Does money seem to evaporate for you every month, leaving you in a state of befuddlement, wondering where the heck it went?
It’s leaking out your bank account, but you can stop it if you can figure out where the leaks are! Money always leaves a trail and with a little detective work, I’ll show you hundreds – even thousands – of dollars you’re wasting each year on things you’re not even using!
Grab your bank statements, a highlighter, down a shot of confidence and compare your statement with this list of common budget leaks. (Don’t chicken out on me…however painful it may be to face the truth, your budget will thank you when we’re done!)
Groceries that spoil: $341 – $569 wasted annually per person
- Food is one of your biggest monthly expenses! How much of it are you wasting? US News Money reports that Americans typically waste 25% of the foods and beverages we purchase, which totals $1,365 to $2,275 wasted money for a family of four. Yikes! That’s like throwing out a fun vacation every year!
- Plan meals ahead of time
- Shop more frequently and buy only what you can use before it goes stale, expires or molds
- Freeze food if you are not going to be able to use it by the expiration date (Check out this Ultimate Guide to Freezing Food by Scott Bird of FormerFatGuyBlog.com for tips on how to freeze just about anything!)
- Save leftovers for lunch at work the next day
- Buy decent food storage containers to keep food fresh longer
Clean out your fridge of all the expired dressings, condiments, spoiled produce, outdated dairy, and moldy leftovers and add up how much that garbage bag of food costs. To stop wasting food:
Still worried about food spoiling? Survive on these foods that will outlast you, as listed on StillTasty.com, a site and app that can tell you the shelf life of your food. You could also stock up on emergency survival food that has a 25 year shelf life.
Health Club: $660 wasted annually per person
- A health club is only worth the money if paying for it every month is enough incentive for you to get your butt of the sofa and exercise regularly. But if you’re not showing up, cancel it! Statisticbrain.com states that 67% of people with gym memberships never use them, at an average of $55 per month fee, that’s $660 wasted annually per person, double it to $1,320 if you and your spouse are both members not using the gym!
Showing up once or twice a week? People at the front desk don’t know you by name? Divide your monthly payment by the number of times you use it to see how much it costs you each time you work out. Chances are you’re not getting enough health benefit to make it worth the money.
There are so many other free ways to get your exercise in, whether it’s using your own home gym equipment, taking a walk around the block or playing basketball with the kids in the driveway. Susan Hiscock from FitWatch.com has a great list of 10 Ways You CAN Exercise at Home Without Any Equipment if you need some inspiration.
If you decide the health club membership is not something you’re willing to give up, check with them to see if they have any incentives to help you save. Our health club takes a percentage off our monthly bill if we’ve gone a certain number of times each month. Many insurance companies also offer financial incentives if you work out regularly at your health club.
Storage Unit: $480 – $2,700 per year
- The cost of clutter is overwhelming to many budgets especially when you consider how much we spend on new “stuff” each month. But for many, parting with the old stuff is hard to do. Whether it’s sentimentality or a mindset that you might need it someday that is causing you to hang on to your stuff, a storage unit is never a good long-term solution.
Self storage units are great as a temporary landing pad for your stuff while in transition of a move. We rented a storage unit to clear out a lot of our furniture, clothing, and household items to make our tiny little 2 1/2 bedroom bungalow show better and feel more spacious to potential renters since we couldn’t close on our new home for several weeks. It paid off for us.
Hanging on to clutter long-term is an emotional decision not a financial one. While the monthly rate may “seem” affordable at an average of $40-$225 per month, stop and consider the long term costs and determine if what you have is worth spending $480 – $2,700 a year to hang on to. GoBankingRates.com brought up a great illistration of this when they mentioned “…do you really want to keep that outdated dining set from 12 years ago? That’s $21,600 you’ve spent to save money on a $700 dining room set.”
Monthly Subscriptions: Netflix, Hulu, GameFly, Sirius, Magazines & Other Services with Automatic Billing: Amount Varies
- How many little $5, $15, $25 subscriptions ding your account each month? How many of them do you use enough to make it worth the price? I took a stroll through my bank statement, and added up $55 in monthly subscriptions I was hardly using and could totally live without. “Hello you sexy extra $660 I’m now saving each year!”
Home Phone Line: $360 per year
- Many of you may have already cut the cord to your home phone, but if you haven’t it’s worth looking into. My sister-in-law canceled hers last year and saved herself $30 each month.
We did our homework and found out that it’s actually cheaper for us to keep our home phone because the bundled price for phone, cable and internet is cheaper than if we just had cable and internet. But we NEVER use it. I can’t tell you when the last time I used it was. I have no clue how many message might be waiting in voice mail purgatory, I don’t even remember how to check it so they’ll be there forever. Anyone who needs to get in touch with us has our cell phones.
If you must have a home phone, ooma, and other systems are very inexpensive.
Do the math…
Credit Card Annual Fees for Rewards You Don’t Use: $18 to $150* per card per year
- There are so many credit cards offering money-saving rewards,miles, cash back bonuses, etc. but many of them come with annual fees or higher interest rates than you could be getting on other cards. Take a look at the cards you have to determine that you’re really using the bonuses that are available to you. If you’re not, look for cards with rewards and bonuses you will use, or ones with no annual fee and lower interest. The savings will be worth it! *Source: creditcards.com
Extra Cell Phone Minutes/Data: Americans Spend $52.8 Billion/Year on Wireless Waste
- Cell phones feel like a necessity in today’s world and while we can argue the facts between it being a need or a want until we’re blue in the face, I’d have to be on the verge of starving my children before I’d willingly part with mine. But I wish they didn’t have to cost so much.
According to SaveLoveGive.com, “Wireless Waste costs Americans an estimated $52.8 billion dollars per year.” That’s a lot of billions. They offer a free service that reviews your cell phone usage and suggests the best plans for you. I plugged mine into the plan and unfortunately with our family plan of 4 phones, I was only able to cut off a few bucks a month, but every little bit adds up.
If you only use your cell phone for emergencies, buy a pre-paid plan from someone like T-mobile. For $100 you can get 1000 minutes of talk time, which will last an entire year before they expire.
Lazy Movie Rental Late Fees: Amount Varies
- I’m guilty as charged on this one. It is one of those frustrating habits I’ve struggled to break our family of doing. It feels too hard to drag my tired tush out at 8:45 at night, to return those Redbox movies we forgot to drop off earlier that day, and I’ve succombed to paying the lazy tax of just keeping them another day, way too many times. I don’t have statistics for you on how much this costs people on average, but when you consider not returning movies on time doubles the cost of the movie, it’s something to think twice about. There aren’t many areas in my budget I’d willingly pay double for out of convenience!
FSA Savings You Don’t Use: 20% forfeit $500+
- Flexible Spending Accounts (FSA) are a great way to save some money on your health care expenses, but if you don’t use them each year, it’s going to cost you. The MiamiHerald reported at the end of 2012, “About 20 percent of people who don’t use up all their FSA money forfeit $500 or more, according to the Employers Council on Flexible Compensation. About 40 percent of participants forfeit at least $1.”
Electricity/Gas: $150 per year
- How many hours a week are you away from your home? Are you using a programmable thermostat and timers on your electronics?
“By turning your thermostat back 10° to 15° for 8 hours, you can save 5% to 15% a year on your heating bill — a savings of as much as 1% for each degree if the setback period is eight hours long.” according to Energy.gov.
They also state in an article about energy vampires that “According to the Lawrence Berkeley National Laboratory, between 5 to 10% of residential electricity use goes toward powering appliances in standby power mode.”
If I do the math on both of these statistics with our own family’s expenses, we could be saving about $150 per year. (Taking the average of both Gas and Electric (10%) $75.30 on gas, and (7.5%) $73.50 on electricity, for a total of $148.80.)
It’s not a ton of money, but since it’s savings that requires no effort, there’s no reason not to do it. Plus, it would cover the cost of that Netflix subscription.
Wahoo! I don’t know about you, but I’m feeling pretty excited about the money we’ve just saved!
What other areas can you think of that we’re wasting money on things we don’t use? Share them in the comments below. If you liked this post, please remember to “like it” and share it with others.
Thanks for reading!
P.S. I asked a community of Personal Finance people on G+ if they had any other suggestions to add of things we’re wasting money on that we don’t use.
David Ning from moneyning.com brought up two great points.
- “Everything you aren’t using but taking up space in your house. Sell them!
- Gift cards are also a common waste because people often forget about / lose them.”