How to Stop a Leaky Budget From Sinking Your Finances

Jul 24, 2018 4:15:00 PM

No matter how hard you try to budget, some months it feels as though your money is simply vanishing. If you’re consistently wondering where your money has disappeared to, you might be spending without even knowing it – or what’s more commonly referred to as having a leaky budget. How to avoid a leaky budget? Figure out where the holes are coming from, and take action to patch them up.

To help steer you in the right direction, here are just a few of the most common budget leaks, along with some tips on how to stop a leaky budget from sinking your finances.  

Stop the Subscription Fees

Recurring subscription fees are one of the most common causes of a leaky budget. From entertainment services, to print media subscriptions, to digital license billing, there are a million and one ways to spend money without even thinking about it. Take a good hard look at your monthly bank statement or credit card bills and see if you’ve got any money leaking out for subscriptions you don’t actually use. If you haven’t listened to an audiobook in months, cancel that Audible subscription. If you barely ever shop online, stop paying for Amazon Prime.

Smarten Up Routine Spending

When subscription fees feel excessive but you’re not ready to give up the service, see if you can find a smarter, less expensive alternative to lessen the budget leaks from routine spending. You might share a magazine subscription with a family member, or offer your Netflix password to a friend and split the monthly costs. With some subscription services, it can even pay to call up the company and see what they’re willing to offer. If the choice for them is between losing you as a customer or providing a new package, you just might get lucky with a more affordable option. 

Ban the Bank Fees

From monthly maintenance, to ATM and account use fees, the average person spends $1,000 a decade on bank fees. To stop budget leaks that result from banking, try to maintain a minimum required balance in your account so that you don’t need to pay a monthly maintenance fee. Some savings and checking account providers, such as HUECU, will also waive monthly fees as long as you fulfil other requirements, such as making a certain number of debit card purchases or maintaining additional accounts. Check with your credit union or bank to learn how you might be able to free yourself from regular fees.

Be Cautious About Quick Payments

Fast and convenient, credit and debit cards make it easy to spend without even realizing it – and as mobile payment systems like Apple Pay make it even simpler to ‘tap and go’ at checkout, it’s no wonder so many people are finding it more difficult than ever to track their spending. To prevent absent-minded purchases from leading to major budget leaks, use an app such as Mint to watch your budget and track what you buy. When you’re entering all purchases into this sort of app, you’ll stay much more aware of what’s being spent where, and be less likely to experience budget leaks from a ton of small buys.

Dig Out the Discounts

Lots of subscription services are actually cheaper when you pay up front. Spotify offers a year of Premium services for $99 per year, which would otherwise cost $9.99 per month. Pay up front and you get a $20 discount every year, along with the benefit of knowing that money isn’t vanishing from your account every month. Take a look at your other subscription services and see if any of them offer a similar up-front plan that can save you money and help stop the monthly leaks.

Think About Refinancing

If you’re making regular loan payments, you might be able to lessen the impact of this particular budget leak by refinancing or consolidating your loans. Refinancing can offer a new interest rate on loans, so you’ll be paying less money every month. Even if you’ve refinanced before, you might be able to do it again and save even more money. If you’re not sure whether or not your loans are eligible for refinancing, call HUECU at 617-495-4460 to learn more.

Tags: Budgeting, Debt Management, Personal Finance, Savings, Money Tips, Financial wellness