Help With My Budget - Little Things Add Up

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If you have big financial goals in mind — buying a house, paying cash for a car, retiring early — you need to mind your budget. But that budget should be a helpful roadmap, not a straitjacket. And like a road trip, small things can make a huge difference in how long it takes and how much you enjoy the ride. 

Paying attention to details can pay off big when you identify and eliminate small, repetitive charges from your monthly spending. To gauge the impact of these budget busters, start with a list of all the things you’re paying for. If you use a debit or credit card to pay your bills, this should be easy. Get your last few statements and print them, then sit down with a highlighter and start snipping — and saving.

Amazon. Think about this: If you’re an Amazon Prime member for the next 10 years, you could buy Jeff Bezos up to nearly 1,600 gallons of fuel for his rocket at about a buck a gallon. While the $12.99 per month cost may not seem like much, over time this type of expense can push your budget into the stratosphere. But that’s just the beginning. Maybe you have an Alexa? How much is that costing you? Sure, the basic Alexa services are free, but its seductively simple ordering capabilities can quickly put a dent in your wallet. Instead of barking out, “Alexa, buy me a case of that mango-scented soap I like,” you might decrease or eliminate that purchase if you had to sit down and think about it.

Netflix, Hulu, Disney+, etc. How many streaming services do you have? How many do you actually use often enough to make it worthwhile? If staying at home streaming “Frozen” keeps you from driving halfway across town for a frozen yogurt multiple times a month, it might be worth it. Otherwise, “let it go.” 

Cable packages. If you have a cable or satellite service and you also pay for online streaming services, ask yourself how much TV you’re actually watching. In addition to the financial cost, there’s also the health costs of couch surfing for days on end. Write down all the channels you watch monthly, weekly and daily and start cutting out all the pieces that you’re using infrequently — or not at all. If you really miss a channel after you cancel, you can always resubscribe. 

App subscriptions. Remember when you thought it would be cool to sign up for a language app so you could talk to your fourth cousins in Lithuania? Then you forgot all about it. We can guarantee it didn’t forget about you, and is still charging you $19.99 a month. Check your credit or debit card statements and start canceling. And if you’re paying subscription fees for office suite software, keep in mind there are free (yes, free) alternatives like GoogleDocs, Libre Office, WPS Office and Free Office. The same is true of other popular software packages.
Small expenditures, over time, can add up to big bills. When it comes to your retirement, the effect can be the equivalent of death by a thousand paper cuts. If you’re not careful, you could easily blow a hole in your budget and imperil your financial future. In this second installment, we look at more little things that can derail your budget and retirement goals over time — and how to get back on track.

Bank/ATM fees. The next time you review your credit card and checking account statements, take a hard look at your bank fees — including ATM charges. If you’re overdrafting your account, you and millions of others are paying for it to the tune of $8.82 billion annually. Then there are account maintenance fees, wire transfer fees and the king of them all, ATM fees. If you use an ATM that belongs to your bank, or to the network your bank belongs to, you may not be charged at all. But go outside that network and you’ll probably get pinged per transaction. Some solutions: Use less cash, keep enough in your account to avoid overdraft and account maintenance fees and avoid taking out small sums frequently. And comparison shop for a bank with lower fees or lower minimum balance requirements. 

Credit card interest payments. If you haven’t shopped your rate in a while, you could be paying upwards of 14% to 18% interest on your balance. And that’ll add up fast. There are times when you might need to use a credit card for large purchases — your dryer or the car breaks down. But resist the temptation to let those balances hang around for too long. And find a better deal if you can’t negotiate down your rate with your current lender. There are scores of different offers out there, from zero interest for a year or more to generous cash back rewards. 

Un- or underused gym memberships. Unless you’re actually going to use that gym membership, cancel it. According to a USA Today study, 67% of those who have a membership don’t use it, so cancel before you rack up even more charges. If your gym has a contract, find out how many months are left and how much they’re going to charge to let you out of the contract, then turn off any auto-renew feature. 

Other subscriptions. The same advice applies to other memberships and subscriptions: discount warehouses, the jelly of the month club and those meal in a box delivery services. If you haven’t used it in the last 30 to 60 days, cut it loose. If you’re going to miss it, you’ll know soon enough. And you may find the service sending you emails begging you to come back — and maybe even offering you a big discount to incentivize you.

Unconscious or impulse spending. The drive-through double mocha latte, fast-food lunches, the magazine at the checkout counter (or, worse, the candy bar), the sale item you don’t really need — these are the kinds of purchases we all make without thinking much about them. It’s time to start thinking. Do you really need premium takeout coffee every day? Is there an alternative, such as brewing at home and using a thermos? 

Small tweaks in your spending can make a big difference. Your WellCents financial professional can help you set up a budget to help meet your financial goals. Give them a call and learn how you can put those hard-earned dollars you save to work for you. 


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