Identify and Solve Your Spending Mysteries
Do you feel like some of your hard-earned cash seems to vanish into thin air each month? I kept noticing a big chunk of my change seemed to be disappearing into a monthly black hole, despite what I thought was decent budgeting. So, I decided to clean up my act and set out to locate these hidden areas. Here are a few tips that I learned along the way that can help you nab your mystery spending, too. (See also: Find Your Hidden Spending Habits and Save).
1. Unplanned Dining Splurges
Despite having a dining budget, I admit I was not keeping track of every single drink or ice cream that seemed like a small splurge at the time. While an occasional treat is well deserved, often I was being silly. For example, last week while waiting for our table, my husband and I ordered two glasses of not-so-good, lukewarm chardonnay for $21 including tip. When I go to the liquor store, I can buy two or even three suitable bottles for that price. Do the "quick drink at the bar" a few more times, and you can easily run up $100 a month and not really enjoy it.
I noticed that other little treats were adding up, too. We always visited the ice cream shop after a dinner out or made a few unplanned, weekly fast food stops. Somehow, I was forgetting that the tab for such outings can easily run $15-$20 for four people.
Curbing the Treat Buying
Once I realized what was happening, I established a treat allowance per month. This consisted of setting aside a small, fixed amount in cash, bound in a rubber band. I could do what I wanted with my little roll of cash, but once it was gone, that was it for the month. This quickly stopped the previous over-spending and made me prioritize my buying and how badly I wanted something.
Secondly, I found ways to spread out little splurges more. For drinks, it was as simple as holding off for a more economical bottle of wine at the table, or eating at home, followed by an affordable beer at the bar afterwards. For the ice cream shop visits and fast food stops, I made such trips into planned, special outings for my family. This meant not indulging after already out to dinner or because we were just driving by. Looking forward to these planned jaunts made everyone appreciate them more. Spreading treats into separate outings actually made us feel like we were going out more, too.
2. The Curse of the Last-Minute Gifter
I budgeted for big items, like Christmas and my daughter's birthday, but I was still shocked at my annual gift spend. Things like housewarming gifts, other children's birthday parties, and smaller-scale holidays were really adding up. Throw in a wedding or two, and you can easily go off the rails. I never stopped to think about just how many events we were attending and the types of gifts we bought. Additionally, I would often buy presents at the last minute, meaning I usually spent more out of convenience.
The Gift-Giving Fix
Once I realized that we were averaging 10 dinner parties, 5 kids' birthday parties, and a handful of holidays and special events per year, I made a better gift budget. Then, I saved a bundle by making some of my own gifts, like painted flowerpots, or easier projects like repurposed jars filled with fresh flowers from my garden. Next, I stocked up on some attractive home goods, which I found at craft stores for $5 or less, using coupons or hitting seasonal sales. When out shopping, if I saw a good deal on a toy or baby clothes, I bought a few to have as inventory for upcoming events. In the last six months, we saved over $300 by doing this, and many of these gifts were more appreciated than the default bottle of wine.
3. Too Many Shows, Too Little Time
With the dizzying array of cable packages and providers, it is hard to know if you are really saving. I took a long, hard look and realized I had at least 10 movie channels I hadn't watched in the last 12 months. And, if you have young kids, chances are your days of surfing premium channels to watch "Office Space" undisturbed for the fortieth time are long gone. It was time to take inventory of what I really needed and cut down. My plan was also up for renewal, and when I viewed my account online, I saw a $20 per month increase for the same stuff I currently had. This was not good.
Making Cable Worth It Again
I already had a combined package for my phone, Internet, and cable, so I was pleasantly surprised more savings could be had. First, instead of settling for what you may see online and giving up any previous promotions, investing the 10 minutes to call your provider directly can pay off. I called expecting a fight, but before I could even plead my case, the representative said there were special deals for those willing to renew for two more years. I was immediately given a renewal plan that included faster Internet and all of my existing features for $10 less per month. Once that was done, I cut out two premium channel lineups we never use, which saved another $30 per month.
The next time you are looking to tune up your budget, take a look at your non-essential spending and really think through where your money goes. My examples were very relevant for a family with a young child in the house, but everyone can attempt to cut down mystery spending. By identifying the common pitfalls and making some useful adjustments, you can save a bunch and still do the things you enjoy.
Have you uncovered any hidden spending habits? What did you do to spot them and correct them?