As you probably know, we try to get our own plumbing done around here. Just the other day, our shower drain was stopping up. We pulled out our drain snake attachment (it attaches to a standard drill, very handy) and roto-rootered the heck out of that thing. About three and a half hairballs later, it was once more draining like it should. Ahhhh…that’s better. Showering while standing in 3 inches of grey water ain’t nobody’s idea of a picnic.
And while this post isn’t actually about plumbing, it IS about fixing leaks…in your finances. It’s easy to identify the big items that put a major drain on our bank account…homes, cars, dining out…but it’s the small and quiet leaks in our spending that, when combined, add up. Whether it’s fees we could be avoiding, unused subscriptions or little pockets of extra money we’re not tapping into, they are all small-scale wastes. What are these slow leaks, you ask? Here’s just a few…
1. Unused Memberships / Subscriptions
Look through your last few months of bank statements. Are you subscribing to anything that you no longer use? Be honest with yourself, and cancel them, people! If you get sincere joy from them, then by all means, carry on. But just be honest. (Do you actually read those issues of Popular Science, or have they stacked up over time to the point that they have become an extension of your coffee table?)
- Gym memberships
- Netflix, Xbox Live or other streaming media membership
- Magazine / Newspaper Subscriptions
- Weight-loss memberships (Weight Watchers, Jenny Craig, etc)
- Food-delivery subscriptions (Nutrisystem, food co-ops, etc)
- Birchbox, Glossybox, other monthly subscription services…
2. Floating Debt
Are you continuing to pay the minimum payment on a credit card every month, while letting a chunk of money sit in your savings account? You figure that you need an emergency fund, right? Sure. But if you have anything more than $5,000 sitting in a low-interest savings account, while you sit on credit card debt, you need to wake up. The money you have sitting in a low-interest savings account is likely earning less than 1%, while your debt is probably costing you anywhere from 10-30% in interest on your balance every month. Quit floating your high-interest credit card debt; take your extra savings that’s making you next to nothing, and put it towards your debt. Ta-freakin-da.
3. Not Taking Advantage of the Company Match for your Retirement Plan
If you have an employer-sponsored retirement plan at work, but are not putting in enough to get the full match, you are THROWING MONEY AWAY. Many companies, if not most, offer a partial match for contributions you make to your retirement plan at work. At my company, for example, they match 50 cents for every dollar, up to 6%. So over the course of a year, if I made $100,000, and contributed at least 6%, which is $6,000, the company will contribute an additional $3,000 into my account. If I’m contributing anything less than 6% of my salary to my retirement plan, then I’m giving up free money. Plain and simple.
4. Overpaying on Insurance
If you have an excellent driving record, and you own your vehicle free and clear, consider increasing your insurance deductible to $1,000 and dropping collision and comprehensive coverage. Your monthly premiums should drop substantially. Also, check with your insurance company if they offer discounts for bundling; often if you combine your auto and homeowners insurance with one company, you can save.
5. Wasted Utilities
Leaving the A/C or heat running while no one is home is a complete waste…of energy and money. We have a “smart” thermostat, The Nest, which detects if we’re home, and has decreased our monthly utilities by 40%. Even if you don’t have a “smart” thermostat, chances are you have at least a programmable thermostat, so take a few minutes to program it! Aye, aye, aye.
At our house, we try to do an annual “leak check” every year about this time. I thought for sure I wouldn’t find anything, but low and behold, I checked our transactions from the past month, and ACK!…I found a couple of things.
- Last year we subscribed to an online tutoring service, IXL.com, for $10/month. This was at a time when my daughter was having trouble focusing on math, so I found a tutoring site that was fun and interactive for her, and it truly did help. (Yes, even a mother like me who has taken 4th-year calculus on differential equations and number theory is no help to a child who is determined to listen to anyone but me. Sigh.) But once she improved her math grade, I forgot about it, and continued to pay the $10 monthly fee for several months after. Ugh.
- Two years ago we bought an Apple iPad, and subscribed to the data plan through AT&T for $15/month. I had cancelled the data plan a long time ago, but then reinstated it a few months ago while we were traveling. But we’ve been back for 2 months, and yup…still paying $15/month.
- We were subscribing to a video game rental service, GameFly.com, for my son. It was $17/month. Eventually we reached a point where there were no games that he wanted to play (or could play due to mature ratings), so he slowly worked through the games in his queue, until there were NO games in his queue. We continued paying $17/month for months until I did this check. Yikes.
Just canceling those three above saves us $42 a month…over $500 a year.
So…I’m as guilty as the next guy (or girl). Even when I think I’ve tightened things up everywhere I can, there are still places where I find a slow leak here and there. So take a hard look at your own expenses…do YOU have a leak?