Does it always seem that your money never goes as far as it should? One of the main culprits are the slow money leaks that we all have. These are generally recurring monthly expenses for a subscription or service that by itself appears quite small, but when you factor in dozens of these potential leaks it can drain hundreds of dollars from your budget each month. You know what I’m talking about. Cable bills, gym memberships, magazine subscriptions, or even regular dues to an organization. Each one may be just a small monthly payment but they add up faster than you realize.
A lot of people focus on the big things when trying to get spending under control, and that’s not a bad thing. For example, buying a used car instead of new is a single purchase that can immediately save you thousands. You should still be doing these things, but don’t neglect the little things. Plugging even the small money leaks can lead to significant savings.
Examine Your Memberships and Subscriptions
How often are you using that gym membership that you signed up for in January as part of your New Year’s resolution to get into shape? Memberships like these can actually be quite costly and if you aren’t getting the full use out of the service you are probably throwing money away.
Another good example are the video rental services such as Netflix or Blockbuster. How many movies do you actually receive per month versus what plan you are on? Do you really need to have 3 videos out at one time? If you watch even one or two movies per week you can likely get by on a lesser plan and that could save five bucks a month. Also consider suspending the service during the summer months. You’re more likely to be watching less TV, so if you can eliminate a $12/month fee for six months out of the year you’re saving over $70.
Paper Media Subscriptions
Another big drain comes from newspaper and magazine subscriptions. Personally, I love magazines so I subscribe to quite a few. Unfortunately I often find that some magazines will get buried under the mail and go unread for weeks. Clearly if a magazine is finding itself rarely read it can probably be canceled. You can find most magazines at the library or the bulk of the material can be found online. Examine your magazine subscriptions and see which ones you can live without.
Newspapers are an area that really add up since they can be quite expensive. We get a daily subscription but there are many days during the week when I’m busy that I’ll rarely get past the first section. Most of the reading comes during the weekend so changing the subscription from daily delivery to Sunday only alone could save over $10 a month. Make sure that with your newspaper and magazine subscriptions that you are really getting the most out of them, otherwise cancel or cut back on the services.
It is no surprise that television and internet services can be very costly. Some households can spend upwards of a few thousand dollars a year on tv and internet service. Take a good look at what your true needs are and find out what cuts can be made. Do you really need that $10-$15 a month premium movie channel? How about the super deluxe platinum package with 500 channels when you only watch a handful of channels?
Even if you find you do want some premium service you generally don’t have to subscribe to it year round. If you want the sports package to catch your favorite college football team do you really need to pay for that package from February through July? Or maybe you subscribe to HBO because you’re a diehard Entourage fan. Again, these types of series don’t generally run new episodes year round and you could save a lot of money by only signing up when you actually want to catch the shows. Again, take a $15/month premium channel and pay for it for only three months instead of the whole year. You just saved $135.
Finally, even if you feel you can’t make any cuts you can still save money with a quick phone call. As I generally do every six months or so I call my cable provider and inform them that I am shopping around considering switching to the dish or that XYZ provider can give me the same service for a lower price.. I can almost always find someone who will be willing to cut my cable rate or enroll me in a promotion for a few months which can easily add up to a hundred bucks or so in savings.
Add It All Up
Remember, the little things add up. Saving $5 here and there may not seem like much, but consider what some small savings amount to over time. Save $5 by changing your Netflix subscription, cancel that $20 a month gym membership you rarely use, reduce your cable bill by $20 and get rid of a few magazines you don’t have time to read and you may realize a monthly savings of $50 or so dollars.
What does $50 a month actually buy you? That could pay a utility bill, it could be an additional $600 going into your retirement account or work towards building your emergency fund. Another $600 a year applied to the principal of a high-interest credit card can also put a nice dent in that debt you’ve been trying to eliminate. Whatever the case may be for you, use that as motivation to cut back on these financial leaks that can slowly drain your bank account.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.