Financial Planning

5 Common Money Leaks and What You Can Do to Eliminate Them

Drip. Drip. Drip. That sound coming from your bathroom isn’t just annoying – it’s also costing you a fortune. A leaky faucet can waste as much as 7,000 gallons of water a year, according to the Water Systems Council, needlessly running up your water bill.
An even bigger drain on your finances is bad money management. When it comes to monthly expenses, it can be difficult to identify financial leaks, but just like those tiny drops of water, pennies at a time can add up to an ocean of lost cash.
So, pull on your plumber’s overalls and put these five tips in your tool kit:

1. Review Your Data Plan

According to wireless analyst Maravedis, the average smartphone owner uses just 256MB of data per month, but many people pay for plans 10GB or larger. Review your monthly usage to see if you could save by switching to a cheaper plan. You may be able to save upwards of $300 a year with a plan that better meets your needs. If you’re concerned about overage charges, some wireless providers offer an app to track data usage in real-time.

2. Check Your Auto Insurance Policy

Most auto insurance policy holders renew their plan with their current company each year without investigating the competition. Family needs change each year, and switching plans (or making changes to the one you already have) could reduce your monthly auto insurance bill.
If you don’t have time to do the research, an independent auto insurance agency can do the legwork. It doesn’t benefit by selling insurance from any one particular company, so you can count on an unbiased opinion.

3. Use a Programmable Thermostat

If you don’t currently have a programmable thermostat in your home, get one. You can purchase a moderately priced model for about $40 (although installation may cost around $100).
If you already have one, make sure you’re taking full advantage of its features – some models allow you to program a different temperature for different days of the week. On average, every degree you raise your thermostat in the summer or lower it in the winter saves 2% on your energy bill.

4. Eliminate Home Telephone Service

As long as you have a reliable Internet connection and at least one cell phone in your home, you can save big by eliminating traditional land line service. Products like magicJack connect a land line to your personal computer via USB, so you can still have the comfort of speaking on a telephone without shelling out the big bucks. Skype is also a convenient (and for most calls, free) alternative to a land line.

5. Make a Shopping List

American families throw out an incredible 25% of the food and beverages they buy each year, according to the Natural Resources Defense Council. Considering that the average family of four spends more than $1,000 each month on groceries, that’s a lot of money down the drain.
You can prevent overbuying if you create a family menu for the week and write a shopping list before you hit the supermarket. Once dinner is over, freeze your leftovers for future enjoyment.
Final Thoughts
Fixing money leaks isn’t rocket science, but it does require research, discipline, and attention to detail. You can always find new ways to reign in your spending. Make a few phone calls, conduct your own research on the Internet, and push yourself to change those pricier personal habits. Unless you tighten the spigot and fix the leaks, you could find yourself in hot water.