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Where Does Your Money Go Each Month?

Where Does Your Money Go Each Month?

Those of us familiar with SchoolHouse Rock! might remember this little jingle:

“We can’t stop the money from trickling out,

But we can control how it flows—

And we can start by being aware of where the money goes.”

The catchy tune holds as true today as it did in 1995: We can’t stop paying our bills, but as long as we understand our finances, we can control them enough to keep us out of financial jeopardy.

 

Why is your money disappearing?

Forget the big bills like rent or food; what we’re looking for here are the sneaky costs in the background that are draining your bank account:

  • Unused subscriptions: In the age of Netflix and video streaming, many of us have one (or more) of these services sapping our budgets. Know how much you’re spending on these subscriptions, and be aware that many memberships automatically renew: You may be paying for a service without even realizing it.
  • Overpriced services: And while you’re examining your spending, take a look at what services you’re purchasing and whether they’re worth the cost. Your plumber’s fee may be necessary, but that sixty dollar per month gym membership certainly isn’t.
  • Late fees: Be mindful of the late fees that accrue when you miss payments on debts. Even a single missed payment may end up costing you twenty to thirty dollars in fees—a complete waste of money.
  • Habitual purchases: Be wary of recurring costs that are small—it’s easy for us to ignore small purchases, even if we make them daily. Your three dollar cup of coffee, over the course of the month, will cost you ninety dollars—a high price to pay for a cup of joe.

 

Track your statements

The best way to learn where your money is going is to keep a close eye on your bank accounts and credit card statements. These documents give you a paper trail of exactly where your money is going—and where you can cut corners when saving for the future.

 

 

 

 

 

 

Photo Credit: bigstockphoto.com user Fashion Photographer

 

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