Inside: Are any of these money drains eating up your paycheck? Make adjustments as needed to slow the flow and get your finances back on track.
Stressed about money? You’re not alone.
If you’re like many people, you’re feeling the squeeze more and more with each passing month. With inflation continuing to increase, it’s become even more important to keep an eye on where your dollars are going.
While there are certain things that are outside your control, such as ever-rising costs, you can become more aware of what you’re spending and make adjustments as needed.
When you’re in a challenging economy, every dollar counts so looking for any ways you can save some money is helpful.
Here are ten common money drains that can quickly eat up your cash. See if any of them are impacting your finances so you can slow the outflow.
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Top 10 Money Drains
Some of these money drains may seem obvious while others are more sneaky.
If you haven’t recently reviewed your outgoing funds, now is your chance. If you’re someone who is intimidated by numbers or has simply avoided looking at your spending habits, this is an especially important exercise for you.
By becoming more aware of where your money is going and making informed decisions you can regain control over your finances. You may not be able to control what certain things cost but you might be able to make some decisions that have a big impact on your wallet.
See how much more money you can save by stopping these money drains.
1. Being loyal
Have you stayed loyal to certain companies for years hoping that your customer loyalty will save you money? It’s possible it could, but it’s also quite possible you’re actually paying more to be a loyal customer.
And truthfully those companies you’re being loyal to don’t really value you as much as they may say. When it’s not in their best interest to have your business, they’ll drop you (as many insurance customers have experienced this past year).
Shopping around and comparing prices does take time and isn’t always as simple as it should be, but this money drain can take a lot of your hard-earned dollars so it’s worth investigating.
When was the last time you looked at your insurance coverage and compared rates? Many states have experienced steep increases in rates this past year, so it’s worth reviewing if you have the proper coverage for your needs and if the rates you’re paying are competitive.
Phone & Internet
Last year we switched our cell phone carrier (to Xfinity, you can check out my referral link here) and it cut our monthly bill in half. We weren’t forced to buy new phones and we were given gift cards to make the switch while also having permanently lower rates.
It’s important to read the fine print when comparing prices to make sure you don’t get a surprise later if they’re simply offering a low introductory rate. In our case, there were no surprises and we’ve been able to enjoy sizeable monthly savings with our new carrier still providing the same cell coverage as we had before (you’ll find that a lot of them share the same networks).
A few years ago we also switched our home phone provider. While I know many people don’t even have one anymore, we opted to keep ours for a few reasons and made the switch to Vonage which also cost us about half as much per month as we were paying prior.
2. Ongoing membership costs and subscriptions
Reviewing your credit card statements may unearth some surprises. Perhaps you’re still paying for memberships or subscriptions that you didn’t even know you still had. Those are easy ones to cancel to stop that money drain from continuing.
Companies will often try to entice you with a free trial that turns into a paid subscription after a short period of time. If you sign up for one of those to test it out, make sure to put that cancellation deadline in your calendar immediately so that you can cancel it in time if you want to.
Also, check to see if the costs are increasing over time and if you’re getting the value you’d hoped out of that membership. If you’re paying for a gym membership but never go to that gym, cancel it so you can save more money.
Have streaming services you don’t use much? Cut back to just your favorite one. There are so many companies that have moved to monthly membership models and while that’s great for their business, it’s not great for your paycheck.
Subscription boxes are another ongoing cost to pay attention to. In my case, they were something I stopped buying after simplifying my home. Even while they initially seemed like a good deal, they ended up creating clutter in my home and included items I’d never use or wear.
3. Looking at payments and fees
With credit card debt at all-time highs, regulators are working to try and lessen the fees that banks are charging. But currently? Those fees are really really high.
Look at what your APRs are on your accounts. Notice if you’ve been paying any bank fees or late fees with any of your bills. Once you get behind with your bills, it can be a challenge to get back on top of it, but by facing the debt and any fees associated with it you can create a plan to tackle it.
Buying a home or a car
When you purchase a home or new vehicle or make any kind of big purchase, it’s important to read the small print of what you’re agreeing to.
Making informed decisions and understanding what happens in various scenarios on the front end is a helpful way to try to avoid some big fees later on.
4. Buying name brands
Convinced that brand names are better? In some cases, they might be, but in others, they are nearly identical to a more generic brand and can be a waste of money.
When you’re grocery shopping store labels are often a better bet. You’ll save money over time and aren’t likely to notice much of a difference.
When it comes to things like clothing, some brands may in fact be made better than others. In that instance, if you’re set on getting the name brand shopping secondhand will save you a lot of money.
5. Renting storage
It’s almost impossible to avoid seeing the numerous self-storage options available while driving through cities in the United States.
If you’re one of the many people currently renting a storage unit, you may want to reconsider it.
Storage units end up being very costly over time and typically the things being stored are not worth what you end up paying for the unit. They often offer lower introductory rates that increase over time as they’re relying on the fact that you’ll keep paying because you don’t want to bother to come clean out the unit.
6. Treating yourself
We’ve likely all heard the messaging of ‘treat yo self’ and I get it. Self-care is important and moms especially can end up spending a lot of their time focusing on other people, so feeling like you’re doing something just for you is appealing.
But it can also get very expensive. With all of the services available for your hair, skin, brows, and eyelashes, there are a plethora of options out there all of which come at a cost. Many require monthly maintenance which is something to consider as well.
You’ll also see advertisers telling you that you deserve this or that product. They’ll try to convince you how life-changing it will be. And while it is a good idea to take care of yourself, often the ideas pitched at you may not be what you really need.
If you’re feeling burned out, consider these self-care ideas. Not only will you be taking good care of yourself, but you can also save quite a bit of money in the process.
7. Dining out
I know, I know. This is one you see on just about every list on how to save money, but there is a good reason for it.
Look through your recent credit card statements and add up how much you spent at coffee shops and restaurants. Eating out has gotten increasingly expensive. Even fast food options have become quite costly.
Having some easy-to-prepare foods on hand at home is a great option for when you’re low on time or energy. Freezer meals are also good for this.
By taking a bit of time to prepare for the week ahead and having the necessary ingredients or supplies on hand at home, you can save yourself a lot of money by avoiding regular trips to restaurants and coffee shops.
You can still go out occasionally if desired, but including it in your monthly budget will help prevent overspending in this area.
8. Making impulse purchases & buying unnecessary items
On average, people are spending roughly $1500 per month on non-essential items. While that number may initially seem shocking when we really consider what is truly a necessity versus just nice to have, all of those dollars here and there quickly add up.
By being more intentional with shopping and reducing the nice to haves and focusing on what is truly necessary, you can save yourself a lot of money.
Think of it as a challenge for how you can think outside the box to make do with what you have rather than buying new. As an added bonus, it can help you bring less clutter into your home too.
9. Trying to keep up
Living within your means can be tougher to do in today’s economy, which is why it’s even more important to make sure you’re not trying to keep up with the Joneses.
Buying things because your friends have them or going on a vacation you can’t afford because your family expects it can be one of the biggest money drains.
When you’re trying to keep up with a lifestyle that doesn’t align with your income, you can find yourself in a pile of debt quickly.
It really isn’t essential to have the latest and greatest of everything. Stop letting comparison steal your joy and instead discover the benefits of living within your means.
10. Not having emergency funds
Savings have been dwindling and more people are living paycheck to paycheck. Unfortunately, unexpected expenses do come up in life, and if you don’t have savings those charges often immediately go onto a credit card with a high interest rate.
The good news is by looking at which of the other money drains are happening with your finances, you can start setting aside money for your emergency savings.
Simplifying your life can help you to save more money to reduce the financial stress in your life. While every person’s circumstances are unique and there are some things you may not be able to control, focusing on what you can do can have a big impact on your finances.
What money drains are hurting your finances? Share your saving tips in the comments!
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