We all have financial goals we want to reach, whether it’s saving for a vacation, a down payment on a house, or for retirement. However, even before we focus on those goals, we may find ourselves not being able to fully reconcile our budget and actual expenses. We expect that there would be more at the end of the month, don’t know where some of our money has gone.

One of the reasons for these gaps is that we may not realise that we’re leaking money, which is leaving us short of our goals and unable to reach our financial aspirations. Here are six ways that you may be leaking money without realising it:

 

1. Unused Subscriptions

Are you paying for subscriptions you’re not using? This could be anything from a gym membership to a streaming service. When you signed up, it may have seemed like a good idea, but the truth is that you have not been using or capitalising on those subscriptions to the degree you had anticipated.

Also, as subscription services, they are usually set up to charge you recurrently, so sometimes you don’t even remember that you have these automatic deductions, but your credit card is being charged or your bank account is being deducted on a regular basis. To get a handle on all of these charges, take the time to review your bank statement and cancel any subscriptions you’re not using, or are not using enough to justify the expense.

 

2. Late Fees

This is one of the conveniences that is often overlooked. If you’re consistently late in paying bills, you’re likely paying to be late fees. Although the fee might be minimal, less than USD 5.00 or USD 10.00. if you are always late in paying multiple bills, these charges can add up. Also, sometimes, companies will offer a small discount if bills are paid on time, which could be a way of saving some money.

A good way to keep track of your bills is to create a calendar will the billing dates and due dates for all of your main bills. For ongoing services, bills are issues on or around the same date every month, with the due date for payment also set on or around same time every month. Depending on the schedule in which bills are received, timetable some time every month, say every two weeks, when you will sit and pay all outstanding bills BEFORE they are due.

 

3.  Bank Fees

The fees charged by your bank can be a major leak in your finances. Some of the charges include account maintenance or servicing fees; fees for withdrawals; fees for withdrawing money from ATMs outside of your bank’s network; overdraft fees; fees for printed account statements, to name just a few.

To limit or avoid this leak, there are several things you can do. First, check with your bank whether how you might be able to avoid some of these charges. Occasionally banks create new accounts for which certain fees are not charged, such as account maintenance fees or withdrawal fees.  Second, carefully monitor your account to ensure that it remains in credit or above the minimum threshold required for your account, to avoid overdraft charges and other penalties. Third, try to withdraw cash from your bank’s ATMs only, to avoid cross-bank transaction charges. Finally, sign up to receive your bank statements via email, as these are usually delivered for free, as opposed to printed statements which usually have a charge attached.

 

4.  Premium Delivery Fees

There can be a distinct attraction to having expedited delivery services, as it scratches our itch for instant gratification. Shipping of purchases no longer takes weeks, but rather days or even hours. However, such services usually come at a premium, when on closer review, especially for subscription services (Yes, Amazon Prime, I’m talking to you!), the odds are that you may not be using the service enough to justify the price.

Further, many stores offer free shipping if the total sale is over a specified amount, in addition to more budget-friendly delivery options that just take some time. Consider these alternatives to avoid premium delivery fees, which again can add up over several months or within a year.

 

5.  Impulse Purchases

if you are conscientious, you would have made allocated some discretionary spending money. However, if you are not careful, window shopping online or in person can lead you to buy on the spur of the moment and blow through what little spending money you had allocated for the month.

It is thus important to keep in mind that impulse purchases can add up quickly, especially if they’re made on a regular basis. Instead, try to stick to your budget and if you feel the urge to buy something, sleep on it or wait a day or two before making the purchase to see if it’s something you really need.

 

6.  Eating Out Frequently

Once again, although you may have included eating out in your budget, these are expenses that can quickly add up, especially if you are indulging frequently. For example, is it really necessary to go to the coffee and snack shop every day?

Do consider cutting down and going just a few days a week. And with the money you would have saved, you can then put it towards other expenses, your savings, or even towards investment vehicles that are part of your wider financial plan.

 

Bonus:  High Utility Bills

Leaving electronics on, not turning off lights, leaving water taps running idly, running the bath every day, or doing laundry several times a week for minimal loads can all add up to the utility bills. Moreover, these days, we are expected to be more environmentally aware and conscientious about our environmental footprint.

Try to be mindful of your utility consumption. For example, consider turning off electronics when not in use, switching to energy-saving light bulbs, putting lights on timers, turning off water taps and taking showers. Putting these and other measures in place will not help you to save money, but also reduce your carbon footprint and your impact on the environment.

 

In summary, these seven ways you might be leaking money may seem small, but over time, they can be huge expenses, and consequently huge holes, in your finances. By being mindful of your spending habits and making changes where necessary, you can reach your financial goals and live a more financially secure life.

 

 

Image:  Emil Kalibradov  (Unsplash)