Many of us are led to believe that in financial terms we ‘need’ something, but we might not necessarily ‘want’ it.

Here are some things you might think you need, but in all probability you don’t.

You take out a loan, but then are told by the salesman that you really should have Payment Protection Insurance. As a single premium policy this means that not only do you pay interest on your loan, you also pay interest on your insurance premium!

Payment Protection Insurance doesn’t come cheap either. It can add around 35% to the final cost of your loan. Remember too, that as with most insurance policies, there are exclusions. They might apply to the type of illness you come down with, or the type of work you do-working short-term, or being self-employed for example. Also, even for those who fully qualify, they might only pay out for 12 or 24 months maximum.

Income Protection Insurance might be better suited for you, depending on your circumstances.

Extended warranties-one of the biggest cons going. The chance are that if you are being offered an insurance policy for a product the manufacturer is fairly certain it isn’t going to break down in that time period. Of course that doesn’t mean to say it won’t, but it’s unlikely.

Warranties have to be offered for a certain length of time, and this is a legal requirement under the Sale of Goods Act of 1979. So there’s a measure of protection anyway for consumers. Sometimes an extended warranty might only cover parts, but labour has to be paid for (and it’s usually the labour that costs the most money).

I’ve bought a product that cost around £25 and then been offered extended warranty for £15 a year! Why on earth would I pay that much when I can just buy another new item for not much more?

ID theft cover can work out expensive. £5 to £7 a month is the norm for this type of insurance. Ok, you get to see your credit record, but so what. Banks have to give a certain level of cover in the event of identity theft. You can get free expert advice from the fraud prevention service which is run by the government, so again, why pay for it? And you can do your own credit report check for a one-off fee of £2.

Store Cards sound great. You’ll often be able to receive a discount of something like 20% or even 25% off your initial purchases. Now, if you take those discounts, then pay off the balance in full, you are quids in. Fine. But, if you don’t pay off the balance in full you may end up paying a whacking 30% in interest. Even the lower interest rates work out at around 15% to 20%.

If you are getting married, check out whether your home insurance covers your wedding gifts. Paying out for special insurance for that ‘big day’ can work out expensive, and be unnecessary.

Why pay for debt advice, when you can usually get it free from a number of places? These include Consumer Credit Counselling Service, AdviceUK, National Debtline and Citizens Advice Bureaux.

Some cashpoints make a charge when you want to take your money out. Of those that do charge, it is usually £1.50 per transaction. These cashpoints are often found in convenient spots, such as pubs, or corner shops. Go to a dispenser where withdrawals are free.