“I stick to a budget and I check my bank statements regularly. How can I not know when I’m spending money?”
Hear us out. Cutting your discretionary spending is the way most of us save money, but how can you know where to cut back if you don’t know where your money is going?
Most financial websites will use the ubiquitous daily latte example – you know the one, where your morning $4 latte at Starbucks snowballs into plunking down $1,000 per year on coffee – but we’d like to give you 12 other ways that you’re depleting your funds that you may not be aware of.
1. “A 100MB plan to go with my new iPhone? Sign me up!”
If you don't plan on streaming the entire Game of Thrones series – and everything else on HBO GO for that matter – you may be paying for too much data. Pick a data plan that works for you: if you know you can regularly connect to Wi-Fi (like when you’re at work or your favorite coffee shop), choose a smaller data package.
And once and for all, close apps that you aren't using and, if you use an iPhone, disable background refresh for your apps so they won’t run in the background. Your apps not only drain your data, but they’ll drain your phone’s battery as well.
2. “I freakin’ love tomatoes, of course I’ll buy 20 pounds of them!”
Let’s give you some more food for thought when it comes to saving your cash. Buying in bulk may sound like a smart money-saving idea, but Costco is way less awesome when you realize that giant tub of mesclun greens will likely expire before you can finish it. Unless you’ve got five hungry roommates on the Michael Phelps diet, buy only the produce that you’ll use in the next week.
3. “You don’t understand, my boot camp class is life changing!”
We love Soulcycle and Barry’s Bootcamp too. But if you pay $25 to $35 for a single class and attend several per week, your wallet will be slimming down even more than you are. See if your local gym offers your favorite spin or boot camp classes as part of their membership and attend those instead.
If you’re not likely to hit the gym regularly, however, don’t spring for a membership: 67% of people with gym memberships never use them.
4. “My UPS guy is my unofficial BFF.”
Paying a one-time fee for unlimited deliveries is an obvious money-saving move: consider an Amazon Prime account if you don’t already have one. If you regularly shop with an online retailer that doesn’t offer free or unlimited shipping options, combing through sites like RetailMeNot.com or FreeShipping.org for coupon codes is a few minutes well spent. Pun intended.
5. “Signing up for loyalty programs and marketing emails is so annoying.”
Think of the free loyalty programs at the supermarket or pharmacy you frequent most; your CVS receipts may be epic, but those $5 coupons and 20% off your face wash add up over the year. Don’t forget that some retailers – like Sephora, IHOP, Starbucks, and Aveda – offer free birthday swag if you’re a member of their loyalty programs. Worth it.
6. “I already forgot the coffee I made at home, I’m definitely not going back to unplug my chargers.”
Do you know which of your devices are “energy vampires?” (Sorry folks, not in a sexy Vampire Diaries or True Blood way.) Some devices will bite into your electric bill, even after you power them down. Your digital cable box alone adds $23 to your electric bill each year. Find out which other devices are unknowingly upping your utility bills and keep them unplugged until you need them.
7. “I bought an extended warranty for my laptop. I am so smart, S-M-R-T!”
Does it seem like your laptop/phone/printer breaks down only after the warranty has expired? Typical, isn’t it? Skip the overpriced warranty and see if your credit card provides free, extended protection for your device – many cards, including American Express, offer this perk.
If you have a technology rider on your homeowners/renters insurance, you can replace your phone or laptop if your device is ever stolen (or you know, falls from your bag while you’re running to catch a cab).
8. “My Vegas trip was, uh, less than baller. I’ll just put the minimum on my credit card until I win big.”
Sure, if you want to continue your losing streak. Your monthly minimum is usually a small percentage of your total balance; but because interest is tacked on every month, you’ll actually increase your balance – and subsequently, increase the amount you’ll pay in interest – by only playing the minimum. It’s a disastrous cycle and not so helpful when you want to get out of debt. Cut those interest payments and always pay more than the monthly minimum. See how much you can save.
9. “I got more dollars in my FSA than Silicon Valley’s got startups. I don’t have to worry about it for a while.”
Your Flexible Spending Account is like the awesome sidekick to your health plan. You can put aside pre-tax dollars for copayments, deductibles, and other healthcare-related costs. The big “but” – and we cannot lie – is that you must spend your funds within the plan year; your FSA dollars, unfortunately, don’t rollover. If you overestimated your healthcare costs for the year, don’t let your money go to waste. Use the cash to buy extra contact lenses, first-aid supplies, vitamins, or make an appointment with the specialist you’ve meaning to see.
And when open enrollment time rolls around again, a quick audit of the previous year’s healthcare expenses will give you a better idea of how much to allot in your FSA.
10. “My car could play hide-and-seek in a junkyard and never be found! I better keep my deductible low because this wreck could break down at any time.”
You could save $100 a year or more on your premiums if you raise your deductible from $500 to $1,000. You'll have coverage if your car is ever totaled, and you can cover any minor repairs by putting aside the deductible amount in your emergency fund. If your jalopy looks like a Mad Max stunt vehicle, all the more reason you shouldn’t spend a penny more for a low deductible plan.
11. “But it’s only – burp – one more drink. I’ll just hit up the ATM at the bodega closest to the bar.”
Sometimes you’re already five drinks deep at the bar and the night is still young, so you hit the nearest ATM to keep the party going. It’s the most convenient option, but think of it like this: a $3 fee is like tacking an extra 15% on your $20. Which is just as bad as credit card interest. Make sure your bank is a member of a larger network, like Cirrus or Allpoint, so you’re not charged those exorbitant fees. If you have no choice but to visit an out-of-network ATM, take out more than $20 at a time.
12. “You wouldn’t like me when I’m hangry. I’m going to get Chipotle for lunch.”
Eating is a given, but do you know how much you’ll save if you make lunch at home? Let’s take your $10 lunch of a burrito and a bottled water at Chipotle: if you spend $4.00 for three cans of black beans, $3.59 for an 8-pack of wraps, $6 for a box of grilled chicken strips, $5 for a five-pound bag of brown rice, and $3.50 for a jar of salsa, you could make wraps for a week and a half for around $22. That same amount nets you only two lunches at Chipotle.
Are you guilty of any of these budget busters? Don't worry -- unless you're the type who documents where every one of your pennies goes, you've likely missed one or two of the wallet leeches on this list. Use these tips to delve into your spending habits and discover where you could be saving more. You work hard for your money; don't leave cash on the table.