Cut These Expenses and Watch Your Savings Grow

Want to make this a great year for your finances?  The new year is a great time to set some money-related goals, whether you’d like to pay off your high interest credit card debt, beef up your emergency fund, or save up for a big purchase like a vacation or a down payment on a house.

Of course, whatever your goal is, you’ll need to free up some extra cash – and that means creating or adjusting your budget and saving more, and spending less on unnecessary purchases.  And by “unnecessary purchases,” I don’t just mean big-ticket luxury items like new cars, tech gadgets, or designer handbags: While big spending sprees can definitely take a chunk out of your bank account, it’s often those little purchases – coffee here, late fees there – that can do the most damage.

If you really want to change your spending and saving habits this year, here are a few small expenses to cut out:

• Buying food at work. Lunch is the big budget-killer here, of course: Lunch at a fast or fast-casual place can easily set you back $50 to $75 per week.  But if you want to cut work-related food spending, you can’t forget about your mid-morning lattes or your late-afternoon vending machine snacks.  I’ve said this before, but it bears repeating:  It’s much, much cheaper to bring lunches and snacks from home.
• Unnecessary subscriptions (and memberships). For just a few bucks a month, you can get access to TV shows, movies, podcasts, online games, and custom playlists tailored to your exact musical tastes.  And in some cases, subscriptions do make sense — for example, cutting traditional cable TV in favor of, say, Netflix or Hulu can save you a ton of money.  But those savings start to fade with every new subscription service you add. Want to free up some cash?  Sit down and make a list of all subscriptions you pay for.  Can you cut a few?  Are there free alternatives?  Are there any that you simply don’t use?
• Late fees. We live in the age of online accounts and auto pay options, and smartphone alerts.  There’s no reason that you should pay a bill late.    If it’s a timing issue — as in, all your bills are due at once, leaving you short every pay period – try to change a few due dates (a lot of credit card and utility companies offer some flexibility).  And if it’s simply an issue of you forgetting to pay your bills, consider handing the task off to a spouse or partner, or set up recurring automatic payments.
• Banking fees. Take stock of what your current bank charges you: Do you pay a monthly fee for checking or savings?  How much does your bank charge for using non-bank ATMs?  Do you pay extra to receive paper statements?  If it turns out that you’re paying big bucks to your bank, it might be time to do some comparison shopping.
• Credit card interest. This is another one that’s impossible to justify. The best way to avoid this unnecessary expense is to pay your credit cards in full every month.  If you’re struggling with a high balance and you can’t pay it off in full, do what you can to reduce your balance as quickly as possible.  The sooner you pay it off, the sooner you can stop throwing your money away on this unnecessary expense.
• Cell phone data overage. Cell phone service isn’t cheap to begin with – so why pay even more money for using more data than your plan allows? If you consistently go over, it may be wise to upgrade your plan (a pricier phone bill is still probably cheaper than penalty fees for extra data).  If changing your plan isn’t an option, pay closer attention to when and where you use your phone.
• Smoking. I won’t even bother with the many, many health reasons to avoid cigarettes – everyone knows that smoking is bad for your body.  But smoking is also terrible for your budget.  The cost of smoking varies a lot from state to state, but for the sake of this article, let’s say a pack of cigarettes costs $7.  If you smoke one pack a day, you’re looking at $200 a month!

Cut these expenses out for a month and see how much your bank account grows – you might be surprised at how much cash you can free up.

And if you need debt advice or have questions about spending, saving, budgeting, or credit cards, you can always reach out to Debt Guru and receive a  free debt relief consultation.