How Much Money Are You Leaking Every Month?

Six Little Expenses That Chip Away at Your Finances

You think of yourself as a careful spender.  You budget – or try to, anyway.  You don’t go on spending sprees.  You can’t remember the last time you ate at a restaurant.   You haven’t set foot inside a Starbucks since the late ‘90s.

In other words, you’re pretty darn frugal.  But somehow, at the end of the month, your bank account is a lot lighter than it should be.  Where is your money going?  How is it getting there?  What gives?

Chances are, the drain on your finances isn’t coming from one place.  In fact, there’s a good chance that there are two or three (or more!) tiny little holes in your otherwise solid financial plan — and your hard-earned money is slipping through those holes unnoticed.  Here are a few of the most commonly overlooked fees, expenses, and oversights that can put a drain on your bank account each month:

1. Late fees.  This is a big one.  If you consistently pay your bills late every month, you could be racking up huge totals in late fees.  That extra $25 or $35 you had to pay because your credit card bill was late can add up over several months (and that’s not to mention what late payments can do to your credit score – but that’s another story).   Other late fees – such as fees from overdue DVD rentals or library books – can also drain your finances over time.  Bottom line?  Plan ahead.  Pay bills on time, return things when they’re due.  End of story.

2. Overdraft charges.  Your bank probably offers some kind of overdraft “protection” program designed to help you avoid having your debit card declined.  Instead of stopping a transaction because you don’t have any money, the bank approves the transaction and fronts you the cash – and then charges you a hefty penalty.  These fees can very quickly wreak havoc on your bank account.Fortunately, it’s fairly easy to avoid falling into the overdraft trap:  First, make sure that you’ve opted out of your bank’s overdraft protection program.  And second, watch your account very closely.  Know when you have money, and know how much you have.

3. Bottled water.  Seriously.  This stuff comes out of the faucet, for free.  You don’t need to spend money on it.  If you’re really concerned about the quality of the water in your area, invest in one of those water filters that snap directly onto the tap.  Buy a reusable plastic bottle for water on the go (they even make bottles with filters built right into the cap!).  You’ll save in the long run.

4. Unused memberships and subscriptions.  You joined the gym with the best intentions, but most days you can’t find the time to work that workout into your busy day.  So your pricy gym membership just goes to waste – and all you’ve got to show for it is a hole in your bank account.Of course, the gym isn’t the only thing that might be draining your finances:  Subscription services for things like magazines, online games, or DVDs-by-mail can do the same thing.  I’m not saying you have to give everything up – but I do suggest that you take a quick inventory and get rid of a few memberships and subscriptions you don’t use.  Cancel a few magazines, pare down your Netflix plan, and consider cancelling your gym membership.

5. Interest on credit card debt.  Need another good reason to pay down your credit card?  Think about how much money you’re losing every month when you pay interest on things you purchased months – or even years ago.  The sooner you pay down your debt, the sooner you can stop shelling out money to sky-high interest.

6. Washing clothes in hot water.  You could save a bundle (around $100, according to most estimates) on your electric bill by making the switch to cold water.  Most modern washing machines and laundry detergents are designed to get the job done without hot water.  And as an added bonus, cold water is much gentler on fabrics – so you might just stretch your family’s clothing budget, too.  Stick to cold water for most loads.

So, what do you think of my list?  Have you ever fallen victim to any of these common financial drains?  Did I miss any good ones?  Leave me a comment and let me know!