With inflation pushing the prices of almost everything to record levels, it's more important to keep track of how you're spending your money than ever before.
However, over time, consumers find themselves spending more than they should.
Here's a glimpse at seven things consumers spend their money on — and tips on how to cut those costs.
- Bank fees
Whether you pay a fee to withdraw money from an out-of-network ATM or pay a monthly service fee just to have a checking account, a small fee can add up to a significant amount of wasted money over time. The average monthly fee for interest-free checking accounts (excluding free checking accounts) last year was just over $5, according to a Bankrate survey , while interest-bearing checking accounts were more than $16 for those who didn't. They meet the fee waiver requirements.
How to Spend Money: Changing Banks. Nearly half of checking accounts have no monthly maintenance fees at all, according to Bankrate . The cost of the monthly fee, if you can't avoid it with your current bank, will likely outweigh any interest you get. on this account.
2. Buying things you don't need
There is no denying how exciting it is to buy something for less than its typical price. But spending money on something you don't need just because it's on sale for less than its normal price can quickly lead to overspending.
How to cut back on spending money: Next time you're tempted to buy something on sale, wait 24 hours before you buy it. Your enthusiasm for buying it often fades away.
3. Subscriptions you don't use
A Chase study last year found that more than 70 percent of consumers waste more than $50 a month on recurring payments for things they don't need or want. Julie Ramhold, consumer analyst at DealNews said. ::
“People may fall into this trap when they try out free trial subscriptions and then fail to cancel when the trial period is over.”
"These things are put on automatic payment, so people don't even realize they're paying for something they don't use," adds Ramhold. "This is an easy way to get money out the window."
How to cut back on spending money: Even if your credit cards are set for automatic payment (which is a smart way to avoid late payment fees), look carefully at your statement each month and drop any fees for services you don't use.
4. Food waste
The Natural Resources Defense Council notes that 40 percent of food is never eaten in the United States. And while the amount of food your family throws away may be less, "we are all guilty of having to throw away wilted salad greens or leftovers brought home after dinner out."
Cut the cost: Check your refrigerator before going out to the supermarket. Then plan your meals (and your shopping list) by preparing them with the products you have on hand. This way, you will not only make sure you use these items before they expire, but you also avoid buying new groceries and wasting your money.
5. Extended Warranty
While an extended warranty on your car or other standard or electronic equipment may offset the cost of future repairs, it's not always great for consumers, according to Ramhold.
Sometimes the cost of insurance will exceed the cost of any potential repairs, or it doesn't cover the problem or damage you experienced, Ramhold said. In addition, many credit cards include extended warranty coverage on some purchases, so you may be paying for coverage you already have.
Reduce the cost: Instead of paying for an extended warranty, consider directing your extra money toward a contingency account that you can use to cover the cost of repairs should they arise. If you already have a fully funded emergency account, you may be able to skip these expenses entirely.
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| A shopper reviews his purchase invoice. (Reuters) |
6. Pay additional amounts for insurance
The cost of home and auto insurance usually goes up over time, like most other services, but if you've been under contract with the same company for several years, you may want to look to another company to see if you can find a better rate.
“New customers get new customer deals,” said consumer savings expert Andrea Woroch. "And you may be able to find a policy that offers the same or better coverage at a lower price."
Reduce the cost: Check online sites such as TheZebra.com or Policygenius for insurance quotes. If you are satisfied with your current policy or the company you are contracting with, you may be able to use the rates Other companies as ammunition in negotiations for a better price.
7. Credit Card Benefits
High-interest debt and credit card fees cost American families an average of $1,000 a year, according to the Consumer Financial Protection Bureau. Although credit cards can be a useful tool, they can become a costly burden that can lead to a drop in your money when you carry a large balance .
Reduce the cost: If you're in debt, focus on paying off your existing balance and freezing your card.
"If you're having trouble with credit card debt, it's probably a good time to ditch the card and use the cash method instead, or use a debit card," advises Ramhold.
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