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How to Take Control of Invisible Drains on Your Finances

Don’t let the little things siphon money from your account.

If someone were to take a hefty amount from your bank account, you’d most likely notice, especially if a transaction was declined or a payment bounced. But how quickly would you notice small money leaks, say $5 or $10, every month?

Most of us have a general idea of how much money is in our accounts, but we pay little attention to every single expenditure—especially when bills are set on autopay. So while the ship may still be afloat, small money leaks could end up wreaking havoc below the surface. Here are a few unexpected ways your expenses might be siphoning cash—and how to plug those leaks. Just remember: every little bit helps! With a little planning and some thoughtful decision making, your bank account could become much healthier.

Five Unexpected Money Leaks

  1. Food waste. Ask the average American where they overspend and chances are they’ll mention food, both at restaurants and the grocery store. Yet while you may shovel a large portion of your budget toward this expense, there is probably a large amount of waste as well. A study by the Natural Resources Defense Council found that Americans waste 40 percent of their food purchases—which equates to an average of $2,000 per year, per household. Meal planning and resisting the urge to buy in bulk can do wonders when it comes to cutting down on excess spending and combating this socially prevalent money leak.
  2. Bank fees. Banks have found plenty of ways to cash in on fees, and many act as cash parasites on your accounts. Case in point: overdraft fees. Before 2010, many banks automatically equipped accounts with overdraft protection, resulting in an average charge of about $35 for each transaction that put a customer in the red.
    However, after enactment of the Overdraft Protection Law, banks were required to get customers to opt in to receive the “protection.” A 2014 study conducted by the Consumer Financial Protection Bureau found that opted-in customers paid seven times more in overdraft and nonsufficient-funds fees than those who hadn’t opted in. If you’re paying a monthly fee simply to access your funds or for services you don’t need, it’s time to re-evaluate how you bank and whom you bank with.
  3. Energy hogs. Energy costs typically vary throughout the year. But the change in price isn’t always a direct reflection of the weather. It can also display the energy-saving efforts you have or haven’t taken at home. Programmable thermostats, for example, create a contented environment when it matters most—when you’re actually at home. During the winter, thermal curtains or draft stoppers can keep the warm air inside, and closing your shades during the summer will keep things cool. If your heat or air conditioning is overworking during the hours you’re away, you could be wasting hundreds of dollars each year. Other overlooked energy suckers that could be breaking the bank slowly, are outdated appliances and incandescent light bulbs.
  4. Subscriptions and memberships. Subscription services are easy to sign up for, but most of us aren’t as quick to put a stop to them when they’re no longer useful—probably because a $10 monthly charge isn’t a noticeable enough hit to our checking accounts. But if you’ve signed up for more than one of these services, whether it’s getting razors in the mail or a cooking magazine you rarely crack open, those small fees can quickly add up. Take a moment to audit your subscriptions and say goodbye to the ones you no longer use.
    Another potential money drain is a gym membership. If you joined with the January crowd but didn’t stick to your gym routine, it may be time to look into the financial benefits of canceling your membership and searching for apartments with fitness centers or even investing with an upfront, one-time fee for a workout app.
  5. Price creep. Cable and internet providers are frequent culprits of “price creep.” New-customer pricing eventually expires and sometimes fees get attached incorrectly. If you aren’t paying attention, you could be paying far beyond your budgeted amount.

Originally published July 20, 2016. Updated October 26, 2017.

How have you learned to eliminate money leaks? Share your tips in the comments!

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