7 Expenses Destroying Your Budget

Expenses That Are Destroying Your Budget

Everyone has items that are household necessary items. Things that are a must that can not be altered. Food, mortgage, car note, car insurance, electric bill etc. These are things that must be paid monthly like clockwork. There are also many other things that people spend money on that are not absolute necessities. For those who are on a budget or need to have some structure to their budget, try these tips to see if you have any of these expenses that are totally destroying your budget:

1.  Credit card interest payments- Lenders make a killing off  of interest. But here’s the thing: Just because you can’t pay off your debt right away, don’t settle for a high-interest rate. So what should you do?First, stop adding more debt. Step away from the credit cards. Secondly, transfer your balances to a lower rate card or  use a company like Credit to lower your interest rate.If you're not paying off your credit card balance each month, you're overpaying for the purchases you charge on your cards. Make a plan to start paying down credit card debt using the avalanche method , snowball method or whatever works best for you. A debt avalanche is a type of accelerated debt repayment plan. Essentially, a debtor allocates enough money to make the minimum payment on each source of debt, then devotes any remaining repayment funds to the debt with the highest interest rate. This system continues until all the debts are paid off. Oftentimes, people can address their debt by creating a budget and sticking to it, which frees up cash to implement an avalanche debt-payoff strategy. Once you’ve got a handle on what you owe and where you spend, it’s time to start on the avalanche. The debt-snowball method is a debt-reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balances first, while paying the minimum payment on larger debts.

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2. Your cable bill- For a long time, I was paying $150/month for premium channels. But once I found Amazon Instant Video, it made the switch a lot easier.Amazon Instant Video only costs $8.25/month ($99/year). Besides, with the internet and streaming services, expensive cable isn’t always necessary. Is your cable bill costing you a fortune? We are in the age of Hulu, Netflix and tons of other online streaming services. It is a much better way to have a more cost effective bill than paying for premium channels monthly that you may not even use. For me, between work and other obligations, I barely have time to watch TV most days. It's insane to me that I've just paid my monthly expensive cable bill for so long without thinking about all the money I was throwing down the drain.

3. Bank Fees- Have you checked your bank statements lately?If you’re trying to learn how to stop spending money on unnecessary things, this is a big one. I’m not saying any names. But at my last bank, there was a fee for Every. Single. Thing. An account maintenance fee here and a card swipe fee there. There was even a fee for not keeping a certain amount of money in the account itself. From ATM charges to paper-statement fees, banks regularly milk customers for extras. The average U.S. household spends $290 a year on such annoying bank fees, according money transfer platform TransferWise. Some of the most sneaky include charges for talking to a teller, making a cash deposit and a returned mail fee. Read disclosures for any account you open and steer clear of banks with an extensive fee list. If you still aren't sure about how fees are charged, ask questions. Also, consider banking with a community bank, online bank or credit union. Smaller outfits and digital banks tend to have lower overhead, and credit unions are not-for-profit institutions that pay some of the profits to members.

4. Pricey gym memberships and exercise classes- Gym memberships and boutique fitness classes can take a bite out of your budget, especially if you don't go regularly or let classes expire. Stretch your exercise budget by taking advantage of free trials and supplementing pricey group classes with outdoor or at-home workouts.

5. Monthly Subscriptions-  Subscribing to music or video streaming services, gym membership, food delivery or monthly beauty product delivery can be convenient, but they are also an enormous money suck if you aren't using them regularly. After all, that fresh produce from Blue Apron will go quickly — hello, Brown Apron! — if you don't move fast. It's easy to let services pile up and spend (or waste) about $269 a month, as certified financial planner Kevin Michels found when he evaluated one family's monthly subscriptions. These included Netflix ($8), Dish Network ($80), Amazon Prime ($16.66), Five Four Club ($60), Pandora Plus ($4.99), Blue Apron ($70) and a car wash subscription ($30).

• So what can you do? Cancel subscriptions you don't use every month. If you don't remember what you have signed up to use, review your bank statements for recurring charges. On the fence about whether to cancel? Take a hard look at which subscriptions are actually being used throughout the month.

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6. The newest phone-You know those people who have to upgrade every year? That’s a great way to keep the never-ending payments. The bottom line? They make our phones pretty good these days. A phone that you’ve had for 2-3 years isn’t going to pale in comparison to a brand new one. So paying for that new phone every month – and continuing to upgrade yearly – isn’t the best money move.Cell phone fees are climbing and may not reflect the amount you agreed upon when you signed your carrier contract. Fees include the universal service fund fee, state taxes, state telecommunications excise surcharge, emergency response fees, regulatory and administrative fees, gross receipts and city taxes and fees. Some of these fees are unavoidable, like taxes, but others can be negotiated, such as administrative fees.

• Aside from reducing your cell phone usage (which may not be realistic), reduce fees by comparison shopping with carriers for the lowest plan. New activation fees can be high. 

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7. Late Fees-Habitual late fees can be a few hundred dollars per month because late fees are applied to nearly everything, from movie rentals to credit cards. Sign up for automatic bill payment to meet rent, credit card and any bill deadlines. That way you don't have to remember to pay the bill and the cash is automatically transferred on the day you schedule payment. For any pesky rentals, set up an automatic reminder on your calendar or cell phone the minute you rent the item, so you won't let the return date slip away.