Too often, we spend without giving much thought to our purchases. We may not even realize how much is subtly walking out of our wallets because of our habits. Here are 10 top sources of spending that might be costing you more than you think:
1. Credit Card Interest
Carrying a balance on your credit card is one of the top sources of spending. If you only pay the minimum, you could repay more than three times the original amount you borrowed — and pay for it 10 years down the line or more.
Save money by paying down credit card debt as quickly as possible, and creating a spending plan so that you pay off your balance each month so you no longer pay interest.
2. Account Fees
From maintenance fees to overdraft fees, you could be paying hundreds of dollars a year. Look for a bank account that doesn’t charge maintenance fees or require a minimum balance. Track your spending to avoid going over your checking account limit and getting hit with a fee that might be as much as 45 dollars or more per item.
3. Late Payment Fees
Many companies charge fees when you pay late — even if you are only a day late. Create reminders that encourage you to pay your bills ahead of time, posting checks at least 10 days in advance. When possible, set up automatic withdrawal so you don’t have to worry about late payments.
4. Premium Gas
Unless you drive a high-end performance vehicle, you don’t need premium gas. For the most part, premium or plus is just fine. Read the owner’s manual to see what is required. If you don’t need to pay for premium gas, save on each fill up by choosing a grade with lower octane.
5. Latest Gadgets
A brand new gadget probably doesn’t have a significant upgrade, unless you bought the item more than four years ago. Consider buying last season’s model. Get a discount as the retailer tries to clear the shelf for the latest stock. Another option is to buy a certified refurbished gadget, saving 25 to 50 percent of the retail cost of a new item.
6. Insurance
Automatic renewals on insurance might lead to paying more than you need to through complacency. At least once a year, get new quotes for your auto, homeowners and health plans. If you can find something cheaper, make the switch. You can even offer your current carrier the chance to match the price, potentially saving you money each month.
7. Gym Membership
Do you really use that gym membership? There are thousands of free workout videos on the Internet. Many of them show you how to stay fit using low-cost equipment or your body weight (no cost at all).
8. Cable/Satellite
One of the most unnecessary top sources of spending is cable or satellite TV. You’re doubtless paying for more channels than you use. Cut the high-cost TV and instead pay for low-cost streaming services like Netflix and Hulu.
9. Food
Americans throw out about 35 million tons of food each year. You might be surprised when you look at how much money you waste on food. Create a weekly meal plan so that you use the food you buy. Combine meal planning with a smart coupon strategy and cut your grocery bill significantly.
10. Poor Credit Score
Bad credit can mean higher interest rates and higher insurance rates, costing you thousands of dollars over a lifetime. Work to improve your credit score, and you’ll save money on a number of financial services.
Image Source: Pixabay
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