It is much easier to waste money than most people realize. You might have the best of intentions to control your spending, yet money still leaks out of your budget without you even noticing. These budget leaks might not be huge, but they can add up to cost you big time at the end of the month ? or the end of the year. Just by taking a little bit of time and refining your budget, you would be surprised at how much you can save. You might have to cut out a few things that you usually indulge in, but the sacrifice will be worth it in the end.
Leak #1 ? Your Cell Phone Bill Is Likely The Biggest of the Budget Leaks
I?ve written before about how to save money on your cell phone bill. A survey done by Harris Interactive and Coupon Cabin showed that nearly half of Americans are spending at least $100 on their cell phone bills, what?s worse is 10% were spending at least $200 per month. My wife and I are right in the middle of and will be switching to a no-contract carrier this Spring when our contract with Verizon is up.
If you?re spending over $100 on your cell phone bill, that isn?t a budget leak, but a budget hemorrhage. There are many options to look at if you want to cut that bill with carriers like Republic Wireless or Straight Talk being the ones we?re looking at most closely as you can generally get plans for $50 or less. Just think of what you can do with that extra money in your budget each month!
Leak #2 ? Extra TV Channels
If you have a cable subscription, think about what channels you actually watch, and which you could live without. You might be paying for an expanded cable package that goes mostly unused, meaning that money is wasted from each month. Call your cable company and ask about alternative packages that better suit your needs. If this isn?t an option for you, you can always call in every few months to try and get a discount on your service.
What if you want to plug this budget leak altogether though? Many have cut the cord to cable which allows them to save a significant amount of cash each month. If most of what you watch is on the major networks or cable channels then you?re likely able to get most of your programming for far cheaper.
Leak #3 ? Gym Membership
Having a gym membership is a great idea? IF you use it! However, if your membership simply gets deducted from your bank account each month, without any exercising being done, you are wasting money. I know it might fly in the face of another goal you have, but if you need to free up cash this is one of the easiest budget leaks to fix. Don?t worry; there are still many ways you can work out for free while at home that will allow you to keep that cash in your pocket and not in someone else?s.
Leak #4 ? Credit Card Debt
There are plenty of reasons to use credit cards, and there is nothing wrong with having them in your wallet. It?s no surprise that I enjoy churning rewards credit cards to fund free or cheap trips, but if you?re not paying off your credit card bill each month then it?s not worth it.
This issue really goes beyond being a budget leak and more so towards living with debt ? which is a different issue altogether. If you?re in debt and still using credit cards, then do yourself a favor and set them aside until you can pay off your debt and get back on the track financially.
Leak #5 ? Magazine Subscriptions
This can be a sneaky one, because you probably don?t think about them very often. How many magazines are you subscribed to? There is more than enough reading material available online today, and almost all of it is free to access. There is very little reason to pay for annual magazine subscriptions anymore, unless you are very interested in a specific niche field served by a specific publication. Consider pairing back your magazine subscriptions to find some savings.
What are some of the other budget leaks I missed? What is the first thing you look to cut when wanting to save money in your budget? How much is your cell phone bill?
Photo courtesy of: 401kcalculator.org
Wise Dollar
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I cancelled my gym membership because I hardly go to gym nowadays especially this season, kinda busy preparing the gifts and with work. So I just use my pair of dumbbells and other equipment at home. That being said, I am planning to hit the gym again in January to lose some weights because of the feast.
I work out at home as well – much cheaper that way and can do it whenever I want.
Guilty with the magazine subscriptions! I know there are a lot of available online content but it just feels extra nice when your flipping actual glossy pages!
Understood. Though that also creates clutter – which I like to have less of.
I am doing pretty good with all of these. And, believe it or not, I am actually considering joining a gym for winter. There is no contract though, so I don’t have to commit. I would rather exercise outside when it’s nice out.
That’s nice you wouldn’t have a contract to deal with. We didn’t have one at our last gym either, but we never went. I thought I’d never work out at home, though am doing now more than ever.
We are 5 for 5 on that list of staying away. I love going to the gym and had a membership for years, but I would go all the time because I love to work out. Recently all the guys in the neighborhood would go and play basketball on Saturday nights, but once that faded away we looked at other options. We have a trainer in our neighborhood that makes a tremendous amount of money from online training and she invited my wife over to work out and we figured they just wanted to make a sale, but she just wanted a work out partner and my wife works out and helps shoot the videos for her to post. So my wife gets free workouts and a trainer while helping a neighbor. Kind of a win-win all the way around.
That’s AWESOME Lance! What a way to save some money, still get a workout in and help a neighbor. That’s a win in my book.
I have had to advise a number of clients to cancel gym memberships. Depending on how much you pay per month, if you don’t go 4-5 times a week, you will probably be better off buying individual classes or getting deals via Groupon.
That’s my exact thought Shannon. We used to have a $50/month gym membership and it was doing us nothing. We canceled instead and took the money to buy an exercise bike. I still use it today and can use it whenever I want.
I have a couple of these budget leaks myself. I am trying to close some of them up. I’ve not renewed my magazine subscriptions this year and I’m working on my credit card debt. I use my gym membership regularly, so I’m keeping it intact. But I need to work on getting my cell phone bill reduced…
Sounds like you’re definitely on the right track there Kayla. I can’t wait til we can ax our cell phone bill in 4 months! 🙂
Great to know that we don’t have any of these leaks listed above.
My company pays for my cellphone, my wife has the cheapest option
We don’t have TV so no need for cable subscription
No need for gym membership when there’s a gym at work
We always pay credit card amount in full
No magazine subscriptions, we borrow books and magazines from local library.
But I can definitely see how easy it is for the average Joes to have multiple leaks. Great list.
Sounds like you’re killing it Tawcan! It can definitely be easy to be guilty of a number of these, and they can really add up.
Cell phone has definitely become a necessity for our society now. When you add in the cost of data plans it adds up. But is a switch really worth it if connection and reception are terrible, not to mention service? If it’s that much cheaper there is probably a reason.
All the items lead to leaks, but if you get use out of the items I think they are all worth it. If you enjoy reading magazines or working out every day then those things should be included in your budget.
That’s a good point Nick, though I have a good number of friends who have no-contract plans who’re just as happy as we are with our service. Since we work from home, we’re on wi-fi 99% of the time so there’s no point in paying extra for 4G service if we don’t use it.
I agree there is a balance to be had. That’s definitely the case. That said, I would disagree that if you get use out of them they should be in your budget. If you’re in debt or not investing then you need to be finding ways to take care of that and quite often it’s the leaks that are holding people back.
Our phones are a budget leak because the cheap carriers don’t work in our area. I’m hopeful that someday we will have more options. I also think food and entertainment can be huge budget leaks if you aren’t careful. I’m all for a splurge here or there, but those are things we constantly have to re evaluate to make sure we’re on track.
That’s a great point Kim. We can run into that as well since we’re home so much which is part of the reason why we track our spending.
I do a good job with my cell phone – I keep the payment to around $70/month. But, I have a small data plan. I get around it by finding free wifi – it’s more common than most think.
Another budget leak is car payments. I have a friend who bought a car he couldn’t afford and took out a 9 year loan(!). He ended up not liking the car and traded it in for something else. The kicker is that he traded it in for less than what he owed on it. The dealership rolled that balance into his new car loan. At the end of the day, he was paying a car loan for his car and a car he no longer owned!
That’s cool you’re able to keep your bill to $70/month. I can’t wait to get ours cut to much closer to that.
I could not agree more Jon! I actually have a post coming up on FR about this soon. As to the 9 year car loan – OUCH!
Thank you for sharing valuable information and I hope keep posting.