Business & Money Articles

Recommended Reseller

Your Online Resource for great deals on all your favorite Products & Services
through quality Resellers. We recommend accredited and Industry Leading Resellers.

Four Budget Busters That Can Drain Your Wallet

Posted: March 2009

So, you finally decided to make a budget and stick to it! Congratulations, this is a first step toward solvency. But there are four money gremlins many people meet on the path toward financial freedom that can poke enough holes in the budget to keep money draining out faster than it comes in.

The first of these money-grabbers is the late fee. It may seem like a small thing to pay one or two bills after the due date, but over time, late fees add up to real money. Late fees on most bills range from 1 to 3 percent of the original amount of the bill, but if you are talking about a $300.00 heat bill, that’s an extra nine dollars in one month that you’ve lost, all because the post office seemed so far away. Credit cards are more punitive, charging a standard $35.00 per late payment, even if the outstanding balance was paid in full. Pay that credit card bill late a few months during any year, and you’ve lost the equivalent of one or two tanks of gas. Continually accruing late fees can put the brakes on saving or investments in hurry, as well as making some ugly marks on your credit history.

Avoid late fees by writing the check for bills coming due the day you get paid, but wait to mail the checks until five days before the bill is due. This method keeps you from spending bill money on other, more fun, things, and ensures that the payment is posted to your account within the grace period. Writing a paper check, rather than using electronic bill payment, also allows you to benefit from what is called the “float,” which is the time it takes for the check to clear the bank. Depending on the banks involved, the float may allow you to have that money in your checking account for three days or more after the payment has been posted. If your checking account pays interest, that means more money in your pocket. When money is in two places at once, everyone except the bank wins.

A second money gremlin is an unused or under-utilized subscription or contract. The biggest offender in this category is the gym or health club membership. Most people enter into these after the holidays, motivated by too tight, post-Thanksgiving slacks and the pressure to make some kind of new year’s resolution. By April, their visits to the gym have slumped to nearly zero, and by year’s end, dust is collecting on the ab machine and the treadmill stands stationary. Many times, these memberships aren’t transferable, so you can’t sell the contract. Fitness isn’t restricted to a health club – a few free weights, some good quality walking shoes and a well-traveled path are all that are needed to keep in shape. Moreover, some forward-thinking companies offer “wellness” plans that include free or reduced rate gym memberships to participants. Taking advantage of any employer-sponsored wellness plan will keep you and your bank account in tip-top shape. Another contract that can be more expensive than it is worth is one covering “bundled” services from telecommunications or cable providers. It’s worth comparing what you pay currently for individual services that you actually use to what the bundle of services costs to see if that bundle actually has value to you. For example, in my area, one cable company offers high speed internet, local and long distance telephone and cable television for $99.00 per month. My actual cost for local landline service is $35.00 per month (including long distance), my prepaid cellphone costs around $10.00 per month, and my internet service is $12.00 per month. I only watch television about one hour daily, so not having cable is not a major concern. By not bundling and not being caught in any long-term contracts, I have saved over $40.00 every month and still get the services I need. $480.00 a year is nothing to laugh about – it could easily be one month’s rent, house payment or car payment. The bottom line is, get rid of any subscription services or contracts for services that you don’t use or need.

Third, the lure of prepackaged snack foods can take a big bite out of your wallet. That snack cake you buy from the vending machine every morning carries a nice markup, as well as lots of sugar and calories. Consumers pay for the convenience of single serving packages, and this has consequences if money is as important as time. As an alternative to vending machine munchies, try buying the same products in bulk at the grocery store, or better yet, at one of the discount stores, such as Sam’s Club or Costco. Use coupons on brand-name items when you can. Then, divide the bag or box into smaller-sized portions, and package these portions in good quality sandwich bags or plastic containers that are easily stored and ready to grab when you’re on the go. You get to eat your favorite goodies and save money at the same time, and this makes any snack taste a lot better.

Finally, habits such as smoking, drinking and buying those lottery tickets do just as much injury to your bank balance as they do to your physical and spiritual health. If you are resistant to a sermon on the morality (or lack thereof) of these habits, think of them as forms of voluntary taxation. That’s right – a large part of the cost of every pack of cigarettes, every bottle of beer and every lottery ticket goes toward funding state and federal government; Uncle Sam and his fifty state legislatures would be lost without your input. It’s not easy to quit any of these things – that’s why they are called “vices” – but over the long run, the money you get to keep will more than pay for any pleasure or excitement you lose.

Budgeting, saving and investing aren’t rocket science, but mastering the money gremlins in your life may make you feel like you’re on a slow trip through outer space. Beam those gremlins up and out of your life, and proclaim yourself the Master of your own Money Universe.

Return to FREE Articles