BUDGETINGLIFESTYLE & TRAVEL

Do You Know Your Spending Leaks?

Spending leaks affect everyone and often vary person to person. Below are a few common areas we spend more than we realize and some tips to help keep you on track.

Food

Think about the past month… have you thrown away food that is no longer good? Ordered a pizza and only ate a few slices before tossing the rest? Went out to eat even though you could’ve used your meal plan? Food tends to be one of our biggest costs so it’s no surprise it can be a major leak in your budget. Between the money spent on food that is never eaten or the extra money spent eating out or on deliveries (plus tip), we often spend more than we anticipate when putting together budgets.

Tips if this is your spending leak:

• Avoid deliveries by adding up the additional cost and determining what else could be done with the money.
• Plan your meals for the week before grocery shopping to eliminate waste or share groceries with your roommates.
• Identify upcoming events where you’ll be eating out to look forward to and try to stick with meal plans or groceries instead of dining out other times.

Fees

Fees can be sneaky to identify as spending leaks because they often occur as small amounts at a time and many people feel like they are unavoidable. Between fees assessed for parking, ATM withdrawals, annual costs for certain credit cards or accounts, and more, these minor costs can add up quick having a bigger impact on our spending cash than we realize.

Tips if this is your spending leak:

• Add up what you’re spending in fees to see the impact on your budget.
• Identify which fees are avoidable (late fees, ATM fees, etc.) and ways to prevent these from occurring such as setting up payment reminders or only using ATMs within your financial institution’s network.
• Ask for fees to be waived or removed. Sometimes all it takes is asking nicely and being proactive.

Subscriptions

According to Deliotte, 69% of households currently subscribe to one or more video streaming services. With subscriptions being offered for self-care products, snacks, pet supplies, makeup and more, many find themselves with items they don’t need or use.

Tips if this is your spending leak:

• Check all recurring payments in your account to see what subscriptions you’re being charged for each month, quarter, or year.
• Compare the cost of the item or service to how often it’s being used to see if these funds would be better spent elsewhere.
• Read the terms and conditions when signing up for free products to ensure you aren’t charged going forward.

Sales

Everything is most enticing when you’re getting a deal on it! Companies use marketing emails or send coupons in the mail in hopes that it will encourage you to spend your money with them. Often times there is a timeframe for the deal or coupon which adds the extra pressure of buying an item now, even if we don’t actually need it.

Tips if this is your spending leak:

• Next time you’re intrigued to buy something based on the email or ad you see with a discounted price, think about why you’re considering buying it. Do you actually need or want this item, or are you scared of missing out on the opportunity?
• Turn off email notifications from store or companies that send you notifications of upcoming sales or deals available.

Sources:

• https://blog.fusebill.com/interesting-recent-statistics-on-the-subscription-business-model
• https://www.listenmoneymatters.com/plug-your-spending-leaks/#:~:text=Editor's%20Note-,What%20Is%20a%20Spending%20Leak%3F,food%20is%20a%20good%20example