Let’s talk about wasting money, or more specifically, financial leaks.
Financial leaks are those small purchase or charges that occur regularly, that you either don’t notice or just write off as “too small to be significant.”
Even the high fees you pay when you turn in your change at Coinstar!
But the truth is, these small financial leaks can have a fairly large impact on your budget.
About a year ago, I decide to do a complete audit of our monthly spending. I stick to a “pay yourself first budget” where I automatically transfer a certain amount of money into our savings account and investment account the day we get paid.
I believe this is the best way to ensure that you’re actually saving money each month – if the money is gone before you even notice it’s there, you can’t spend it.
I also like to keep a small buffer in our checking account in case any small, unexpected expenses occur (which can happen frequently when you have kids and pets!)
I’d determined the amount of money that would be transferred to our savings account by calculating a realistic monthly budget, but recently I’d noticed that despite “feeling” like I was sticking to the budget, the buffer seemed to be getting smaller and smaller.
I knew that neither myself nor my husband were intentionally spending outside the budget so I had a pretty good feeling that “small money leaks” would be the culprit.
After sifting through my checking statement with a fine tooth comb, I was able to identify and plug a number of money leaks, and now our buffer stays exactly where I like it.
These small amounts can really add up at the end of the month. Here are some of the ways you might be wasting money without realizing it.
Avoiding Money Leaks: 10 Ways You Might Be Wasting Money Without Realizing It
1. Paying for Cable
As someone who enjoys relaxing in the evening by tuning into some of my favorite reality TV shows, I was hesitant to cut the cable cord.
But after receiving one-too-many exorbitant bills, I started to research cable alternatives.
If you’re in the same position I was, then rest assured – it’s possible to painlessly cut the cable cord and still have access to all of your favorite shows.
I was previous paying $170/month for a cable/internet bundle and now pay $70/month (on average) for a cable alternative/internet.
That’s a saving of around $1200/year.
If you’d like to learn exactly how I set up my cable alternative, this article outlines the steps I took (scroll down to the first heading – “I Stopped Paying for Cable.)
2. Paying For Services You Could DIY
It’s nice to pamper yourself once in a while, but paying for services you could do yourself is also a good way to waste money.
Dying your own hair (if you’re a brunette like me, this is super easy!), giving yourself a mani/pedi, waxing or plucking your own eyebrows, and mowing the lawn instead of hiring someone are all ways you can save by DIY’ing.
Here’s an example example of possible savings:
The average pedicure costs upwards of $40. Forgoing a bi-weekly pedicure and painting your own nails could save you over $1000/year.
I used to get regular pedicures (and still enjoy an occasional one.) After receiving a glowing recommendation from a friend who swore that this miracle gel lasted just as long as a salon pedicure, I decided to give it a try.
I’m pretty skeptical about things like that, but I was really surprised! My nail polish lasts just as long as a salon pedicure, and I regularly get people asking which salon I go to because my toenails always look so pretty.
I always tell them to buy the miracle gel! It’s a gimmicky name but it really works.
3. Not Taking Advantage of Cash Back Apps
Cash back apps are one of my favorite ways to make and save money.
There are dozens of free apps that allow you to earn money for doing things you already do, like grocery shopping, for example.
One of the best cash back apps is Ibotta, a free app that gives you cash back rewards on your grocery store purchases.
Ibotta is free to download, easy to use and has the potential to save you a lot of money. I’ve made over $2000 since joining Ibotta.
Click here to download Ibotta and you’ll get a bonus $10 when you claim your first cash back offer.
4. Eating Out Too Often
I’m the first to admit that I enjoy dining out at restaurants, and it’s not something I’m willing to give up entirely (which is why it’s factored into my monthly budget.)
However, eating out too often can wreak havoc on your budget.
The average restaurant meal costs over $13 (plus a tip.) For a family of 4, you’re looking at at least $60, assuming that nobody orders a drink.
I’ve found that the best way to avoid making unnecessary restaurant/drive through purchases is to meal plan.
Granted, meal planning takes time and it can be difficult to come up with healthy, budget-friendly ideas every week (this is the reason I avoided meal planning for so long.)
If you’re struggling with meal planning, then I recommend giving $5 Meal Plan a try.
For $5 a month, you’ll get a full weekly menu delivered to your email inbox. Every meal is healthy, family-friendly and costs around $2 per person to make, on average.
I love $5 Meal Plan because it takes the hassle out of meal planning. Just print out the grocery list, buy what you need and your meal planning is done for the week.
5. Not Unplugging Electronics & Appliances
Unplugging your electronics can provide some substantial savings on your yearly energy bill – up to 10% according to the U.S. Department of Energy.
The biggest energy sucks include your TV & cable box, but it can be difficult to remember to switch things off.
That’s why I think this power-saving strip is so cool.
It automatically switches off appliances that aren’t in use. For example, when you power off your TV, it will automatically switch off the power to your TV peripherals.
6. ATM Fees
Did you know that, according to Bankrate, the total cost of withdrawing money from an out-of-network ATM is $4.68 on average?
Paying almost $5 just for the privilege of withdrawing your own money seems ludicrous (and it is) but so many of us use an out-of-network ATM without even thinking twice about the fee.
Making just two out-of-network withdrawals per week could cost you over $486/year. You can avoid this paying this unnecessary fee by using an in-network ATM.
7. Buying Extended Warranties
Just recently I purchased a $20 set of children’s headphones for my son. Before I paid, the cashier asked if I wanted to purchase a 2-year extended warranty for $7. I declined.
There are some instances where it might be a good idea to consider purchasing an extended warranty (a used car, an older home, for example.)
But in the majority of cases, purchasing an extended warranty is a waste of money, especially when the item has a low replacement cost, is generally reliable, and already comes with a warranty.
8. Buying Drinks
The average vending machine charges about $1.50 for a can of soft drink, while restaurants charge around $2.
Ordering water at restaurants and remembering to take your own refillable bottle when you’re out and about is not only healthier, it can add up to substantial savings.
I love this Brita refillable water bottle because it has a filter directly in the bottle – so convenient.
9. Impulse Buying
If you’re trying to stick to a budget you probably already avoid larger impulse purchases like shoes, purses etc.
But smaller impulse buys, like a frappe at Starbucks or a candy bar at the grocery checkout, can also make a big dent in your checking account. A venti caramel frappuccino at Starbucks costs around $5 – avoid purchasing one every weekday and you’ll save $1300/year.
Want to learn how to get free Starbucks drinks? Click here for 5 Starbucks hacks.
10. Not Shopping Around For Insurance, Cable, Cell Phone Providers, etc
Shopping around for quotes from insurance and cable companies and cell phone providers can save you big bucks.
I recently switched car insurance providers and cut my yearly bill in half (and kept the same level of coverage and deductible.)
Usually it’s as simple as contacting your provider and telling them that you’re thinking of taking your business elsewhere.
It’s the customer service representatives job to retain customers, so they’ll generally be willing to offer you a discount to stay with them.
You may also want to jump start your finances by participating in one of these money saving challenges.