8: New Clothes

In a world where secondhand clothes — and even upscale attire — can be purchased for pennies on the dollar, it’s pretty amazing that people still buy new (full-price) clothing on a regular basis.

Chad Reid, director of communications at JotForm, sees this phenomenon in his area all the time, and it absolutely blows his mind, he says.

“I live in a big city, and maybe I’m spoiled, but there are so many thrift shops with awesome, cheap duds that paying for new clothes somewhere would be foolish,” he says. And yet people do it year in and year out — even changing out their outfits to keep up with emerging (and often fleeting) fashion trends.

We’ve written on this topic here at The Simple Dollar almost ad nauseum, but only because it’s that important. Imagine never buying a new piece of clothing again, yet still being as stylish as your friends — and saving thousands in the process. If you’re interested in exploring what it means to buy used clothes instead of new, these posts can help:

No. 9: Books (Even Audio and e-Books)

While most people know you can check out books for free at the library, knowing this and actually doing it are two entirely different things. It’s far too easy to pick up a book at the airport, grocery store, or Barnes & Noble, only to forget about it completely once you’re done.

The thing is, your local library offers plenty to keep you coming back for more, and most selections are no longer limited to physical, printed books. Most modern libraries now offer Kindle editions of many of the books they have in print, along with other media like video games, movies, and documentaries.

And let’s not forget audio books, says Paul Moyer of SavingFreak. “The vast majority of people only listen to the book once and spend way too much on them,” he says. “Check with your local library, since many now have downloadable books or at least books on CD that you can check out.”

No. 10: Checks and Banking

If you’re paying for checks, forking over a monthly fee to keep a checking or savings account, or paying a fee to use your debit card, it might be time to find another bank, says financial writer Trever Ewen.

“Online banks and credit unions want your business,” he says, “and they will give those services for free to get it.”

Thanks to increased competition and the introduction of Web-based and mobile banking, free checking accounts can be found almost anywhere. If you want a bank that rewards you for entrusting them with your money, look for a new bank altogether. You shouldn’t have to pay them to keep your money for you.

Final Thoughts

While it may feel like life is getting more expensive, there are plenty of things we could cut out if we wanted to. As Trent Hamm expressed in his post on “Unnecessary Necessities” recently, as humans, we tend to elevate certain “wants” to “needs” over time — creating havoc in our lives and emptying our wallets in the process.

The painful truth is this: Almost all expenses are negotiable to some extent. While you must have a roof over your head, food in the fridge, and your basic needs taken care of, almost everything else in your life is optional and even avoidable if you are able to tell yourself “no.”

And when it comes to truly getting ahead in life, identifying things we shouldn’t have to pay for — and eliminating them — is one way to speed up the process.

What is the one thing you never pay for? How are you cutting your expenses this year?

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