Have you ever had one of those moments when you find yourself relying on your next paycheck and wondering, “Where has all my money gone this month?” You’re not alone. More than half of Americans find themselves living from paycheck to paycheck with less than $1,000 in savings.
With ever-rising rents, surging housing prices, creeping inflation, hefty bills, astronomical daycare costs, looming student loans, and the increasing cost of daily living, it feels almost surprising that we’re not dealing with even bigger economic issues! Life is costly. Numerous factors contribute to your dwindling bank account, but unexpected costs and fees should not be among them.
Here are five surreptitious expenses that are harming your budget and ways to fix them:
1. SUBSCRIPTION SERVICES
Just how much television do you really need? There are several options: Netflix, Cable, Hulu, Amazon, Apple TV, and more. Surely you have enough. Consider limiting your subscription services to the ones you truly can’t do without.
2. THE LATTE FACTOR
It’s a common concept that Starbucks isn’t for those on a tight budget. But have you considered other “Latte” factors? They could be the small, routine purchases that eventually accumulate and affect your month’s budget. An unexpected takeaway lunch might seem minor, but if not accounted for, could start creating sizable dents in your budget. Little expenses can cause significant damage. For a month, keep a detailed record of all your expenses to see where cutbacks and better planning are possible.
3. BEING UNPREPARED FOR ANNUAL COSTS
Have you ever been unexpectedly hit with an insurance premium or car registration fee? These expenses can surprise you and are frequently hefty. To counteract this, take the overall cost, divide it by 12 and transfer this sum monthly into a separate savings account intended specifically for these costs.
4. AUTO PAY
Here’s a sneaky way some companies boost their annual income: Auto Pay. They pitch it as a convenience, encouraging you to set and forget. And that’s precisely the issue. Some companies rely on you to forget such payments and continue charging for services you no longer use, like an old radio subscription from a second-hand car. Autopay is convenient for necessities like mortgage or student loans, but potentially disastrous for optional services that keep deducting your account quietly. Be alert with auto pay and consistently review your statements to ensure you aren’t being charged for a cancelled or unused service.
5. THE “SALE” TRAP
How often have you bought something just because it was marked down? These purchases, even at a lower cost, accumulate and can crimp your budget. Resist the temptation of a sale. Before buying, ask yourself if you’d still want it if it were twice the price. This way, you prioritize necessity over impulse.
Have you fallen prey to these hidden expenses? What strains your budget?
