Put these tips to work and get a healthier bank account — starting today.
If someone were to take a large amount from your bank account, you’d most likely notice when a transaction was declined or a payment bounced. But how quickly would you notice if a small amount were being deducted, say $5 or $10, every month?
Most of us have a general idea of how much money is in our accounts, but we pay little attention to each expenditure — especially if your bills are set on autopay. So while the ship may still be afloat, small money leaks could end up wreaking havoc below the surface. Here are a few unexpected ways you might be siphoning cash — and how to manage your money and plug those leaks.
Food wasteAsk the average American where they overspend, and chances are, they’ll mention food, both at restaurants and the grocery store. Yet while you may shovel a large portion of your budget toward this expense, you probably waste a large amount of it as well. A study by the Natural Resources Defense Council found that Americans waste 40% of their food purchases — which equates to an average of $2,000 per year, per household. Meal planning and resisting the urge to buy in bulk can do wonders when it comes to cutting down on waste and combating this socially prevalent money leak.
Bank feesBanks have found plenty of ways to cash in on fees, and many act as money leeches on your accounts. Case in point: overdraft fees. Before 2010, many banks automatically equipped accounts with overdraft protection, resulting in an average charge of about $35 for each transaction that put a customer in the red.
However, after enactment of the Overdraft Protection Law, banks were required to get customers to opt in to receive the “protection.” A 2014 study conducted by the Consumer Financial Protection Bureau found that opted-in customers paid seven times more in overdraft and nonsufficient-funds fees than those who hadn’t opted in.
Bottom line: It’s important to know what you’re paying for. If you’re paying a monthly fee simply to access your funds or for services you don’t need, it’s time to re-evaluate how you bank and whom you bank with.
Energy hogsFor most people, energy costs fluctuate throughout the year. But the change in price isn’t always a direct reflection of the weather. It can also reflect the energy-saving efforts you’ve taken (or haven’t taken) within your home or apartment.
Programmable thermostats, for instance, create a comfortable environment when it matters most — when you’re actually at home. During the winter, try thermal curtains or use draft stoppers to keep the hot air inside, and close your shades during the summer to keep things cool. If your heat or air conditioning is overworking during the hours you’re away, you could be wasting hundreds of dollars each year. Other energy hogs that could be costing you big? Outdated appliances and incandescent light bulbs. Make a few small changes, and you could spend less all year long.
Subscriptions and membershipsSubscription services are easy to sign up for, but most of us aren’t as quick to put a stop to them when they’re no longer useful — probably because a $10 monthly charge isn’t a noticeable enough hit to our checking accounts. But if you’ve signed up for more than one of these services, whether it’s getting razors in the mail or a cooking magazine you never crack open, those small fees can quickly add up. Take a moment to audit your subscriptions and say goodbye to the ones you no longer use.
Another potential money drain: gym memberships. If you joined with the January crowd but didn’t stick to your gym routine, it may be time to look into the financial benefits of canceling your membership and searching for apartments with fitness centers.
Price creepCable and internet providers are frequent culprits of “price creep.” New-customer pricing eventually expires and sometimes fees get tacked on incorrectly. If you aren’t paying attention, you could be paying far beyond your budgeted amount.
Just remember: Every little bit helps! With a little planning and some thoughtful decision making, your bank account could become much healthier. Just put these tips to work for you and plug up those money leaks.