10 Money Leaks You Might Be Overlooking
By Kimberly Palmer
Money leaks come in as many shapes and sizes as there are people, and can include items as small as water bottles to as large as multiple restaurant meals in a week when you don't feel like cooking. Clamping down on them can only happen after you pinpoint just where your weaknesses lie.
"Spending money on energy drinks is a bad habit of my own," says Kerry Sherin, a marketing associate at Offers.com and contributor to the U.S. News Frugal Shopper blog. (She's trying to replace those purchases with more water consumption, as well as the free coffee provided by her job.)
Whatever money leaks are draining cash from your budget, here are 10 to be on the lookout for, along with tips for how to trim them:
1. Transportation. Whether you opt for cabs or Uber, paying to get from point A to point B can often eat a big hole in your budget. "Cab and Uber rides definitely sneak up on my clients' budgets," says Pamela Capalad, a financial planner at her Brooklyn-based Brunch & Budget firm. Even Capalad admits that in the winter her cab budget goes up. To keep it in check, she suggests leaving early for appointments, giving yourself enough time to walk or use public transportation.
2. Name-brand products. Opting for generic, whether you're talking about face cream or painkillers, can often save you a lot of money. "Most of the time, consumers choose a name-brand product for fear of quality issues," Sherin says. Instead of letting the unknown scare you off of the more affordable product, she suggests taking a close look at the ingredient lists and making an informed choice. "You'll often find that the ingredients are almost identical while the price is significantly different," she says.
%VIRTUAL-WSSCourseInline-884%3. Entertainment. Paying for cable often costs $100 a month or more, and you could spend your time outside or relaxing away from the screen instead. If you really want to watch a show, Sherin suggest turning to cheaper services such as Hulu or Netflix.
4. Grocery store 'extras.' Even if you bring a shopping list with you, it can be tempting to throw in extra items, especially when you're standing in the checkout line. "Whether it's something sweet at checkout or a bag of chocolate chips to have on hand, impulse grocery buys add up," warns Kendal Perez, a spokeswoman for the website CouponSherpa.com and contributor to the U.S. News Frugal Shopper blog. She suggests shopping as quickly as possible -- and exiting the store with only the items that were on your list in your bags -- to avoid this problem.
Capalad says the same principle applies to drugstore shopping trips. She often notices her clients will walk out of the store with extra gum, a new ChapStick flavor, makeup and other small items they hadn't intended to buy. "I've seen between $200 and $400 a month often go unaccounted for when you're not taking a close look at your spending at the drugstore," she says.
5. Bank fees. Each time you visit an out-of-network ATM, you could pay $5 extra just to access your cash, Perez warns. If you withdraw money several times a month, thesefees can really add up. She suggests using only in-network ATMs, withdrawing money directly from the bank or taking out extra cash at the grocery store checkout instead.
6. Pricey hobbies. Craft supplies and camping equipmentare just a few of the hobby-related costs that Brandon Marcott, a financial adviser and founder of Edify Financial Planning in Waukesha, Wisconsin, sees go to waste. If you have a hobby that you no longer feel excited about, then you could sell those supplies and free up your budget, as well as space in your home.
7. Wasted energy. LaTisha Styles, founder of Young Finances and contributor to the U.S. News Frugal Shopper blog, says people often waste hundreds of dollars a year on electricity and gas bills because of poor insulation in their homes. "Take the time to check doorways and windows for air leaks, and seal up any cracks you find," she suggests.
8. Your phone bill. Phone bills often come with hidden extra costs, including overage fees or unnecessarily pricey data plans. Styles suggests reviewing your most recent bill to see if you could switch to a cheaper planor even find a cheaper service provider.
9. Auto insurance premiums. "Once people find auto insurance they're happy with, it's really easy to forget about it, even after premiums go up a few percent every year," says Ben Wacek, a financial planner and founder of Wacek Financial Planning in Minneapolis. When his clients call to ask for new quotes every year or two, often they are rewarded with lower premiums.
Paula Pant, founder of the website AffordAnything.com and contributor to the U.S. News Frugal Shopper blog, adds that other forms of insurance can also have subtle premium increases that are easy to ignore or miss. She suggests reviewing health insurance and homeowners insurance premiums, too. "Pick one day a year to review all your policies and spend the day reassessing if you have the right coverage levels and shopping around for quotes," she says.
10. Takeout. Services such as Seamless and GrubHub make it so easy to order food online that you can do so without thinking through the impact it will have on your budget, Capalad warns. "Whether you're ordering lunch during a busy day at work or coming home and finding nothing in the fridge, it adds up," she says, noting that she suffers from this challenge herself. After cancelling her Seamless account, she started saving an extra $200 a month.
There are many ways to mindlessly overspend each month, and cutting back on all these small costs can add up to significant savings.
Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at email@example.com.