No matter how much income you have each month, none of us want to waste money on things we don’t need. The idea of hard-earned cash drifting away on impulse buys, forgotten subscriptions, and hidden fees is frustrating. Chances are if you’re like most people, you probably have at least some areas of your budget where you could stand to save a little money.
In this article, we’ll go over five areas you might be wasting money each month. While each area may or may not apply to you, try to think of them as a template to inspire your own budget cuts. Evaluate your monthly bank statements and look for areas where you could apply similar reductions to your spending habits. You might be surprised by what you find!
1. Extra Subscriptions
This expense is a big one and often overlooked. We live in an age of convenience and immediate services, where smartphones give us access to almost anything. Many of these services come with a price, however.
Some services probably provide you with value daily. If you watch Netflix or Hulu every day, don’t cut them. If, however, you have a bunch of subscriptions you haven’t used in months or had completely forgotten about, those should be on the list to cut. Perhaps you signed up for a 30-day free trial of some service a year ago but forgot to cancel, and they have been billing you ever since. Maybe you have two competing service subscriptions that provide roughly the same value. You could cut one and keep the other.
The idea is to audit all your subscriptions and ensure that every one of them is still providing value. You will probably be surprised how many active subscriptions you currently have, yet how few you regularly use.
2. Retirement Account Fees
Saving for retirement is something we all need to do. Just make sure you don’t get bitten by sneaky hidden fees on your retirement account or investments. Not all investments are equal, and some cost quite a bit more than others. For example, if your retirement account charges 1.5% in fees and expenses, that would mean that your balance will be significantly smaller at retirement than if you had fees of 0.5%.
Be sure to read through your plan’s fine print to see what they are charging you and evaluate alternatives to see if you could save any money. Don’t hesitate to talk to your plan’s administrator so they can answer any questions you may have.
3. Bank Fees
Some banks offer free checking or savings accounts that don’t charge any fees, so if you can find one of these, you can save a substantial amount on those recurring monthly or annual fees. If your bank does charge fees, consider asking for a refund on them.
If you are a customer with an account in good standing, and especially if you have credit cards or loans with the bank, they are already making quite a bit of money off of you without those fees. Don’t hesitate to consider switching banks or asking for a refund of your fees.
4. Kids Extracurricular Activities
This is an area where you’ll need to evaluate both the costs and the benefits. While some extracurricular activities can be useful for children, some are increasingly being over-scheduled. Organized activities have almost entirely replaced the free time and unstructured play that used to occupy childhood development. This rigidity can have the unintended side effect of diminishing creativity and can sometimes lead to stress.
However, the financial aspect is the main focus, and the average monthly costs for extracurricular activities are $302 per child for sports, $218 for arts-related activities, and $124 for school clubs. Considering that this is per child, that quickly adds up for those with multiple children. This estimate also doesn’t take into account the extra costs of food, gasoline, uniforms, supplies, travel, fundraisers, etc. which are all substantial.
The key is to talk to your kids openly and have a conversation about what activities they most enjoy and if they participate in any out of perceived obligation or social pressure. Evaluate more affordable alternatives and consider trimming events which aren’t making your family happier.
5. Commuting to Work
Commuting to work by car is something few people enjoy. It also places a tremendous amount of wear and tear on your vehicle. Worse yet, it causes a lot of stress. Some studies have shown that commute time is inversely related to self-reported happiness levels! The thing about commuting is that it is the act of driving in traffic that bothers most of us. Riding in a passenger seat, bicycling, or walking all result is significantly reduced stress.
The benefits of not driving extend beyond the commute, however. Commuting is very expensive in terms of fuel and vehicle maintenance, but also in terms of lost time and energy cost. There are a handful of ways to mitigate this problem. One is to work remotely from home if your job is compatible with it. Another is to move closer to work or get an occupation closer to home. If you can’t change the distance between home and work and it is too far to walk, consider joining a carpool or vanpool. You could also use public transportation if it is available. If you are fortunate enough