5 Places Your Money ‘Leaks’ When You Don’t Track Spending
No matter how money-conscious the modern consumer can be, it’s become exceedingly easy to lose track of just how much money is spent across a single day, week or month. That’s because life is full of money “leaks” that can quietly and quickly drain your bank account without you even noticing – especially when you don’t actively track your spending.
When you don’t track that spending, your bank account can quickly spring a number of leaks. Here are a few such leaks and just how much they can cost you.
Read Next: 7 Moves To Help You Save $20K as Quickly as Possible
Explore More: Start Growing Your Net Worth With Smarter Tracking
1. Food Delivery Services
“Food delivery services make dinner easy,” Melanie Musson, insurance and finance expert with Clearsurance, told MoneyLion. “One meal doesn’t feel like a budget-breaker, but when you order food here and there throughout the month, the expense adds up.”
Sometimes the convenience of food delivery services like DoorDash or Uber Eats can become almost addictive, and even a single order can cost between $40 and $50. Extrapolate that cost across the number of orders you make per month, and you could be spending hundreds on a handful of dinners.
2. Convenience Taxes and Fees
Speaking of food delivery services, consider just how much is charged via convenience taxes.
“For my clients, [the convenience tax] is by far the biggest source of leaks in their budget," said Cody Schuiteboer, president and CEO of Best Interest Financial.
Joe Braier, president and CEO of Lake Country Advisors, agreed.
“The daily or weekly convenience charges for such things as delivering products, using ATMs, and/or the occasional rush processing fee charged on top of your transaction can collectively bleed your accounts dry," he said.
He went on to note that they’re easy to miss, simply because they are so inexpensive on a moment-to-moment level. However, he warned that “the overall impact of multiple small fees can result in substantial losses in your pocketbook over time.”
3. Overlooked Subscription Services
“You sign up for something free, and then forget to cancel. Before you know it, you are still being billed for a service that you have not used in months,” Braier explained, regarding subscription services for everything from streaming platforms to news websites to car services.
He also noted that because these services are so easy to sign up for, they are just as easily forgotten about – until the bills start draining your account.
Schuiteboer concurred, and added that it’s not just big services like Netflix or Google that can create a money leak in your account.
“There are the services that people forget that they signed up for in a free trial,” he said.
Beware the cloud storage fees, weight-loss apps and meal kits you sign up for as a trial run and then let nickel-and-dime you over time.
4. Free Shipping Accounts
“If you have an Amazon account, a Walmart+ account, or something similar that lets you order with fast, free shipping, you’re probably losing more money than you realize every month,” Musson said. “It’s so easy to make a purchase, and when it’s not expensive, it feels like it doesn’t even make a difference. But these small expenditures add up.”
For example, an Amazon Prime membership for unlimited free shipping costs $139 per year. You should ask yourself whether you order so much from Amazon yearly that $139 would be less than the shipping fees you’d otherwise pay.
5. 'Soft Leaks'
Clay Cary, a senior trends analyst at CouponFollow, issued a warning against what he called “soft leaks,” which are small sums of money that become lost when spenders are rounding up totals.
“This includes leaving tips of one or two dollars, purchasing some treats while shopping, and rewarding yourself after putting in much effort,” he said. “Such actions require little thought and become automated, but they still lead to financial drift.”
That’s not to say that you should abscond from leaving tips or stop rewarding yourself with a small treat after a hard week; instead, you should simply not do so thoughtlessly. Remember to track such expenditures (however small) in your budget so that what was once a leak is now a spending category that’s fully accounted for.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
