7 expenses that are wasting your money
Buying something just because it's on sale or for an extended warranty can drain your wallet quickly.
As inflation pulls the price of everything up, it's important to keep a close eye on your spending. However, over time, even the most pocket-conscious people can find themselves spending more than they need.
Here are the 7 most common money traps, according to personal finance experts, and how to cut these expenses.
1. Bank fees
Things like ATM withdrawal fees or monthly service fees can add up to a lot of money in a year. In the US, according to a survey by Bankrate, the monthly fee for an interest-free checking account last year was more than $5. Meanwhile, fees with an interest-paying checking account can go up to more than $16.
Workaround: Switch to another bank. Bankrate says that nearly half of all checking accounts in the US have no monthly maintenance fees. In many cases, this fee can be more than the interest you receive.
2. Unnecessary discounts
We can't deny the joy of buying stuff for less than usual. However, buying unnecessary items just because they are on sale is another matter. This habit will eat away at your wallet very quickly.
Solution: Every time you want to buy something on sale, think for a day. Often the initial excitement to buy will gradually disappear. This is a very effective way to save money.
3. Subscribe to unused services
A Chase survey last year found that more than 70% of consumers waste more than $50 a month on services they don't want or need. On DealNews, consumer analyst Julie Ramhold said people often sign up for a free trial, then forget to cancel the subscription when the trial expires.
"These are often deducted automatically. And people often don't realize they're paying for things they don't even use," Ramhold said. "This is the fastest way to throw money out the window."
Workaround: Setting up automatic payments will keep you from being charged interest on late payments with your credit card. However, do not forget to check your monthly statement to cancel unnecessary expenses.
According to statistics from the Natural Resources Defense Council, about 40% of food in the US is not eaten. Although the amount of leftover food in your family may be lower, when we go out to eat, it is easy to waste food.
Solution: Take a close look at the refrigerator before you go shopping. Then, plan meals based on the items you have on hand. This will not only help you make sure your items don't go bad, but also limit the waste of new purchases.
5. Extended warranty
While extending warranties on cars, home appliances and other electronics can offset future repair costs, it's not always a good option for consumers, Ramhold said. . Sometimes, the warranty exceeds the repair cost, or the warranty package does not cover the problem you have.
Workaround: Instead of buying an extended warranty, consider saving money in case of an emergency repair.
6. Spending money on insurance
As with many other services, home and car insurance premiums often increase over time. If you've been buying insurance from the same place for the past few years, try to see if another company offers a more affordable plan.
"New customers often have incentives," says consumer savings expert Andrea Woroch, "You can find a contract with similar protections for less."
Solution: Search the web or ask someone knowledgeable about the problem. Another way is to buy home and car insurance from the same company to get a discount. Woroch says she recently saved up to $1,100 on insurance a year by applying these methods.
7. Credit card interest
High-interest loans and credit card interest cost the average American household $1,000 a year, according to the US Consumer Financial Protection Bureau. While credit cards are useful tools, they can be an expensive burden, dragging down your finances if you're in debt.
The fix: If you have debt, focus on paying it off as quickly as possible. "If you're having trouble with credit card debt, it's time to throw it away and use cash, or an ATM card," Ramhold says.
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