We’ve uncovered five common causes of “expense creep,” which can add up to more than $7,000 a year — and identified easy ways to help you reverse the trend.
- The $1,000 cup of coffee
If you’re “treating” yourself to coffee out every day, you might as well be drinking it out of a gold cup. Spending $5 on fancy coffee drinks once a week may not seem like a big deal, but doing it every day, well, that adds up. It’s estimated that the average American worker spends close to $1,110 annually on coffee from coffee shops. Start brewing your joe at home and you could reduce your monthly budget by $90 or more!
- Hidden costs on your cellphone bill
When was the last time you closely reviewed your cellphone bill? Well, now may be the time to take a look. You’ll want to make sure you haven’t been incurring any data overage fees, and that you aren’t being charged for parental controls you no longer need. If you spot any of these, contact your provider and update your account so that you’re only paying for what you actually need. And if data overages are plaguing you, consider an unlimited data plan, or make sure your settings only allow you to stream music, videos, and games when you’re on Wi-Fi.
- Unused monthly services
If you signed up for a gym membership in an effort to reach your New Year’s goals, chances are you opted in to an automatic credit card payment. But if you haven’t stepped foot on a treadmill in months it might be time to cancel that membership. An unused gym membership could be costing you $700 a year or more. Instead, look for a gym that offers a “pay-as-you go” option so that you’re aware of how much you’re spending on classes when you do attend. Also, take a look at any subscriptions you may have and not use, such as magazines TV, video and music streaming services and cancel them.
Tip: Review your monthly credit card or bank statements line by line. It’s an easy way to identify services you may not be using or no longer need. This is also where many “automatic renewal” options will show up, so you can turn them off to avoid unexpected or unwanted charges.
- Carrying a credit card balance
If you’re out of the habit of paying off your credit cards in full each month, you may need to either rethink your spending or cut down on credit card use. Why? Because carrying a balance and paying interest has given Americans the average balance of $6,354. Look for zero percent balance transfer offers to reduce interest spending immediately (assuming you can pay off the balance before that zero percent offer expires). In the meantime, start using cash exclusively so you don’t incur additional debt.
- Throwing away food at home
Cooking at home is a great way to save money. But throwing away food in the process is not. Many Americans with good intentions go grocery shopping, but never use up what’s in the refrigerator, which can add up in wasted food costs. The best way to cut down on this is to shop more often (maybe a few times a week) so you have less food sitting around, and plan out your weekly meals — and make a detailed list — before you hit the store.