Many of us “leak” money without realizing it. Spot the leaks and plug up unintended or careless spending – the savings could add up to hundreds of dollars a year, or more.
- Take a no-spend month. To identify where you may be “leaking money” unnecessarily, take a no-spend month. It’s a good way to take a step back from your normal spending patterns and “re-set” your spending.
It’s simple: commit to a 30-day period of spending ONLY on necessities. For example, you may spend money on groceries, but you may NOT spend money on new clothes, entertainment, travel, dining out, or any other luxuries.
Walk or bike to everywhere instead of driving; take lunch to work every day; embrace free entertainment options, like exploring local parks. Not only will you save a lot of money during this one month period, you may find yourself re-evaluating old spending habits altogether and deciding you prefer your own creative, low-cost alternatives.
Someone in the Sum180 community described this as a “juice fast for your spending.” Taking a break from our usual spending patterns helps us become aware that so much of what we spend our money on are “wants,” not “needs.” If you’ve fallen into careless spending habits, a no-spend Month is a way to hit the reset button, “cleanse” yourself of those bad habits, and establish new patterns.
Consider taking a no-spend month every six months, to give yourself the perspective you need to realize where you may be “leaking” money unnecessarily – and find low- or no-cost alternatives.
- Audit your spending to eliminate hidden expenses. It’s one thing to identify and eliminate the expenses you know about, but what about the ones you don’t know about or notice?
For example, if you haven’t done a serious credit card review in a while, you may be surprised to see how many charges are automatically showing up on your credit card every every month and every year. They’re not necessarily fraudulent – they may be charges you legitimately signed up for long ago, and then never thought about again. For example: Netflix; a gym membership from an old address; subscriptions to professional publications; insurance for your pet; maybe a home alarm system; a cloud storage account or two, a few domain names reserved for those websites you always planned to build for fun… You may not notice right away, but automatic charges like these all add up, especially over time. The expenses may be fine if you truly need and can afford them, but often, it’s a case of out of sight, out of mind.
You can catalog all your subscriptions manually and then personally contact each company, one by one, to cancel the subscriptions you no longer want. There are also free services that will take care of it for you. Here are two that are worth checking out:
o . Trim scans your transactions on a recurring basis and cancels anything you don’t want to keep paying for. They do charge a $6 fee for “hard to cancel” subscriptions – for example, the ones that require sending certified mail or getting on the phone with someone. For most subscriptions, all you do is authorize cancellation via text message. Trim does the rest.
o Truebill asks you to connect your accounts to their system one time; after that, they monitor your statements and send you monthly email summaries to show you what you’re being charged for. You can then cancel using their “one click cancellation system” – no more waiting on hold to do it yourself. According to Truebill’s website, the average user saves $512 by cancelling unwanted subscriptions.