Do you ever sit and wonder where the heck all your money is going? We all have spending leaks that slowly eat away at our finances. And much like a drippy faucet that slowly leaks water, even a small spending leak can add up to big money over time. Here are a few of the most common ways people waste money. If they sound familiar it’s time to find a way to plug those spending leaks.
Carrying a Credit Card Balance
I know credit cards are really convenient and the bonus point rewards are pretty neat too. I usually use mine for $50 gift cards at Home Depot. But all that convenience comes at an awful price if you carry a balance on your card. For example, let’s say you have a credit card balance of $2,000 which is pretty average. If the interest rate is 15% you’re wasting $300 a year on interest charges!
To get an exact idea of how much you’re paying in interest simply divide your total balance by 100 and then multiply by your current interest rate. So if you have $30,000 in credit card debt at 18% your calculation would look like this:
30,000 / 100 = 30 x 18 = $5400 in finance charges!!
That’s a lot of cash wasted just for the convenience of using a credit card. Get in the habit of paying off your balance every month and you can save some serious money.
Paying ATM Fees
Use an ATM that isn’t a part of your bank’s network and you can expect to be charged around $3 to $5 a pop. That’s a ridiculous charge just to access your own money. Plan ahead and make sure you have access to a free ATM in a pinch. If there are no branches around you can always make a small purchase at a supermarket and get some extra cash back at no charge.
Paying for Things You Don’t Use
We all sign up for things with the best intentions of using them, but for some reason or another we just never get around to using them. How many things are you paying for that you never even use? Think about gym memberships, magazine subscriptions, and the like. Are you paying for the Ultra-Super-Deluxe movie package with your cable provider even though you never have time to watch movies? Are you subscribed to premium newsletters about investing in gold or penny stocks or foreclosures even though you never have any money to invest? If you’re paying recurring charges for a service that you never use it’s time to cancel.
Buying Premium Gas
Most cars run perfectly fine on regular gas and if you’re paying for premium you’re wasting money every time you fill up your tank. Check your owner’s manual too see what grade of fuel your car requires. Unless it specifically says to use a higher octane, skip the premium. And while you have the owner’s manual out check the maintenance schedule to see how often you should get the oil changed. The old rule of thumb was always 3,000 miles, but engines are more efficient these days and many only need the oil changed every 5,000 or 7,000 miles. If you’re having it changed more often than that you’re just throwing your money away.
Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at WealthyTurtle.com.