7 Ways You Are Spending Money Without Realizing It
If your checking account has ever rudely surprised you with a number that seems lower than it should, you’re not alone. Lots of people chip away at their funds without realizing it, even if they think they have a handle on their spending. “Many young adults didn’t get a basic financial education growing up at home, so you might be learning as you go,” Farnoosh Torabi, personal finance correspondent for NerdWallet.com, tells SELF. The good news is that even if you’re draining your bank account in one of the following seven ways, you can stop the extra spending in its tracks.
1. Free trials you forget to cancel.
Maybe you decided to try out a new streaming service or were wooed by a subscription-based shopping website. “When you sign up for these freebies, read the fine print,” says Torabi. “If they automatically charge your credit card after a certain date, make sure you have the ability to unsubscribe!” Go the extra step beyond mentally jotting down when you need to nix the membership. “Set a calendar reminder for the first day you can cancel so you don’t forget you have this recurring charge,” says Karen Carr, a certified financial planner with Society of Grownups, a Boston-based financial learning initiative.
2. Sneaky bank fees.
Overdrafts and ATM charges aren’t just inconvenient, they can be a sign that it’s time to switch banks. “If you consistently have these issues, you should get a bank account that will give you the protection you need,” says Carr. Some banks will automatically pull from your savings if necessary or decline any charges that will land you in overdrawn territory. Others reimburse all ATM fees. Do some research to find a bank that safeguards your money instead of sapping it.
3. Late charges on credit cards and utilities.
Forgetting to pay your AmEx or gas bill on time can hit your bank account where it hurts. “If you can’t remember to pay, you should automate those payments. That’s the only way you can skirt those late fees,” says Torabi. And if you keep paying behind schedule because you never have quite enough money to cover those expenses, consider it a hint that you need to re-evaluate your budget.
4. Racking up interest.
Credit cards often have grace periods, which is the time between the end of the billing cycle and when the payment is due. “If you pay your credit card balance in full, most cards won’t charge interest for purchases made during the grace period,” says Carr. But when you don’t pay off your bill each month, anything you buy during that period still carries interest. Interest also accrues crazy-fast on student loans, which you can mitigate by paying more than the monthly minimum. “If you have even a little extra wiggle room in your budget to apply to loans, that can help in the long run,” says Carr. The Society of Grownups has a loan repayment calculator you can play around with to see how much you might be able to save.
5. Buying food when you’re tipsy.
If you reach a certain point of inebriation, spending money on drunk eats is practically a given. It feels glorious in the moment, but it’s also easy to forget about, which isn’t great for your finances. “Drinking impairs judgment, period. It makes you feel hungrier than you are, so you find yourself buying things you don’t need,” says Torabi. She recommends either limiting the alcohol or inviting friends over for a BYOBAHS (bring your own booze and homemade snacks) night so you’re already covered when your stomach starts rumbling.
6. Prioritizing convenience over saving.
With services like Uber and Seamless, it’s easy to throw cash at problems instead of putting forth a little more effort to avoid spending. Even though you know you’re making the purchases, you can ignore how much they’re really costing you. “These can add up and get out of hand pretty quickly,” says Carr. “When the upfront charge is so low, it’s easy to write it off without looking at how it accumulates.” That’s not to say you have to completely abstain! Instead, keep a close eye on your bank statements. Not only will you be more mindful of how much you’re spending, you’ll also see if any fraudulent charges slip through—another way you might unwittingly be giving money away.
7. Not negotiating your monthly bills.
Whether it’s your cable or cell phone bill, picking up the phone can potentially reward you with a discount. For example, lots of cable companies have a one-year introductory rate, after which the price you pay skyrockets. “You can call the 1-800 number and talk it through to negotiate a lower rate,” says Carr. Sometimes mentioning that you’ll go to another company will do the trick, as will asking to talk to someone higher up the ladder. “The first person you speak to may not have the authority to give you a break on your bill, but moving up the ranks can get you to someone with more leverage,” says Carr. If it all works out, you’ll be blessed with a little more money in the bank.