Start Saving Money Today–Avoid The Five Biggest Money Wasters!

 

What's Emptying YOUR Wallet?

Several years ago I clicked on a link about wasting money. On the list were several items that seemed very subjective, such as owning of houseplants, or reading magazines. I started searching for more such lists, and found that they all had subjective items on them. No one suggested that having children should be on the list, but some did list pets. The one thing all of these subjective items had in common was that each of them had some intrinsic value. And to the person who values an item it is not a money waster. The other thing about these list was that none of them caught ALL of the real money-wasters. You know, the things that nobody could possibly value. The financial losses that have no bright side. So, here is my list of the true money wasters.

  • Fees or fines for things that are avoidable. This includes parking tickets, tow-away charges, moving violations, and anything else where you run afoul of the law and have to pay when you get caught. What can you do about it? Park somewhere legal, leave earlier, stay sober or find another way home, and obey all traffic laws. It may be inconvenient sometimes, but not as much as paying a big fine or worse.
  • Unused memberships. The biggest offender is the gym membership, but there are others. Are you paying for an online subscription or premium service? You might be paying and not be aware of it, as in the case of 3rd party billing for “premium downloads” that can attach to your cell phone bill without you even being aware of it. To avoid this money drain, take a look at all the things you pay for automatically. Look closely at all your bills to make sure you don’t miss anything. If you aren’t using it, get rid of it. And next time you are tempted to join or subscribe to anything that costs money, think twice. Ask yourself if you have a bad track record. When and how will this new activity fit into your life? Can’t figure it out? Don’t do it!
  • Bank overdraft charges. I am not referring here to charges just to keep an account, though you probably can find a free one if you look. I am talking about what they charge when you write a check you shouldn’t. This may also apply to using your debit or credit card when the money isn’t there as well, though many states now have laws which force the bank to simply decline the card if there are insufficient funds, instead of paying the item and charging you an over-draft fee. To avoid paying any overdraft fees, set up overdraft protection with the bank or simply never go over what you actually have available. It might be a good idea to leave a small cushion just to make sure.
  •  Late fees. If you have any control at all over your cash flow you can avoid late fees. The problem may be that you procrastinate. Procrastination is fine in some situations, but not when it’s costing you. On the other hand, you may be late because you income has dropped. If it is in your monthly budget you should be able to pay for it. If you can’t then you must get rid of it. It may not seem fair. It probably isn’t. But this is the system we live with. If you have experienced a downturn in your financial situation you may start with a pile of bills and get rid of the services one by one. First the premium satellite for your TV, then the memberships to things, all the way down to the car if need be. If you know the difference between a need and a want you’ll know what to do.
  • Disorganization. This causes waste in many ways. It may be buying duplicates of things because you can’t find the first one. It may be massive food waste because you can’t tell what is in your refrigerator and cupboards. It could be paying higher prices because you don’t plan ahead. The only solution is to do an honest evaluation. If you know you are wasting money and overspending because you are disorganized, sit down and think about it. Are there areas where you are doing fine and others where you are suffering from disorganization? Or are you pretty much a mess across the board? Either way, start by trying to get a good friend to help you work on it. It may take a professional organizer in the end if your issue is severe. Just start today if this is you.

There are other behaviors that contribute to wasting money, but these five are the most common offenders. The good news is that all of them are fixable. Just think what you could do with the money you save.

Basic Frugal Tools—Tracking What You Have

Track Your Money

Why Track?

Tracking your material possessions, and most importantly your cash flow, is one of the basic principles of a frugal life. It is what a scale is to weight loss. How can you know what you are doing if you have no tracking system? Lack of a good tracking system is what causes fees such as overdrafts to accrue. If you don’t know what is really in your account this is not surprising. It is also what causes shortfalls in the face of normal expenses.

Why Doesn’t Everyone Do This?

The main reason people fail to track their cash flow is the tediousness of the process, and the rush of life in the modern world. There is no tracking system that doesn’t require a little extra effort every time you take in money in any form, and every time you spend money in any form. It also requires saving receipts.

How to Track

That being said, there are many ways to track your cash. If you are faithful in your record-keeping and the method suits the complexity of your life, it doesn’t matter which you use. If you have a simple situation you can use a little notebook that you carry with you everywhere. If you spend, you write it down. If you get paid, you write it down. For a simple all cash system, this will work.

Next in complexity is using a bank debit card and cash. I favor this method because under the new rules debit card can’t be overdrawn, and they don’t bounce. Keep a sharp eye on the online bank statement, which should reflect your cash flow accurately. And use the notebook for tracking cash. Why? Because little cash expenditures can create a real leak over time.

For the more complex set-up or the more technically savvy amongst us, the Quick Books program provides a great tracking system. If you are running one or more businesses, this is for you. Just set up another company called Me Inc. or something like that. Take a few moments each day to input the day’s transactions.  You must still write down cash transactions as they occur, or get a receipt for each one.  That is the only way to handle cash.

Cash Flow Management

Tracking is just the first step. Planning for upcoming expenses takes further effort. But tracking is an essential first step. Even if your flow is so small right now you could do it in your head, writing it down is a good habit to develop. And if the shortfalls are caused by lack of income, rather than lack of tracking and planning, at least you will know exactly what you need to make it through.

Here is a  helpful link:

http://quickbooks.intuit.com/  Quickbooks

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