So what are money leaks? Money leaks are small expenses that add up over time.

This can include anything from buying take-out for lunch every day to paying for subscription services that you no longer use.

What causes money leaks?

Leaking spending results from poor financial planning and impulse purchases that you may not consider expensive at the time, but over time, these purchases add up quickly.

What role does a lack of planning play when it comes to money leaks?

Poor budgeting and financial planning make it easy to fall victim to leaking spending. If you aren’t monitoring your spending and recurring expenses, you’re likely to overlook many areas in which you could be saving money.

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Plan your budget in advance and cut out the unnecessary purchases that don’t fit within your budget. Here is a list of money leaks for you to be aware of:

1. Cable Subscriptions – use streaming services instead, however not too many
2. Take out food, delivery food orders, cook at home instead
3. Prescription drugs, instead of name brands, purchase generic drugs that cost a lot less.
4. Phone Plans, in particular data, plans excess data usage, late payment fees, etc.
5. Bank fees, minimum monthly fees, maintenance fees, ATM fees, overdraft fees, consider opening an account without fees
6. Subscriptions – email fees for businesses, magazines, online books with Amazon, music, etc.
7. Gym Memberships can be excessive unless you use it on a regular basis to improve your health, it’s a good investment, of not to consider home equipment such as a stationary bike, it will help you save money in the long run.
8. Meal Plans can be expensive. You can do better by using coupons at local grocery stores and comparison shopping, preparing meals over the weekend, and carrying in meals to work or school, leftovers are good.
9. Cosmetics/Shave Programs add up over time, the remedy is to find local stores that sell healthy cosmetics that don't harm your skin and shave programs at lower price points.
10. Clothing – Designer clothing is overrated. Comparison shop at a mall or online and you will likely be able to purchase designer clothing at drastically reduced retail prices.
11. Designer coffee at $5 dollars or more a cup, adds up to $150 per month or $1,800 per year. The solution, purchase a jar of coffee at your local grocery store and or online and save a ton.
12. Food waste – People throw away a pound of food per day, this represents a money leak of the highest order. This equates to $1,500 annually.
13. Insurance is another area upon which people can save more money, thereby preventing money leaks. For example, during the pandemic people didn’t drive as much, thus their insurance company could adjust their policy because of fewer miles driven, less risk and you save more money.

Did you identify money leaks you currently have? If so, do something about it to prevent this from happening to you today and in the future. Discover more about Paul's virtual Financial Fitness course at this link, perhaps it can make a difference along your financial journey: https://bit.ly/3dbperG

 

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