Reduce Debt Increase Wealth

Spending Leaks

June 04, 2023 MIsterchuck Season 4 Episode 168
Reduce Debt Increase Wealth
Spending Leaks
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Show Notes Transcript

Spending too much but not sure or just living paycheck to paycheck how to fix these problems.  Always thinking about spending  money almost everything do and see try’s to get us to spend money. Lets see how to stop that type of spending.

Article Link: By Phil Town 

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Charles McDonald:

Hello, I'm your host, Mr. Chuck, I retired accountant turned truck driver, I reduce my debt in a relatively short period of time, debt reduction, to achieve financial freedom takes commitment, confidence, determination. Spending leaks, spending too much, but not sure or just living paycheck to paycheck, how to fix these problems. Always thinking about spending money, almost everything we do and see tries to get us to spend money. Let's see how to stop that type of spending. And I'm guilty of this probably more than anybody else. When I started out, I was gonna do some upgrades to my power washer, because it was getting hard to start. And I wasn't using it in the last couple of years because it was just too difficult to get started. So I went to the store, I got a new spark plug. And I did an oil change. And lo and behold, it starts on the second pole in our runs great. So then I started looking at wow, I got a leak in my one eye see if I can get some fix for that. I bought some O rings that didn't work. So I ended up having to buy a new trigger gun and a new nozzle to go with that trigger old gun. And then I got a new hose and then I got some quick disconnects to put on the end of the hose so I can hook up really quick. And it makes it much easier to use my power washer. But did I really have to do all that? Not really, I could have gotten by. But I was tired of fighting the hose. So a 50 foot hose that's more pliable and flexible and easier to pull around. I figured that was a good upgrade that did this connects, I probably could have done without because they were about 13 bucks apiece, and I needed to have them. But I want to hadn't got it because I'd like life being easier. So with all that said, I started looking at car detailing videos online. So now I overspent on buying products that clean my car to detail my car on the inside. And on and on it goes. I finally decided enough is enough, I gotta stop. Then I thought I'll do an episode about spending leaks, because that's what I had. I had definitely had a spending leak. And what can we do to avoid these things? Well, the first thing is, don't overdo it. Before we get started, if you find value in this podcast, you can support it by going to my subscription link in my show notes, or go to reduce that increase and click on the support button end up in the same place. It's not required, but any amount is appreciated. And I in my show notes, I have links to two articles about word Oh my money go 15 spending leaks destroying your budget. And another one tips for spending money on tips for not spending money I guess would be a better name of that article. And the first 115 spending leaks that destroys your budget. And this is something if you're not doing anything at all, and you have a debt problem. These are things you can do to help with your debt problem. If you already are tracking and you have a budget set up and you're getting your debt under control, these are things that do that can help speed up that process. But you can't just do it for a short period of time. These are things you got to do the rest of your life and stay out of those debt problems. And maybe you try to live within your means and not spend too much. Then when you look at your bank account, you're wondering, Where did all the money go? If you feel like your money keeps disappearing? Check out these calming common spending links. It's so easy to spend more than you realize even if you don't have exact current expenses. It's important to understand that it's actually all the tiny expenses that add up over time that are destroying your budget and is author here saying she has figured out her savings by doing these things over 20 year period. Convenient foods. Buying convenience foods can be a major leak in your budget. Do you do any of these buy a 20 ounce soda or bottled water at a gas station or convenient or drugstores purchase anything from a vending machine get individually bagged food items such as chips or cookies by already peeled and chopped fruit or vegetables at the grocery store. If so you're paying a huge premium for convenience. Vending machines and gas stations charge at least double for snacks and drinks compared to grocery stores. With just a little forward thought and preparation, you can save so much money by an eight pack of soda and next time you're buying groceries ponents bonus points if it's on sale, and put the bottles in the refrigerator. Instead of buying little bags of chips, buy a full sized bag and divide it into Ziploc baggies. Spend a little more time a whole lot less money by peeling and chopping your own fruits and vegetables. By making your own convenience foods you can save hundreds if not 1000s of dollars a year. Examples The $2 a day say by $2 times 365 is $730 a year times 20 years is$14,600 $2 a day. It adds up like this shows you $730 A year$14,600 over a 20 year period. Think of what you could do with that money to brand name everything. If you insist on buying brand names of everything. You're definitely overspending. Sure there's some things you wouldn't be the real deal, running shoes and computers for example. But for most food items, home decor accents, and even a lot of clothing, the brand name is meaningless. Try some generic food brands. Next time you at the grocery store for cereals, baking ingredients, canned or frozen vegetables or crackers, or cookies, the brand usually isn't very important. Now just a tip here. I always buy store brand, almost everything. But there are some things that are not as good. So once you figure out the things you don't like, then you stick with your name brands or try a different brand that may be a little bit cheaper but not the store brand. Aldi is one the best place to save a lot of money by buying generic. One of the generic brands are actually even made by name brand companies. But without the fancy packaging or high marketing budget. I used to be a truck driver. And I went and picked up for Walmart when I was driving that particular job. And I was taking stuff for Walmart delivering Walmart stores, I would pick up stuff to take back to the Walmart distribution center. And I had it was labeled, you know Sam's whatever, whatever the Walmart brand is nowadays, I don't know. But it was the same major vegetable canned vegetables, Delmonte eggs exactly from the same plant and everything. So you could definitely say they're on your food. I'm not really sure what they are now that was a few years ago. disposable products using paper plates, napkins and paper towels is kind of throwing money into the trash. That is another example of paying for convenience. You save yourself time by not having to wash as many dishes are towels. But the cost of buying these items over and over throughout your life is exponential. Get a nice reusable water bottle instead of disposable water bottles. He is dishwasher safe plates and cups instead of buying the paper version. He can even experiment with cloth napkins were tried life without paper towels. You save $5 A week times 52 weeks is$260 a year, times 20 years is$5,200. Anytime you're buying something that makes it convenient, you're gonna be paying more no matter what it is. Going out to lunch. If you decide to eat out every day during your lunch hour, you're definitely spending too much on food. Try packing your lunch more and eating out less. Even if you brought your lunch three times a week. You'd be surprised how much money you get much more money you have at the end of the month. $25 a week times 50 weeks is $1,250 a year. times 20 years is 25,000. If you go out to lunch twice, twice a week, that's 25 bucks, but they're saying pack your lunch three times and that's what you're gonna say I think you're gonna save a lot more than that. Fees. Do you realize you're probably spending a lot on your money on fees avoidable fees, late fees for being behind on your bills range from eight to $30 they fees for using an out of network. ATM is now $4.69. The interest you pay on any type of loan or credit card is also a huge spending Lake. Check your credit card bills and car loans or mortgage statements see how much of your monthly payment just goes to interest that's making the banks richer. Pay off your debts as quickly as you can to reduce costs. A lot of people were trying to do that. I know that overdraft fees as another fee that you can avoid. Don't go over your limit on your credit cards because that's the fee that they're gonna nail your with. late payment fees, overdraft fees, and interest. All those things are things that you can avoid paying drinks from fancy coffee to energy drinks, to your happy hour. Drinks can play a major part in destroying your budget. Of course there's no need to get off coffee or cocktails on together but there's always ways to save money when you look for it. You can make your coffee at home before you leave. Get up five minutes earlier. Have your friends over for drinks instead of going to the bar sometimes $3 A drink per day times seven boxes $21 a week. 52 weeks is 1092 A year 20 years 21,000 memberships you don't use remember that gym membership you sign up for but never use or that monthly subscription box you always forget about until it arrives. Cancel. There are so many things to become a member for right now from Netflix to Hulu to Stitch Fix to FAB Fit fun to Sirius radio and Blue Apron. Take a look at your credit card statement or bank account. Are there fees you're being charged for monthly a yearly you don't utilize? cancel them. And that could be up to 7000 plus a year in savings. checkout lane purchases if you buy candy gum or magazine from the checkout lane you're again paying for convenience, the stores aren't dumb. They're designed the checkout lane to prepare purposely encourage you to make impulse purchases. quit buying things at the checkout lane, throwing away food and a good thing at the checkout lane has candy bars. You probably can go another part of that same store and buy the candy bars a lot cheaper. My had to buy a bag of them. Bag them better one. The average American household throws way over 2000 and wasted food every year. If you let your grocery spoil before he eat them that's like cash in the trash. The solution good meal planning a tribe by planning meals before you shop you won't buy more than you use. Plus make dinner time way easier. Plan ahead, don't buy more food and when you're going to use for least four or five days don't buy more than four or five days in advance. That's what I always tried to do. Guilty Pleasures habits like smoking cigarettes or playing the lottery really adds up so so much extra spent over a lifetime 43,000 Your car unfortunately your car isn't an investment. Like most thing you buy cars lose value once you purchase them. Don't fall in the trap of thinking that reliable transportation always means a brand new expensive cars, new cars loser value extremely quickly, wherever you can purchase a gently used one to four year old car for virtually half the price. That's most likely gonna be three years now because most leases are a minimum of three years. Another huge spending leak is your car payment. Many people buy it a far more expensive car than they can actually afford and get a five to six year loan to pay for it. That is so much waste of money spent on entrust not to mention the increased cost of buying something you really can't afford. An average car payment now has reached $523 a month. And I believe that's much higher. I believe that's closer to $800 a month for some the costs of these new cars. The ideal solution is to save enough money to pay cash for your cars. Failing that the rule of thumb is getting no more than a 36 month loan. If you can afford payments on a three year car loan, you can afford the car so a lot of cars where they you're not going to be able to afford that. But yeah, you try to shoot for that maybe you had to settle for a four year loan. Make $25 extra a month payment paid off in three years. overpaying for services is so important to be informed Consumer that means comparing prices. Far more things in a Gosha bowl than you might realize. This is what you should do every year. Be sure to look at your monthly bills to make sure there hasn't been a price hike. If you notice a change or a mistake, give them a call. I had an enormous luck by calling cable or internet providers, or a cell phone company to see if there's similar plans available at a lower cost. Do that at least once a year, I even had them offer a 10 month monthly credit for being a longtime customer. Keeping a simple monthly budget will help you notice changes prices more easily. Some bills are up for negotiation, auto and home insurance, cable, cell phone credit card interest rate, not sure much about credit card interest rate. When you call be polite and let them know you're no longer able to afford their services. Most of the time, they will offer a lower price solution rather than then lose you as a customer. Also keeping the eye on the cost of service like getting your hair, hair and nails done. He should go more or less often to say the money. If you're in debt, your money could be far better used towards financial freedom than manicures. Good example. And she's got 7200 A year say or 20 years, about $360 a year. And Paul's purchases you know all the times you randomly buy some you don't need without really thinking about it that really adds up. Before you buy anything over a value of $50 You should ask yourself, Do I really need this? Can I do without it. That's where I get in trouble. I don't do that sometimes. And then I end up overspending like my power washer upgrades, I really need it the new one I could get by without the new hose. But a longer hose a more flexible hose made it more convenient. So I paid extra for convenience. I could have saved about 50 bucks, but have had my power washer a long time. And one of the things I dislike about it, other than being hard to start, which I solved that problem was the hose is hard to wind up. And it doesn't stay wound up at once to go everywhere and it's hard to control. Before buying some ask yourself, What am I going to use this for? Where am I gonna keep it? Have ever thought anything about buying this before? Or am I just address and because it's in front of me now. If you don't have a good answer for all three questions, you can assume it's a waste of money, leave it behind with no regrets. Plus, there's some about exercise and self control that makes us stronger. $10 a week, 520 year, 20 years 10 grand, buy a more to say more. I'm so guilty of this, this is not me, this is the author, it's almost painful for me to pass up a good deal. But it's not a good deal for means spending money that I wouldn't have otherwise spent. Another way this plays out is when you have to spend more to use a coupon or get free shipping. I'd rather with pay the extra $7 in shipping and then spend the extra $40. They get the free shipping, or the$50 or whatever it is. Amazon Prime I think is $172 a year. Now, if you order a lot through there and you get something a couple times a week, maybe it's a deal. If you don't hardly ever use it. That's one of those things you probably could cancel. I'm trying to be better about buying something just because I have a coupon. I generally don't use coupons because it wants you to buy some that normally don't buy. So I don't ever use coupons the coupons they save I usually forget about and never use them anyway. But that's just me. overspending on food, food could be one of the biggest expenses in our budget. Luckily, there's lots of ways to plug that spending late. You can save so much money by changing up the way you grocery shop. By buying mostly what's on sale and shopping with a list and plan. You can drastically reduce your grocery bill only by what you're gonna use and don't do impulse buy in something you really don't need. Going out to eat is probably the biggest way most people overspend on food. Don't, it's easy to use the excuse that it's food and hey, we need to eat. Add up how much you spend eating at restaurants or getting takeout over the past month and might just shock you. And how much are you spending on getting food delivered to your home? That is a big waste of money. In my opinion, you can really save a lot if you quit using Uber and having food delivered to your home. The one simple change of preparing more of your own meals will leave so much extra money in your bank account about$48,000 over a 20 year period, or $2,400 a year. She's saying$200 a month, adding it up one of the best way to stop wondering where all my money goes is added up as you go. Let's see how much the spending leads actually cost us. Over 20 years, their grand total for these habits is $371,878. That's based on her numbers. It could be way more than that. Or it could be way less depending how frugal you are. Maybe you're not doing all those things, but you're probably doing some of those things. So quit buying stuff at convenience stores. quit buying one can of soda, or a can of soda in that bag of potato chips or whatever. Buy them ahead of time at the grocery store and take it with you have a small cooler, put your soda in a cooler and put your PE chips in that cooler with it and put it on the front seat of your car. If you get hungry, you got it. If you get thirsty, you got it. My wife does that Marouane drive in a few blocks and she's taken enough food with us they go forever. That's just her. We could be going to a restaurant and she's taken snacks to eat on the way to a restaurant. So that's the first article and the other articles seven tips for spending money wisely. Tip number one is track your spending, which I talked about in great lengths, get control the end Paul says don't do convenience buying and don't buy on impulse. Put money on your credit card. If you can afford to pay off each month. Only use a credit card, treat your credit cards like cash and pay them off right away. Even you don't have to wait a month to pay it off. He can pay it off then the week if you want. You can pay it off every payday if you're paid weekly, pay him off every Friday. If you're paid every two weeks, pay him off every payday. Stop trying to impress other people. Figure out what habits drain your budget, he may have a habit like smoking cigarettes, on my case, cigars, maybe go out at the happy hour have two drinks, you're risking getting a DUI on the drive home. So maybe you should cut that down to one drink. Don't have to but I'm just saying. Learn to value investing over products. Because if you invest, you get the money working for you. Learn to invest. Now if you don't know anything about investing, learn how to invest your money. There's YouTube out there, there's a lot of information blogs, and start reading them. Even if you don't have the money today to start investing. start educating yourself today on what you can do with your money. Once you get your debt paid off and under control. That's very important. I'll be back in one moment with my final thoughts. If you're interested in learning about an online software that helped myself get out of debt, it does tracking, budgeting, and keeps track of all your assets and all your debt and even tells you how much and when to transfer money into your savings account and how much and when to transfer money to your debt and which debts to pay off in order. First. It's not cheap. It's a one time payment. But it will definitely be an investment something and yourself and an investment in your personal financial life. If you're interested, send me an email at reduce debt increase and I'll send you the information about this online software that worked great for me. So what did we learn by from this episode? Whenever you're buying something that makes it more convenient, you're gonna pay more money, especially in the food world. So if you go to the grocery store and you buy Read cut vegetables or fruits, mostly fruits is what I see. You're gonna pay more than just buying the whole thing. Even if you think you're not going to eat the whole thing, you can cut it out and half at home, put saran wrap over it, put in a refrigerator, and be good for a day or so. And you need to eat the whole thing before it spoils. Because that's another place your waste money is throwing food away. Don't buy food at a convenience store at a gas station. Plan ahead, if you're gonna go for a drive that's going to be gone for more than 10 minutes. And you generally stop somewhere and buy a soda or coffee or something to eat. Take it with you before you leave. That way you don't have to stop. And if you stop for gasoline, I never go inside. So I'm not tempted to buy anything. As far as buying things at the grocery store checkout line, avoid it at all costs. Plan ahead. If you want a candy bar, buy it back in the aisle where it's cheaper, maybe buy a pack, each of them are three or four of them, then you have extra ones to take with you have a little cooler, you can put your soda, your snack, and the cooler, put it on the front seat of your car. If you get thirsty or hungry, you have it handy. Again, you don't have to stop which makes getting to where you're going a little bit faster. Review all your services at least once a year at your cell phone, your streaming services, your cable TV, those type of things because they're always offering new packages. And if your fees are going up, perhaps you have a introductory rate, and it goes up after six months or 12 months. Call and see if you can get something compatible at a lesser price. You can always threaten to leave them. But don't leave them until you find something better. And then go back, call him back and cancel. Because you lot as these subscriptions you can't cancel online, you have to actually call them to cancel and tell them that they didn't do off you a good enough price, he found a similar service getting the same thing for a lesser price and lay them and a year later, you can go back and get an introductory price again. So it's just little things like that, and your cell phone service, they're always doing the same thing. They're always offering better and cheaper plans. But if you're an existing customer on your existing plan, they don't tell you about these things. You have to find out yourself by being an informed consumer. Check your prices, check around before you call and know what kind of price you can get. And see if they'll match it to keep you as a customer. Don't have food delivered for Uber, whatever because you're gonna pay a whole lot of money extra for the same thing. You're better off going to the restaurant and eaten than you are having that having a delivered the same food. Just go there and eat. Have a cocktail while you're there. There are plenty of ways you're leaking money and by making late payments and by going over your credit limit on your credit cards and paying interest on credit cards. You're wasting money, your money is leaking. That's money you could be putting aside to invest more money for a longer period of time. Some money you can have five years down the road that you wouldn't have. So be smart. Ask yourself anything over $50 Why are you buying it? Do I really need it? What am I going to use it for? How often can I use it? Where can I store it? Those type of things. If you're moving every year from apartment to apartment, that's just one less thing you have to move to the less stuff you have. The faster to move is gonna go the easier it is just have the bare necessities do you need to get by on and you're saving some money while you're at it. And it's a lot has less hassle when you go to move. These are just a few things you can do to stop your money from leaking, your spending leaking. The more cute and then Tony to your finances you are, the better at controlling these things you're gonna be and the more control you have over your money. Because if you're tracking your money, you know how much is coming in, you know how much is going out. You're not just spending money to have to impress somebody. You'll be better off because you did so