You may feel like you have your approach to personal finance and your budget all figured out, but in reality, it is a real challenge to keep complete track of everywhere your money goes. For instance, you likely know how much you owe on your mortgage or line of credit, how much your utilities typically cost every month, and what your car payment runs.
This last year likely changed a lot of your habits drastically, and while you may not be spending on travel and going out to restaurants, it is always a good idea to look at your budget and determine if those small monthly expenses are still needed. Automatic payments (think entertainment streaming and app subscriptions) can impact your personal finance plan more than they should – by eliminating these unnecessary purchases, you may be able to save hundreds or even thousands every year to eliminate some debts faster, pad your emergency fund, or move up your retirement date.
This recent article from the National Post gave five areas in which you could be wasting money in your budget and not even know it:
- Unnecessary insurance rates—Make sure you are actually getting the best rate possible on all your insurance policies. It is easy to shop for an insurance policy and watch as it gets automatically taken out of your bank account every month without thinking about it any further.
- Bank accounts with little to no interest—Make sure your banks are paying for the privilege of holding onto your money.
- Overspending without purpose—Big purchases are easy to keep track of, but those smaller purchases can quickly add up.
- High-mortgage interest—If you can switch to a mortgage with a better interest rate, do it.
- Shopping without rewards—Look for ways you can get rewarded for buying items you would anyway.
One other helpful tip we want to add is to put your digital annual subscriptions into your calendar with enough time to cancel if you no longer feel like they are worth the money. If you do decide to cancel, remember every platform has a different cancellation policy and process – you may need to do some research to figure out how to make your cancellation final.
For those big and small personal finance decisions in your life, we are always here for you. If you feel like your financial plan could use some revision, do not hesitate to call to speak with one of our financial professionals.