By Joel Lee
What is a beach if not a massive collection of tiny grains of sand? Each individual grain is insignificant, but when you put them all together in one place, it’s a lot easier to see the big picture.
The same holds true for money.
We all deal with a lot of fees and costs over the course of our lives. These may seem fine in the moment because they’re relatively small. But if you add them all together, you’d be surprised by how much money you’re actually throwing away.
In this post, we’ll explore 15 lesser-known money leaks that you should plug. Some tips involve cutting expenses out of your life, and other tips involve grabbing money on the table that you didn’t realize was there. I guarantee you’ll find at least one useful tip below!
1. Interest Rates
The average interest rate for a credit card is 18–24%. Let’s say you have $10,000 in credit card debt and you only make minimum payments. At 18%, you’ll pay $2,840 ($1,704 of that in interest) in the first year, but at 24% you’ll pay $3,408 ($2,272 of that in interest).
A huge difference — and that’s just in the first year!
My point is, every percentage point matters when it comes to interest. And you can probably get your interest rate reduced just by asking your credit card provider. It won’t always work, but it works more often than not. One phone call could save you thousands.
2. Late Payment Fees
If you have a history of good standing with your provider, you may be able to ask them to waive such fees. This won’t work if you’ve constantly missed payments, and it has the greatest chance of working the first time you miss one.
3. Annual Credit Card Fees
A $99 annual fee is money that’s thrown away for no good reason. Even a $5 monthly fee adds up to $60 lost every year, again for no good reason. You can always shop around for an equal or better card without such a fee (even if your credit score is abysmal).
4. Savings Accounts
Interest rates for savings accounts have been terrible over the past decade. My local bank offers no better than 0.01%. That means stashing away $10,000 will earn me $1 after one whole year. At that point, having an interest rate is almost insulting.
5. Investment Expense Ratios
When you invest in a mutual fund, such as a target date retirement fund, you have something called an expense ratio. This is a fee you pay to the fund manager to cover operating costs. And as you might expect, different funds have different expense ratios.
The average expense ratio is around 1%, but you can find much better deals if you know where to look. Vanguard’s Target Date Fund, for example, only has an expense ratio of 0.18%, making it one of the best values around.
6. No-Contract Mobile Plans
I’m on such a plan and only paying $25 per month for two phones. You’ll have to adjust your habits, such as using Wi-Fi instead of data whenever you can, but it’s not as painful a transition as you’d think. Saving over $100 per month certainly makes up for it.
7. Impulse Shopping
This is also a great way to stop buying gadgets that you’ll regret later. Buyer’s remorse is real, and impulse shopping plays a big role in it. Don’t want to give up shopping altogether? Check out these tips for enjoying tech without spending so much money.
8. Shipping Fees
This is why Amazon Prime is such an amazing deal. Not only do you get free two-day shipping, which alone can make up for the subscription cost, but you also get all kinds of other benefits like Prime Pantry, Prime Video, Prime Music, Prime Reading, and more.
If you don’t want to use Amazon or Prime, here are several other nifty ways to score free shipping online.
9. Amazon Coupons
Did you know that Amazon has an entire section dedicated to coupons? As I write, I see coupons that let me save 40% off candy, 50% off baby wipes, $5 off whitening strips, $3 off dog treats, and that’s just on the front page.
10. Insurance and Warranties
Before shelling out cash for insurance on an electronic device or buying an extended warranty policy, you should know that a lot of credit cards offer something similar at no extra charge. This is one of the main reasons why you should always purchase electronics on a credit card.
11. Digital Luxuries
Splurging is fine from time to time, but you have to make sure the thing you’re splurging on is worth it. The problem is that they usually aren’t. If something is valuable to you then by all means buy it, but if you know you can go without it, then consider that.
12. Digital Subscriptions
How many digital subscriptions do you have that you’ve forgotten about? I’m talking about newspapers, magazines, Netflix, Hulu, YouTube Red, Blue Apron, all kinds of subscription crates, and even things like Patreon. Go back and get rid of the ones you never use — this is one of the easiest ways to slash your monthly expenses.
Be especially wary of free trial offers! If you forget to cancel in time and you don’t keep a close eye on your credit card statement, you could be losing money for no reason at all.
13. Family Plans
Spotify, Google Play Music, Apple Music, Amazon Prime, Office 365, CrashPlan — what do all of these have in common? They’re all subscription-based, but they also provide family plan options.
If you use any of them, you can cut down your monthly costs anywhere from 20–80 percent by taking advantage of this. You get to keep your own account separate. No downsides at all. There isn’t much more to say than that.
14. Gas Money
Tired of spending hundreds on gas every month? You’ve heard all of the obvious solutions: carpool, stop going out so often, switch to a car with better gas efficiency, find another job with a shorter commute, even consider walking or biking to work.
15. Flight Tickets
Want to get airline tickets as cheaply as you can? There are several tricks and techniques you can use to save hundreds of dollars every time. And one of the easiest tricks? Shop in private browsing mode (AKA “incognito mode”).
All of These Leaks Can Really Add Up
If you implement even half of the tips in this post, you’ll end up saving a lot of money every month. $10 here and $10 there may not seem like much, but $10 from eight different sources monthly turns out to be almost $1,000 every year.
What would you do with $1,000?
What kinds of tips and tricks have you used to cut down on your expenditures? What other “hidden money leaks” are out there for people like you and me? Share with us below!
Image Credit: Jag_cz/Shutterstock