There are little money leaks that can sink your monthly budget. Most of them are unnoticeable unless you track your spending. If you’re already budgeting but still end up overspending, then check out for these money leaks in your spending habits.
1. Transaction Fees
Late payment fees and other financial transaction fees can leak money out of your budget without you noticing it. These are small amounts that you don’t think will affect your budget that much. Once they accumulate, that’s when you realize they already ate a huge chunk out of your monthly budget. This applies to credit card fees, insurance fees, loan fees and online money transfer fees. Check your monthly statements so you can plan ahead.
TIP: Make it a habit to always check your transaction receipts for any hidden fees or charges. Also, pay your bills on time to avoid incurring late payment fees and other penalty charges.
2. Impulse Buys
Little purchases that you make several times a month won’t be little once added up. Especially if these items are just trendy for a time or they’re for one use only. That one cup of coffee a day can eat a big chunk of your budget. This is one of the little money leaks that can sink your budget. It can be avoided if you plan and list down what you’re actually going to buy in a supermarket, for example. The best way is to set aside a budget for it so you’re prepared for it. You can set aside money for fun that you can spend however you want.
TIP: Make a wish list of big and small items that you need and want to buy and set aside money for them. Don’t buy it if it’s not on your list and it’s not covered in your budget yet.
3. Discount Buys
Just like impulse buys, discount purchases are also a common cause of overspending. Sale items are often packaged attractively and the festive spirit of the “sale day” event makes it even more enticing. Making transactions online only makes things easier to splurge. Not all discounts are great buys though. If you’re buying an item only because it’s on sale or because you have a coupon, then you might be wasting your money.
TIP: Having a wish list and the budget to buy the item on that list is one way to avoid spending on discounted items that you don’t really need. If you get an item on your wish list at a discounted price, then consider it as savings.
4. Wasting Products
Sometimes we buy in bulk because of the huge discount. Then we find out that we’re not really fond of the product so we end up giving them away or disposing of them in the trash. Or they expire before we can use them so they end up in the trash. This is why a list of what you need to buy is important. It is also important to list down exactly how much you need so you maximize your use of the items. Subscriptions to services that you don’t actually use regularly is also a leak in your budget. So review your subscriptions and see which ones you don’t need or you can downgrade.
TIP: Preparation is key to ensure that you use up perishable goods before they expire. Meal prepping is one way to ensure that you don’t end up throwing away produce. It also allows you to control what you eat so you can choose to eat healthier meals.
Do sometimes feel that you are living beyond your means? These money leaks could be part of the problem. To ensure that you don’t fall victim to these little leaks that can sink your budget; become more aware of your spending habits. Learn how to discipline yourself so you can figure out how to spend your money wisely.