It’s not easy to keep track of where your money is going each month, though a budget is a great place to start.
Still, if you want to regain any sort of financial freedom and start saving for future goals – remember retirement – you’ll need to stop blowing through your paycheck.
Here are five sneaky ways your money is leaving before you even have a chance to use it.
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Many banks charge a monthly or yearly “maintenance fee” that can cost you upwards of $25 per month, or $300 per year. Read the fine print associated with your bank account and find out if there are ways you can avoid a maintenance fee.
If you can’t, switch to an account without one.
Last year, new cars averaged a price of $31,831, according to TrueCar, an automotive pricing website. That means, depending on your interest rate and loan term, you could end up shelling out $500 or more a month in car payments – a huge chunk of your paycheck.
Used cars, on the other hand, averaged $16,335, cutting your monthly payment almost in half. If you have a high-interest rate auto loan, you can also try to refinance for a lower interest rate or trade your car in for a cheaper model.
Coupon sites like Groupon and LivingSocial are great resources for finding deals and discounts on products, services and experiences. But these deals are only worth it if you would have bought the service anyway.
A 2013 North American Technographics survey found that the average Groupon user spends about $675 online within three months – compared to just $467 spent by the average consumer.
Since you pay for the coupon up front, it’s up to you to follow through and use it. Unused coupons eventually expire and become difficult to redeem, which means you forked over a big portion of your earnings and didn’t actually save any money.
That fancy new iPhone 6 you just bought set you back by hundreds of dollars – and upfront costs aside, you’ll also be making monthly payments that could range anywhere between $40 or $50 and hundreds of dollars. Unless you realistically and regularly use 128 GB of space and 10 GB of data, you’re overpaying for your phone and phone plan.
Alternative carriers like Republic Wireless will sell you phones and service plans for a lot less. And if you’re willing to part from the latest Apple product, you’ll save even more by choosing a cheaper (if slightly less flashy) phone.
It’s important to start saving for retirement now – and you should try to set aside as much savings as possible. Still, it doesn’t make sense to put aside so much that you’re going into debt or overdrawing your checking account in order to make ends meet at the end of the month.
Sit down, write out your budget and find the perfect number to contribute to your retirement accounts each month.
If your employer matches a certain amount (say 3 or 4 percent), you should aim to contribute at least that much – you don’t want to be leaving money on the table.
Keep in mind that your retirement savings should always be a priority; if you’re having trouble padding your 401(k) while still buying groceries, it might be a sign you need to cut down in other areas of your budget – specifically, “wants,” like dining out or going shopping.