Money 101: Identifying The Money Drains In Your Life
I’m amazed at how every time I walk out of my apartment, cash just seems to seep out of my wallet. So, this year, in a conscious effort to make my paycheck stretch a bit longer, I’ve been keeping a watchful eye on my miscellaneous expenses. Here are some common dollar drains I’ve found and tips to put a stop to them before more money flushes down the proverbial drain.ATM fees. It’s a common weekend scenario — the dinner check arrives, you pull out your credit card and the waiter announces, “Sorry, we only accept cash.” A quick glance in your wallet reveals a black hole. Your nearest bank is a mile away and the closest ATM has a $3 surcharge.
Tip: Think ahead. Of course, you have to allow for some spontaneity in your life, but if you know you’re having dinner later with friends or getting a manicure after work, stop by YOUR bank’s ATM first.
Bad mood/cheer-me-up purchases. “I haven’t heard from him in three days, I need that new dress to make me feel better.” “Work sucked today, but a few — $15! — martinis will make it all disappear!” These are common excuses for the most harmful affliction — random spending bursts.
Tip: Work your bad mood off at the gym, not at Bloomingdale’s or that overpriced rooftop bar. A toned body and stress-free mind will look even better on you than a new dress.
Cabs. In you live in a metropolitan area, cabs are certainly convenient. You step onto the asphalt, throw your arm in the air, and a yellow flurry is soon whizzing your way. Between the initial surcharge, city traffic and the tip, an average 10-minute ride can cost you $8.
Tip: I have a rule to only take cabs after 11 p.m. or when I’m carrying more than my body weight in baggage. Otherwise, nothing beats public transportation for speed and value. In you live in a suburban area, try carpooling. Sure you may have to go a few miles out of your way to pick/drop someone off, but you’ll save gas and wear/tear on your vehicle when it’s their turn.
Deadbeat acquaintances that stick you with the bill. These individuals can drink anyone under the table; they order five appetizers when they arrive and usually pull an early exit, leaving $20 for a $200 tab.
Tip: Stop socializing with them or don’t go in on the tab. If you get a sideways glance, just explain you’re on a tight budget and prefer to pay as you go. They may call you cheap behind your back, but you’ll have the last laugh when you close on your new condo. Besides, it’s not your responsibility to support their gluttony.
Full-price retail. Nothing is as unnerving as seeing something you purchased a month ago full-price suddenly on the sale rack at 40 percent off.
- Always save your receipts; some stores will refund the difference if you hold the original receipt.
- Become friendly with the sales associates, and ask them when their next sale is, so you’re always in-the-know. They may even give you a call beforehand if you’re a frequent customer.
- Check out your local thrift store for finds. Take a day trip to the Outlets, and other mass retailers that carry discounted designer brands such as DSW, Loehmann’s, Saks Off Fifth, and Nordstrom Rack.
- Swap work wardrobes with friends. It may be one thing to share social outfits (especially with Facebook photos galore), but if you want to mix up your office ensemble and have a friend who wears the same size, do a swap and you’ll double your options.
Hidden cell phone and cable fees. Even if you have auto-pay, make sure you comb through your bills for extra charges at least every few months. New services can easily be added on without you even noticing.
Tip: Monitor your monthly minutes/texts. With so much cellular competition, you may be able to get a more affordable plan, especially if you’ve had the same provider for years.
Impulse buys. Have you ever seen something and just had to have it? It was obsession at first sight, and you knew that if you didn’t snatch it up that second, it’d be lost forever and you’d never be able to find it again. It’s the reason why you have a zebra print cardigan in your closet that you’ve NEVER worn.
Tip: Admire it. Touch it. Take a snapshot with your phone. Send to friends. Then ask if you can put the item on hold, and leave the store! Sleep on it. If you still want it the next day and you’ve gotten the thumbs up from a few friends, than maybe it’s become a wiser purchase.
Late fees. There’s nothing worse than discovering a bill you forgot to pay tucked away in your desk and getting socked with a $39 late fee!
Tip: Auto-pay is probably the best way to avoid late fees, but if you prefer to pay bills on your own, set up reminders on your email calendar or cell phone for a few days before a bill is due. Pay online. Save the postage and the worry that it will arrive on time. Also, if you can find a few minutes, call the company and explain you’re always on time, but something came up, you were out of the country, etc. If it’s the first time, they’ll usually waive the late fee.
Lost and “not found.” This includes MetroCards or other public transportation passes, train passes, phone chargers and any other item that if lost, will have to be replaced immediately.
Tip: Tuck your MetroCard in your wallet, no shoving it in your jean pocket or coat. In NYC, a monthly now costs $104, that’s a golden ticket you don’t want to misplace (I speak from experience!). When traveling, make sure you do an eagle eye check of your hotel room before checkout for phone chargers, battery adaptors, etc. Those black wires easily blend into the background.
Store credit cards. Sure, you got 20 percent off your total purchase when you signed up for that store card, but if you didn’t pay it off in full the first month, you’re going to be hit with a high interest rate. Typical store cards average 22-25 percent and the initial savings you thought you seized will be long gone.
Tip: Don’t open it, unless you can pay it in full and it’s a store you’ll frequent regularly. Many stores will close your account if you don’t use the card again within six months, and that can hurt your credit score.
Restaurant “specials.” As the waiter recites his list, your ears perk, your mouth waters, but chances are the specials are 30 percent more than the standard entrees, and their prices are rarely listed on the menu.
Tip: Ask before you order. The waiter may be taken aback, but hey, he’s not paying the tab, you are.
Your daily jolt. I’m a big fan of Starbucks, but I view my Grande Caramel Macchiato as a luxury, not a necessity.
Tip: Make your own damn coffee. An investment in a coffee maker (my friends swear by the single-serve Keurig) will save you in the long run, and you’ll never have to wait on line again.
Takeout/Delivery. You worked late again. It’s 8 p.m. and you’re famished. Hello deliveryman! A few nights of takeout can easily add up to $60 per week. And although you’re justified because you bust your butt at work, reward yourself with a new sweater, not mediocre sushi.
Tip: Cook two big meals on Sunday that can be easily reheated during your busy week.
Got any tips and solutions for avoiding common money drains? Share them in the comments!