6 Surprising Budget Leaks That Got Me Into Big Credit Card Trouble
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When we accumulated our five-digit credit card debt, it wasn’t fancy vacations or high-end furniture that brought us to the financial breaking point. Instead, it was little budget leaks that likely would have continued to go unnoticed had we not went back an analyzed our 2012 spending.
What we thought we were spending “a little” on, added up to a whole big bunch of cash, or in our case, credit card debt. It was the old analogy of the frog being put into a cold water-filled pot and being lured, unsuspectingly, to the point of boiling, not knowing that he was swimming his way into big trouble.
When I look back on how we got to our financial boiling point, I realize it was little budget leaks that led us into big credit card trouble. If you are anything like us, you might find some of these budget leaks drowning your financial future.
Budget Leaks Galore: Monthly Subscriptions
Any number of monthly “necessities” can produce big time budget leaks if you don’t keep your eye on them. Our most recent budget leak discovery was the monthly cloud program subscription we buy for our oldest daughter, an aspiring artist.
After closer inspection, I realized that the monthly fee for the cloud program went up a whopping 50 percent at the end of last year. When I called the cloud program’s customer service center to find out the reason why our fees went up, I was told that the rate we used to have was an introductory rate.
Oh, the dreaded introductory rate: How many times has that brought somebody down? After further pushing the customer service rep, I learned that there was a less expensive program (as in 65 percent less) that provided all that my daughter needs. Of course this program wasn’t advertised to us when we started our subscription, and I wouldn’t have been told about it unless I’d specifically asked.
Lesson learned: check all of those monthly subscription fees, such as cell phone plans, pay TV, etc., and look for ways to lower the cost and put more money in your pocket each month.
Until we read a post on insurance rate shopping, we simply took the rate we were offered as the “best available.” After further inspection and some shopping around, however, we found rates at State Farm that beat our former car insurance rate by 30 percent, equaling hundreds of dollars in savings for our family each year.
Lesson learned: Beware of loyalty to insurance agents/companies. Do your due diligence and shop for insurance quotes once a year or so, checking to see if there’s a better rate available with an equally reliable company.
The Grocery Budget
Unless you’re diligently menu planning and tracking what you spend on groceries each month, you’re likely wasting at least a couple hundred bucks each month at the local grocer. Make a menu plan ( to avoid spontaneous purchases and food waste), memorize prices for things you normally buy (to know when a sale is truly a sale), and forego those frequent “just because” trips to the grocery store.
Lesson learned: Make small changes, such as bringing a bag lunch to work instead of hitting the local fast food place. In doing so, you can shave big bucks off your annual grocery bill.
The Entertainment Budget
It’s not unreasonable for a couple to spend $50 or more at a dinner out to the local sit down restaurant. Before we implemented a strict entertainment budget, we were spending hundreds of dollars a month on entertainment and eating out.
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Lesson learned: Now we save money on entertainment by planing one or two not-so-expensive outings each month. The result is that we’ve got more money in our pockets, and a better appreciation of those nights out on the town.
Leaving those lights on when you’re not in the room, having the TV on when you’re not really watching it, and over consumption of water can add big bucks to your energy bills.
Lesson learned: Choose to be more conscious of the energy you’re using and watch your water and energy bills go down, down, down.
It’s easy to fall into the belief that all transportation costs are necessities, but upon further investigation, you might find a number of ways you can cut down on transportation costs. Drive less, carpool or take public transportation to work. Learn to change your own oil.
Lesson learned: Wash your car at home (weather permitting) instead of hitting the car wash, and drive slower, increasing your fuel efficiency.
If you’re willing to scrutinize your monthly budget, searching for hidden budget leaks, chances are you’ll find a whole lot of extra money going out the door that doesn’t need to be spent.
What has been your most surprising budget leak? How do you get back on track when you discover that you’re overspending? Do you view your budget as a static or living document?
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