Are you constantly running out of cash partway through the month, and at a loss as to where the money is going? You may be falling prey to hidden budget-busters – expenses that are so small you don’t realize their cumulative effect on your budget.
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Here are five of them to consider, and we suspect you may think of others that fit your case once you get into the expense-tracking mindset.
1. Daily Snacks – It is convenient to stop by the vending machine at work to buy candy bars, sodas, chips, or other daytime snacks – too convenient. Because each purchase is a relatively small amount, we forget how much they add up. This is also true for your morning cup of coffee at the local Starbucks (NASDAQ:SBUX), or travel snacks if you have a significant commute. Assume one coffee at Starbucks and one vending machine soda and snack per day. This is likely to cost you around $4-$8 per day. Over the course of a 260-workday year, that adds up to $1040-$2080 per year. Could you find a better use for a few thousand dollars? You can save well over half of your snacking expenses by buying bulk snacks and bringing a healthy portion from home – or you could save 100% by cutting the extra snacks out completely. You will get just as much thanks from your body as you will from your wallet.
2. Neglected Maintenance – Missing caulking and weatherstripping, leaky faucets, insufficient insulation, poorly maintained A/C systems and water heaters – all of these things can cost you money directly through higher utility bills and indirectly through potential early replacement or damage. Utility companies often have audit programs to help you identify areas where you can save. Don’t forget the maintenance on your car as well. Improperly inflated tires and infrequent oil changes increase the wear on your car and cost you subtle yet important gas mileage.
3. Unnecessary Trips – List all of the car trips that you could have avoided, add up the miles, and convert them to dollars using your gas mileage and the current cost of gas. You will be amazed at how quickly the gas costs add up. Try to “bundle” your trips whenever possible.
4. Eating Out – According to The Simple Dollar, the average American dines out for a little over 18 meals in an average month, and the average cost of a meal is $12.75 per meal. Cut the number of times you eat out in half and the savings are almost $115 per month, or well over $1300 per year. Depending on where you live and what you like to eat, your savings may vary – but they are still likely to be significant. Not willing to cut down on your dining out? You can still save a decent amount of money with simple steps. Drinking water instead of a beverage with your meal will typically save $1.50-$3.00, and more if alcoholic beverages are included. Try a less expensive entrée and skip dessert.
5. Impulse Buys – The old adage “Never shop while you are hungry” is wise. The temptations of the cookie and chip aisle are harder to resist, and you are more likely to buy more than you need and be less price-conscious. Meanwhile, impulse buying for non-grocery items is easier than ever thanks to the convenience of online shopping. Stick with shopping lists, and if you find interesting new items while you shop, take a day to consider how much you really need the item and whether the price is right. Odds are that they will still be there tomorrow.
One thing can help you the most with these hidden budget busters – bringing them out into the open. Start keeping track of your daily purchases, and make a budget. There are plenty of mobile apps to help you track your spending in near-real time, so there are no excuses about being too busy.
It is within your power to control these budget busters, and it is up to you as to whether it is important enough to do anything about them. Make the right choice and enjoy the subsequent savings.
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