7 Everyday Expenses That Quietly Drain Middle-Class Wealth
If you often run out of money before payday, it's easy to blame inflation. Rising costs can wreak havoc on your monthly budget. But everyday expenses can also make it easy to lose track of your income.
Here are seven everyday expenses that are hard to ignore once you see the impact they have on your wallet.
Dining Out
A survey from Zappi revealed that 33% of households earning between $100,000 and $149,000 eat fast food four to seven times per month. While a McDonald's Value Meal every so often, or even a birthday celebration at a high-end steakhouse, won't bust your budget, it's important to be mindful of restaurant spending.
Rather than hitting the drive-thru on the way home from work, plan meals ahead of time to save money. You can make affordable and delicious stews in a crockpot, toss together a quick and healthy stir-fry, or batch-cook and freeze easy meals like lasagna to reheat on busy evenings.
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Peak Electric Power
If your electric company offers "time of use" billing, be mindful of when you use electricity. Using power during peak hours can cost 30% to 40% more than at other times, according to Residential Solar Panels.
By shifting tasks like running the dishwasher or washing clothes to off-peak times, typically late morning to early afternoon, overnight or on weekends, you can lower your electric bill.
Impulse Buying
Whether it's a late-night Amazon purchase or a quick click in a TikTok shop, impulse purchases can quickly unravel your financial goals.
"Impulse purchases are often driven by emotion rather than need or value," according to a YouTube video by Practical Wisdom. "Impulse buying can quickly drain anyone's finances." When you find yourself tempted by the latest trending outfit or kitchen gadget, add it to your online shopping cart but don't check out immediately. Let it sit a few days until the impulse passes and you can decide whether you really need the item.
"Better still, save it somewhere else in a wish list, so that the online shop doesn’t email you with tempting offers to come get your 'forgotten' cart items. You may find a few months down the line that you no longer want that cool jacket quite so badly.
Subscription Services
Canceling subscriptions may seem like the most basic personal finance advice to save money. After all, Americans spend an average of $1,080 per year on subscriptions, including more than $200 per year on subscriptions they don't use, according to CNET.
But once you've canceled those streaming services you rarely watch, it's time to dig deeper. Take a look at newsletter and website subscriptions, software-as-a-service, and even your Amazon Subscribe & Save items. You might be able to reduce expenses by purchasing items only as needed or shopping sales at local stores.
"Many wealthy individuals regularly review their subscriptions and services to ensure they are only paying for what they actually use. They avoid unnecessary expenses by canceling subscriptions that no longer serve them," according to the Practical Wisdom video.
Bank Fees
If you have a checking account at a traditional bank, you might be paying hundreds of dollars in fees annually. Consider switching to an online bank with no-fee checking and savings options, or look for an account that you can easily meet the requirements to waive fees.
Insurance
A survey from Guardian Service revealed that 29% of Americans cut or downgraded home, health or car insurance in the past year to save money. Instead of reducing or canceling coverage, shop around for lower rates.
Robb Lanham, chief sales officer for HUB Private Client, recommended analyzing your home insurance policy to ensure you have enough coverage for the most likely risks in your region. "People analyze what has the highest probability of happening to them and then load up on that coverage and reduce coverage for those things that are less likely to occur," he said. "Using historical data and trends, you can tailor your coverage to your unique situation."
Credit Card Interest
Making small lifestyle changes can help shave dollars off your budget every month. But don't let these small cuts distract you from the big picture. If you're carrying high-interest credit card debt, you could be throwing away hundreds of dollars per month.
Focus on paying off your cards as quickly as you can. Consider debt consolidation onto a 0% APR credit card or taking out a lower-interest personal loan. Once you're debt-free, you can shift your focus to building wealth.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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