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- 20 Things You Should Not Waste Your Money On, According to Ramit Sethi</p>
<p>Heather TaylorJuly 22, 2025 at 10:20 PM</p>
<p>©Ramit Sethi</p>
<p>There are some items you should never buy because, according to money expert Ramit Sethi, these items are quietly draining your wealth. This is true even of purchases that seem completely normal, but they all add up and can ultimately cause you to waste more than $700,000 over the course of your lifetime.</p>
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<p>Sethi recently shared a YouTube video revealing the top 20 things you're better off not buying and where it's savvier to invest the money instead. Let's see which 20 purchases are actually wastes of money.</p>
<p>Hispanolistic / iStock.comBuying a Car Based on Monthly Payments</p>
<p>When you buy a car using monthly payments, Sethi said car dealerships have the ability to stretch the loan, sneak in add-on purchases and charge you more money overall.</p>
<p>Instead of considering your monthly budget, Sethi recommends deciding on the total price you can afford before you visit a dealership. This amount should factor in the vehicle's sticker price, gas, insurance, parking, maintenance and registration. Once you know your number, you can start negotiations.</p>
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<p>FatCamera / Getty ImagesTrendy Fitness Equipment</p>
<p>How often do you exercise on the Peloton bike you spent thousands on during the pandemic?</p>
<p>Sethi recommends forming better health and wellness habits, like going for a short walk every morning or joining a gym, to create consistency with your fitness goals. Once you're ready to use the Peloton gathering dust at home, you'll have proven you will use it.</p>
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<p>Strelciuc Dumitru / iStock.comNew Skincare Products Purchased Every Week</p>
<p>Many people keep spending money on expensive new skincare, beauty or grooming products because they think it will act as the miracle their skin needs. Rather than buy a new product(s) every week, Sethi recommends picking just one and committing to using it for 30 days. If it doesn't work, try something else.</p>
<p>You don't have to shop exclusively at Sephora or another beauty retailer for these products either.</p>
<p>zoranm / iStock.comExtended Warranties on Electronics and Appliances</p>
<p>An extended warranty may sound like a responsible purchase, but Sethi cites a statistic that says most electronics and appliances don't break during the extended warranty period.</p>
<p>A better approach is to buy from reputable brands, read the customer reviews, understand the store's return policy, skip any upselling and check your benefits if you're making this purchase with a credit card. Shoppers may not realize some credit cards automatically double the manufacturer's warranty.</p>
<p>AdrianHancu / iStock.comImpulse Buys on Amazon</p>
<p>It's super easy to add impulse buys to your Amazon shopping cart only to forget about using them two days after they've arrived.</p>
<p>Time to make a "rich life" pivot where you get clear on your money dials. Consider the specific ways spending money brings you the most joy and turn those dials all the way up. When you do this, Sethi said, you'll be able to cut back on impulse purchases that don't matter and concentrate on those who do.</p>
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<p>SolStock / iStock.comLuxuries Disguised as Investments</p>
<p>A $700 blender, a $2,000 mattress, personal trainer and expensive skincare are not investments. Rather, these are all luxuries disguised as investments and ones many attempt to rationalize as an investment in their lives.</p>
<p>However, Sethi said he defines an investment as something that has the potential to produce a financial return. While everything mentioned above could improve your lifestyle, that doesn't make it an investment.</p>
<p>If you find yourself regularly falling for this trap, Sethi said to ask yourself, before buying anything that costs $100 or more, whether you can afford it. Then, follow the 30-day rule. If you still want it after 30 days and it fits your spending plan, buy it.</p>
<p>gorodenkoff / Getty ImagesBuying Cheap Now, Promising To Upgrade Later</p>
<p>While some things are OK to buy cheap, Sethi said you may want a higher quality version of those items that are the most important to you.</p>
<p>Marvin Samuel Tolentino Pineda / Getty ImagesSubscriptions</p>
<p>This is specific to any just-in-case subscriptions — the ones you signed up for once and never really use but hang onto in the event you may use them again.</p>
<p>Meanwhile, you're still paying for it. However small these monthly leaks may appear, Sethi said they're silently draining your checking account. The real cost of these charges over time? You're missing out on being intentional with your money. Review your statements, decide which subscriptions are most useful and ruthlessly cut out those you don't use.</p>
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<p>jetcityimage / iStock.comTrucks You Can't Afford</p>
<p>Many people Sethi talks to are in deep financial trouble because they bought trucks they cannot afford. More often than not, they made their decisions based on monthly payments. To avoid falling into this trap, Sethi recommends getting clear on your needs before making a big-ticket purchase.</p>
<p>nd3000 / Getty Images/iStockphotoEmotional Spending Disguised as Self-Care</p>
<p>Self-care is great, but only if you can afford it. If you can't, Sethi said, this is stress spending.</p>
<p>Want to do it the rich life way? First, define your real version of self-care (whether that's a massage, manicure or working out at a specific gym) and look at your conscious spending plan. Decide where this money is coming from and make a plan to set money aside and really treat yourself.</p>
<p>dulezidar / Getty ImagesOverly Complicated Investments</p>
<p>Cryptocurrency, infinite banking, tax shelters — there's a lot of complexity in personal finance. Usually, these strategies are made complicated on purpose. Complexity is a distraction — and a tactic scammers use to prey on those who feel left behind.</p>
<p>The truth, Sethi said, is anyone who tells you a specific investment is a sure thing is most likely lying to you. Same with someone who claims they can get you 20% on returns. Follow the tried-and-true ladder of investing, like maxing out your Roth IRA and 401(k) match, instead and stick to what works.</p>
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<p>Ziga Plahutar / Getty ImagesPersonal Finance Apps You Don't Understand</p>
<p>If these apps aren't telling you where your money is going or when you'll be debt free, they're acting as digital clutter, not clarity.</p>
<p>Sethi recommends simplifying your systems and tracking four key numbers that move the needle: fixed costs, investments, savings and guilt-free spending.</p>
<p>gradyreese / Getty ImagesAspiration-Fueled Shopping</p>
<p>A person who buys a Porsche is not buying the car as much as they are buying the fantasy of a better version of themselves.</p>
<p>When it comes to aspiration-fueled purchases, Sethi said you need to get honest with yourself before making them. If you already have what you need to take action, you probably don't need to buy anything else.</p>
<p>PeopleImages / Getty Images/iStockphotoTreating Your Primary Residence as an Investment</p>
<p>According to Sethi, too many people convince themselves that buying a home equates to buying an investment, when they're really buying a luxury.</p>
<p>"Between mortgage interest, property taxes, maintenance fees, closing costs and many other things, your house might be a great place to live, but it often is a way worse investment," he said.</p>
<p>Sethi, who has rented for more than 20 years, recommends getting honest with yourself before putting in an offer. Run the numbers first and then consider the non-financial factors associated with homeownership — like living in a particular area.</p>
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<p>Drazen Zigic / iStock/Getty ImagesPaying a Financial Advisor a Percentage of Your Assets</p>
<p>Many financial advisors charge for their services under AUM, which stands for assets under management. As harmless as this structure sounds, Sethi said it means the advisor takes a 1% fee. This nominal fee will grow and grow, especially as your portfolio grows, to consume 28% of your total returns.</p>
<p>Ultimately, Sethi said financial advisors are not here to beat the market for you. Consider learning the basics of investing to run the numbers yourself or work with an advisor who charges hourly fees or per project.</p>
<p>Rawpixel / Getty Images/iStockphotoHome Renovations You Think Will Pay Off</p>
<p>Home renovations are a luxury, not an investment, and most don't pay for themselves, according to Sethi. As such, the rich life approach he recommends is to renovate for joy and not return on investment.</p>
<p>Whatever you want, whether it's a new faucet or finished basement, admit you're doing it because you want it. Make sure you can afford whatever you're working on, too.</p>
<p>B4LLS / Getty Images/iStockphotoUsing Your Credit Card To Earn Rewards To Justify Overspending</p>
<p>Many Americans are in credit card debt and continue to use their cards to rack up points and rewards. If you're paying 27% (or more) in interest, it just isn't worth it.</p>
<p>Instead, pay off your balance in full every month and create a payoff plan (if you have credit card debt). Then, you can optimize your card for points, perks and cash back.</p>
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<p>RichLegg / iStock.comWhole Life Insurance and Infinite Banking</p>
<p>Don't fall for alternative investments such as whole life insurance or infinite banking. Sethi said these are typically complex, high-commission products most people don't need. The fees are huge and the results are underwhelming.</p>
<p>What if you do need insurance? Sethi recommends sticking to affordable term life insurance. (Remember: Insurance is insurance and not an investment.)</p>
<p>fizkes / Getty Images/iStockphotoOnline Courses You Never Use</p>
<p>You might have had good intentions with these; but, if you didn't do anything with an online course or — worse– you got into credit card debt for it, you definitely don't need to sign up for more courses.</p>
<p>The better approach? Finish what you already paid for, like going to the gym to work out. Once you prove you're able to follow through and want to get better, you'll be able to afford something more premium.</p>
<p>pixdeluxe / Getty ImagesStatus Credit Cards or Airline Loyalty Programs When You Don't Use the Benefits</p>
<p>You might love the look and feel of a heavy credit card or being able to receive priority boarding at the airport; but, if you're not using these perks, you're just paying more annual fees than necessary.</p>
<p>Once a year, Sethi recommends auditing your benefits. If you are not using benefits such as lounge access or free hotel rooms, you don't have to stick with certain cards. You can downgrade to a no-fee card, stop paying for the status you're not using and save several hundred dollars a year.</p>
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<p>This article originally appeared on GOBankingRates.com: 20 Things You Should Not Waste Your Money On, According to Ramit Sethi</p>
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