Whether you’re saving your hard earned dollars for a big purchase (first home) or your current goals are to be debt free, every dollar counts. Tap-and-go and direct debits may be convenient but it literally comes at a cost. If you look into your account history, there’s a good chance you’ll find money leaks that you can patch up. Here are the most common money leaks that could be draining your account, according to Gerry Incollingo, the Managing Partner of LCI Partners, a firm that specializes in accounting advisory, lending, wealth, property, insurance and legal. Keep reading for more on money leaks and how to get more savings!
Here are the Money Leaks That Are Hurting Your Savings
1) Late fees
If you need an incentive to get your admin sorted, it’s late fees. Companies can charge you up to 10% of what you owe. It is an avoidable cost and one of the easiest ways to get your finances back on track. Set up direct debits to ensure you never miss a payment or set a recurring reminder on your phone to pay your bills a few days before they are due.
2) The monthly subscriptions you don’t have time for
Lockdown had us binging and streaming every show available. And with a new streaming service popping up every month with a different offering, it was hard to resist. But with life resuming back to a new normal, you may be trading nights in for a night out in the town. Now is the best time to do a count of your streaming services and consider if you need them all.
Credit card companies do a great job at marketing incentives to have you sign on. 100,000 frequent flyer miles may sound attractive but these credit cards come with a cost. Not only is the interest on these cards higher, there’s often an annual fee to pay up too. If you do need a credit card, find one without any frills – they’re always free to sign up.
4) Payment plans
Buy now, pay later may satisfy our urge for immediate satisfaction but it comes at a cost. If you do the math, payment plans end up charging you more than the sale price. Take the cost of an iPhone for example: most telecommunications companies will offer mobile and phone plans in which customers pay off a phone over a period of time. If you compare these plans with SIM only ones, the cost of the iPhone is much higher on a payment plan. If you can, always make purchases up front.
5) ATM fees
With tap-and-go available everywhere, you may not need the ATMs as often. But cash isn’t exactly dead and it’s always a good idea to carry some cash with you, just in case. ATMs may not be readily available and if they are, they might charge you a hefty and unnecessary fee.