Who wants to cut back on the things you love? That sounds terrible. What if you found the small (or large) money leaks that might be slowly sapping your budget? These money “leaks” could be anything from old accounts you’re unaware of, to overlooking potential savings, to unnecessary choices. Let’s take a look at the little fixes that could save you thousands of dollars.
Too Many Subscriptions
Remember that wellness-coaching app you purchased? How about the gym membership that you rarely use? The monthly beauty box that remains unopened and tossed aside? Whatever it may be, have you thought about cancelling, but find yourself unwilling to go through with it? These small commitments can quickly add up every month. Companies know how forgetful we become, how we will put off cancelling until the follow month, but never do. You’re most likely guilty of this if you’ve found yourself checking your bank statement and saying, “oh man, I’m still paying for that? I need to cancel.” The average person could save $215 a year by cancelling unused, “gray charges” that incur over time.
Rarely Checking Your Bank Accounts
If you’re only checking your bank account once or twice a month, are you seeing every charge as it happens? Are you only paying attention to the larger purchases? Real-time financial information may help to cultivate a better understanding of where you could be saving. Someone who uses an app to track their spending can cut unnecessary leaks by nearly 16% overall. Mint has become the budgeting app gold standard, and it’s free. Considering the average family of four spends $1,057 on groceries a month, if you spent 20% less than that, you could save $2,536 a year alone. Imagine the savings if you cut a percentage off of dining out every month as well.
Sticking to Cable
The average cable bill far exceeds $100 a month, but with the plethora of options (thanks to the internet) to get your television, sports, or news fix, why are we still spending so much on something we hardly utilize? With options like Netflix or HBO Now, or even live TV options like Sling TV ($25/month), it seems like the alternatives are there. Remember that you can obtain internet separately, sometimes for as low as $25 a month. By swapping out your cable bill for a combo of Sling TV and Netflix/HBO Now, you could be saving over $700 a year.
Name Brand Products
Many name-brand products contain the same ingredients as their generic counterparts, so why not make the switch? If it’s not something you’re truly passionate about, does the cost outweigh the label? The no-name products can be about 25% cheaper than that of the name-brand products. An online website, Brandless, sells everything for $3, which sounds quite enticing. A family of four could save over $3,000 if they were to save 25% off their grocery bill by switching to no-name-brand products.
Paying Off Your Credit Cards
If you’re letting your credit card sit with a balance, you’ll be paying an interest fee at some point. It would make sense to pay off the balance before your statement comes due, to avoid any interest fees associated with your spending. An average household pays almost $1,000 in interest fees; you may be paying that – or much more – depending on your card balance.
Of course, these are just a few examples of financial “leaks.” Other areas include: accepting your current insurance provider’s quotes without shopping around; impulse purchases; extravagant luxuries;’ and energy-inefficient homes. Many of these areas may seem miniscule, but when lumped together over the course of a year, you can begin to see how impactful they can be. Plugging the money leaks is an effective way to reel in your budget and make decisions that will propel you to spend smarter in the future.