Originally published: 27 APR 22 10:02 ET
(CNN) – With inflation pushing the price almost ever higher, it’s more important than ever to keep track of how you spend your money.
Over time, however, even the most budget-conscious consumers may find that they spend more than they need on certain expenses.
(KSL NewsRadios Dave and Dujanovic recently covered this topic in the podcast below!)
Here’s a look at seven common money traps – and tips on how to reduce those costs.
Whether you pay fees to withdraw money from an ATM outside the network or pay monthly service fees just to have a checking account, small fees can add a significant amount of money wasted 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 the fee for interest-bearing checking accounts was more than $ 16 for those who did not meet the requirements to waive the fee.
Waste cut: Change bank. Almost half of checking accounts have no monthly maintenance fees at all, according to Bankrate. The cost of monthly fees, if you can not avoid them with your current bank, probably outweighs any interest you get paid on that account.
2. Sale items you do not need
You can not deny the excitement you get when you buy an item at a lower price than its normal price. But spending money on something you do not need just because it is on sale can quickly lead to over-spending.
Waste cut: Next time you are tempted to buy something on sale, wait 24 hours before making the purchase. Often, the initial tension over getting a deal disappears, and you will be able to walk away from the transaction.
3. Subscriptions you do not use
A Chase study last year found that more than 70% of consumers wasted more than $ 50 a month on recurring payments for things they did not need or wanted. A culprit for this, said Julie Ramhold, a consumer analyst with DealNews, is that people often sign up for free trial periods and then fail to cancel when the trial period expires.
“These things are put on autopay, and then people do not even realize they are paying for something they do not even use,” Ramhold adds. “It’s an easy way to throw money out the window.”
Waste cut: Even if you have your credit cards set for automatic payment (which is a smart way to avoid late payment charges), carefully review your bank statement each month and cancel any charges for goods or services you do not use.
4. Food waste
Up to 40% of food in the United States is never eaten, according to the Natural Resources Defense Council. Although the amount of food your family throws out may be lower, we all owe it to ourselves to throw away wilted salad vegetables or leftover food taken home after a dinner out.
Reduce cost: Look through your refrigerator before you go out to the supermarket. Then plan your meals (and your shopping list) around the items you already have. This way, you will not only be sure to use these items before they go bad, but also less likely to buy new foods that are wasted.
5. Extended warranties
While extended warranties on your car, appliances or other electronic devices can offset the cost of future repairs, they are not always a big deal for consumers, according to Ramhold. Sometimes the cost of the plan will exceed the cost of any repairs, or it will not cover the problem you have, Ramhold said. In addition, many credit cards include extended warranty coverage for certain purchases, so you may pay for coverage you already have.
Waste cut: Instead of paying for an extended warranty, consider directing your extra money to an emergency account that you can use to cover the cost of repairs, should they occur. If you already have a fully funded emergency account, you may be able to skip this expense altogether.
6. Overpayment for insurance
Like most other services, the cost of home and car insurance usually increases over time, but if you have been with the same provider for several years, you may want to look around to see if you can find a better price.
“New customers get new customer offers,” says consumer-savvy expert Andrea Woroch. “You may be able to find a policy that offers the same or better coverage for less.”
Waste cut: Check websites like Zebra.com or Policy Genius to get insurance quotes. If you are happy with your current coverage and provider, you may be able to use these quotes as ammunition in negotiations for a better price.
Other ways to lower your bill: Combine home and car insurance with the same provider or increase your deductible. By doing these two things, Woroch said she was recently able to reduce her insurance bill by $ 1,100 a year.
7. Credit card interest
High-interest debt and credit card fees cost US households an average of $ 1,000 a year, according to the Consumer Financial Protection Bureau. Although credit cards can be a useful tool, they become an expensive burden that can drag down your finances when you have a balance.
Waste cut: If you have debts, focus on paying down your existing balance and put your cards on ice for now.
“If you have problems with credit card debt, it’s probably a good time to put the card away and use the cash method instead, or use a bank card,” advised Ramhold.
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