Idiot tax: Eight ways to waste your money

We all throw money down the gurgler. But some Kiwis have far higher chances of getting a Darwin Award for stupidity by paying too much idiot tax than others. Technically ‘idiot tax’ is spending on Lotto. Your odds of winning Powerball in New Zealand are 1 in 38 million per line. Yet the same money invested in a KiwiSaver growth fund from the age of 25 to 65 would add up to $128,000 after tax. Stop wasting your hard-earned money in these pointless ways: 

1. Lottery tax:
   so you think you’re going to get rich quick? If you’re convinced you’re going to win you’ve succumbed to gamblers’ irrationality. Why not be happier with what you’ve got in life already and save that money for your future? If you are going to buy a lottery ticket occasionally, make sure you fill the card in yourself and pay the bare minimum. That’s $4.80 currently for a ticket including four lines and Powerball.
2. Speeding fines.
   Ker-ching! You’ve just been snapped by a speed camera. And it was the third time in a month! Some people never get fines. Others feel hard done by and argue it’s a government con about revenue gathering. Really the police are penalising people who decide for themselves when to obey road rules and when not to. Guess what? You can choose to drive within the law and avoid this idiot tax.
3. Interest on hire purchase.
   I did the maths for a $1,999 MacBook Air bought on Flexirent. Over three years it would cost $3,778.34. That’s a mighty expensive MacBook with $1,700 of idiot tax thrown in.
4. Carrying a balance.
   Did it occur to you that if you carry a balance on your credit card you pay way more than everyone else on whatever it was you bought on your card? People can and do learn to live without credit. It’s a state of mind.
5. Student loans.
   If you sign up for a course and then drop out or get a degree that’s not going to earn you more than your degree-less friends, then you’ve paid roughly $12,000 a year in idiot tax because it’s not getting you anywhere. Think long and hard about the course you enrol in and consider taking a gap year first to get to know yourself. That way your student loan won’t be a waste of money.
6. Buying brand name products.
   Plenty of store brands or generic brands cost far less for an item of the same quality. If you find yourself sucked in by the brand, more fool you.
7. Paying bank fees.
   It’s altogether possible to pay zero bank fees even if you don’t have a mortgage. Go to your bank, ask the staff to analyse your accounts and don’t leave until they’ve set your banking up in a way to avoid paying this pointless idiot tax. You’ll also need to get in the habit of never going into unplanned overdraft. Honour, dishonour and other such fees are a complete waste of hard-earned cash.
8. Buying in-game purchases.
   Yes you. If you’re a Candy Crush addict or into any other game, you can avoid paying. Google the words “how to avoid paying for (name of game)” and you’ll find lots of cheats.

We can all put the idiot tax to bed most of the time. We may drift over the speed limit from time to time. But trust me. If you get yourself in the right frame of mind you can avoid most idiot taxes.

*Based on lucky dip Powerball tickets on Wednesday and Saturdays, with a growth rate of 6 per cent per annum, an inflation rate of 3 per cent and Pie tax of 17.5 per cent.