Making a budget can be tough, so before you start to make major changes to your lifestyle, it helps to identify ways where you might be wasting your money without knowing it. Here’s a look at some ways that your money might be disappearing.
4 Ways You’re Wasting Your Money
- Credit card interest: Credit cards can have gruesome interest rates. Every dollar you pay in interest is a dollar you won’t be able to spend on crucial household expenses, retirement or an education for your children. Sometimes, putting bills on the credit card might be the only option, but do your best not the make a habit of it. Avoid using credit for large purchases, and be careful not to accumulate a bill that you won’t be able to pay on time. Consumer debt can be a huge money drain, even when it is relatively small.
- Buying high-octane gasoline: Some people mistakenly believe that high-octane gas is somehow better for your car. It isn’t. According to the Federal Trade Commission, unless your car specifically requires a higher octane, buying premium gas provides no benefit to your car. Buying expensive gas that you don’t need can cost thousands of dollars every year.
- Banking fees: It might not appear like your banking fees are a big deal, but they could be adding up. There are plenty of banks that offer no-fees checking or saving accounts as long as you maintain a minimum balance. Opening up an account like this and leaving the minimum amount in at all times will save you hundreds of dollars every year.
- Gym membership: It’s great to start exercising, but 67 percent of people with gym membership no longer use them. Gyms’ business models rely on the majority of their customers paying them for nothing. Try to be honest about the amount of times you will realistically visit the gym. It might be far cheaper for you to pay for each visit than to get a monthly membership. Alternatively, if you want to start small, try doing simple body weight exercises at home, or going for a run.
With the normal monotony of life, it’s easy to forget about small incremental expenses. Sometimes, this leads to us paying large sums over time for things we don’t need. Hopefully, this list will help you to start thinking more critically about how many of those purchases are really benefiting your life. Go through your bank statement and find any recurring payment. No matter how small it seems, consider where it comes from and whether or not it actually improves your life. Any recurring expense will add up over time.
Kevin D. Judd is a DC bankruptcy lawyer who is committed to providing his clients with a gateway to financial freedom.