9 Reasons Your Money is Disappearing

Money disappearing from wallet

If it seems like you can’t get in control of your finances, there are most likely many items in your budget that you can probably cut out completely, or at least spend less money on. A lot of these little things can add up quickly. Even if all these fixes only end up saving you $20 a month, you’ll have an extra $240 in the bank at the end of the year.

Take a look at how your money may be getting away from you without you realizing it.

1. Not Taking Debt Seriously

According to a 2013 report from the NFCC, 1 in 5 Americans think that carrying credit card debt over each month is a responsible way to manage finances. (Hint: It’s not.) It’s silly to buy something you can’t afford, and then pay even more for it in interest.

The widely recommended way to pay down debt is to start paying off the accounts with the highest interest rate first, while reducing your spending lifestyle by 30 percent. For instance, if you eat out three times a week, cut it down to only once a week and bring a sack lunch the other days. Creating a budget will help you determine where these reductions can be made.

2.Home and Energy expenses

Did your dad ever ask if you were raised in a barn? “Are you trying to heat the outdoors?” Leaky faucets and unsealed doors and windows are energy pirates, but they don’t typically cost a lot to fix. Try caulking or using window tape seal to fix water or air leaks – but don’t pay someone else to do it. There are plenty of tutorials on the internet for most small home repairs.

And even though room temperature is defined at 70 to 72 degrees, try to keep your thermostat at 68 – you probably won’t feel the difference, but it’ll definitely show on your power bill. Turn off and unplug appliances that aren’t in use, and remember to turn out the lights when you leave a room. It pays to listen to your parents.

3. Overpaying for a smartphone/data plan

Track how many minutes, messages, and how much data you’re actually using. If you’re incorrectly estimating how much you use, you are just wasting money. Most providers don’t have “rollover,” so you’re paying for a product you’re not ever going to be able to use. Keep track for a couple of months, and if you’re consistently using much less than you’re paying for, speak to your provider to negotiate a new plan.

*Beware of in-game purchases as well. Sure, you may have beat the super-boss, but those $1 and $5 power-ups WILL add up, and what did you really gain?

4. Hidden Fees

Monitor your accounts often, and beware of cost creep and zombie charges. Cost creep refers to an incremental price increase for services that were previously unspecified, or free, such as paper statements or digital cable boxes. If you notice these creeping rates that you didn’t approve, call the company to let them know you’ve noticed and you’d like to return to the rate you agreed upon.

When you cancel a service, such as bank accounts, phone, or cable, sometimes companies will charge “zombie charges” – they’re fees deducted from your account after you’ve already canceled, while the company “processes your request.” When you cancel a service, be completely clear that you want the charges to end immediately upon cancellation, and take note of the date and who you spoke to. If you’re still getting charged, it’s time to make another call.

5. Buying Instead of Renting Equipment

Don’t buy a carpet shampooer when you’re only going to use it once or twice a year. Same goes for paint sprayers, wheel barrows, landscaping tools, flatbeds, and other heavy-duty equipment that you can rent for a few days at a fraction of the cost.

At Home Depot you can buy a pressure washer for around $100, or rent one for $35 a day. If you think you can finish the task in less than 4 hours, it’s even cheaper (about $25), and will save you serious storage space.

6. Buying Low-Quality Products

If you shop cheap instead of smart, you may be throwing away money unnecessarily. If you are spending money on cheap appliances and equipment that needs to be replaced often, it makes more sense to buy the more expensive version that may last longer. For example, rather than buying paper plates and cups, it’s better to invest in quality dishware that doesn’t have to be replaced each month and won’t take up space in landfills.

For things like toilet paper, hand soap, garbage bags, and many foods, it’s ok to buy cheap; generic brands are often the same quality, but cost a fraction of the price of name brands.

7. Going Crazy During Sales

You really want that cute scarf on sale, but are you really going to wear it very often? Instead of going crazy during a store’s big event, invest in a few quality pieces that will last a long time and be worn more frequently. Before buying that new pair of jeans, ask yourself if you really need them. Chances are, you don’t. Use this same tactic when you’re thinking of buying soda, coffee, popcorn at the movies, bottled water…we could go on forever, but the point is to only buy things you need.

8. Making Late Payments

A $10 late fee may not seem like much, but when it happens each month, it can add up – not to mention, lower your credit score. Payment delinquency can lower your credit score up to 100 points, and a negative ding can affect your credit for seven years. This means higher interest rates on car loans and mortgages, costing you thousands of dollars in the long run.

9. Giving in to Your Kids’ Demands

Even without buying toys, children cost a LOT of money. And if you’ve ever taken them to the toy section, you know that they’ll ask for every super hero figurine they see and throw a tantrum when you don’t buy it for them. Don’t give in just to avoid a scene; even small expenses add up over time and can cause strain on a household budget. Explain to your children how money works early on – that buying a $20 toy means you have to go to work for X amount of hours. Help them understand the value of working to get what they want. (Tip: This works for you, too! When considering buying something, ask yourself if it’s worth the amount of time you have to work to afford it.)

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