The new year can be prime time to review your spending and zero in on a year's worth of pervasive money leaks — you know, those areas where dollars seemingly seep out of your budget, much the way water drips from a leaky faucet.
And before you know it, a good chunk of money has gone down the drain.
Some of the leaks are easy to pinpoint: Was your electric bill in 2014 higher than 2013's? Dial down your thermostat a few degrees. Credit card interest go up a few percentage points? It's time to call your credit card issuer to request a lower APR.
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Other money leaks may be harder to suss out, often because they happen inadvertently when you're trying to catch a deal.
They can strike when you're at the register, getting tempted by a half-off impulse buy. Or when you shell out for a service or membership that you think you're totally going to use — only to discover that you haven't thought about it in months.
Here's an actionable game plan that will show you how to save money in 2015 by plugging some of the biggest (and sneakiest) money leak offenders.
Money leak #1: Gratuitous digital subscriptions
One of the first places people tend to look for cost savings is the much-maligned cable bill. And while it's certainly reasonable to cut the cord if you're only watching, say, 15 of the 500 channels you pay for, cable isn't the only culprit of wasted subscription spending.
In fact, all of those smaller online services you subscribe to — think Amazon Prime and Spotify — can add up, and quickly surpass your cable bill in price.
By one estimate, the common digital services that the average person subscribes to — including dating sites, e-books, music services, gaming sites, and online newspaper subscriptions — add up to about $156. That's over $40 more than the average cable bill of $112 a month.
Plugging it: One reason we might overlook such subscriptions is because their smaller fees, usually the equivalent of a lunch out or a cocktail at happy hour, may not feel like they'll have a big impact — at least not on a monthly basis.
"I find it helpful to calculate how much you pay per year," says Miranda Reiter, a CFP® and founder of She & Money Financial Planning. "Paying $15 per month for a service may not raise any red flags, but $180 per year might give you a good reason to halt the service."
So Reiter suggests taking five minutes to measure your digital service usage each month. "If you notice that you are consistently not getting your money's worth, think about why, and if the next month will be any different," she says. "If not, it's probably time to cancel."
Just keep in mind that a subscription may be worth keeping if it allows you to get rid of another cost completely. For example, if getting a standalone HBO GO subscription once it's available next year (the rumored price is about $15 a month) means you can nix your much more expensive premium cable package that includes HBO (which you only got for Game of Thrones, anyway), then you'll be netting a sizable cost savings.
Money leak #2: Unlimited memberships
You can buy an unlimited membership for just about any product or service nowadays: going to the gym, getting your car washed, catching the latest release at the movie theater. You name it, and there's a way to get a better deal. So why should you pay à la carte when, for a little bit more, you can get an all-you-can eat/buy/download/workout deal?
But the perceived value of an unlimited membership is often different from reality. One study of gym goers found that those who chose a flat membership of about $70 per month, instead of paying $10 per class, only hit the gym an average of 4.3 times per month — which ultimately meant they paid about $17 per class.
Plugging it: "I find that some people hang on to these types of memberships even when they aren't using them, particularly fitness memberships, because they hope to actually start taking advantage of them at some point," Reiter says. "But the truth is that an entire year could pass without using your membership, costing you hundreds. So determine if it is the right thing for you right now."
This means calculating how many times you'd need to take advantage of the membership in order for the fee to pay off, says Reiter. In the process, you may find that the à la carte option, or perhaps a month-to-month membership with no termination fees, provides better bang for your buck. The participants in the gym study, for instance, ended up wasting an average of $600 over the course of their membership.
Better yet, look into free or lower-cost alternatives for the services, such as a free fitness app — like Nike Training Club — that can still give you the workout (and motivational boost) you need.
Money leak #3: Free trial offers
Most of us know better than to accept a free trial of the latest herbal weight loss supplement or an experimental tooth-whitening product. But many perfectly legitimate businesses also let you try before you buy in the hopes of ferreting out would-be loyal customers — magazine publishers, satellite radio services, and career sites like LinkedIn, to name a few.
So why not take advantage of a "no commitment necessary" offer?
Here's the rub: If you don't consider the service worth it, it can be easy to forget to cancel before the fee kicks in — or you may find that the company tries to stall you by making it too hard to cancel.
Plugging it: Judith A. McGee, a CFP® and C.E.O. of McGee Wealth Management, says to look for one telling sign that your free trial will be costing you. "If you enter your credit card information [to redeem the trial], you're more likely than not to get a bill," she says.
Another "buyer beware" signal? The company makes it near impossible to get rid of the service. If you can't simply hit "cancel" somewhere in your account settings area, there's probably a reason why — the longer it takes you to figure out their system, the more likely they'll be able to squeeze another month out of you.
"Calling [the company] can be a big ordeal and not necessarily something you can do during work hours," says personal finance blogger and money coach Zina Kumok. "I recommend using gethuman.com to find the best number for customer service — they even tell you which numbers to press to automatically get through to a real person."
And if that doesn't work, you can always try to virtually log your complaint in 140 characters or less. "Using social media can pressure a company to respond to you quickly," Kumok adds.
Money leak #4: Deals with a shelf life
How many times have you looked at a "get $50 worth of [fill in the blank] for $25" deal you bought and thought: This expires tomorrow — and I'm not going to use it in time!
If you've experienced that stomach-sinking feeling that comes from realizing you've paid $25 for an expired coupon, you're not alone. It happens increasingly often seeing as today-only deals and get-'em-while-they're-hot rewards are constantly being dangled in front of us, prompting us to open our wallets more often than we should, just to take advantage of the deal.
"Limited-time offers featuring 50 percent to 60 percent savings are very tempting, but they're also big money leaks because many of these purchased deals go unused," says consumer savings expert Andrea Woroch. "With expiration dates, blackout times, limitations on dates for redemption, and inconvenient locations, you may end up with deals you can't use — although the money you spent on the voucher never expires."
Plugging it: There has been some consumer noise raised over such offers, and in 2012 Groupon had to pay out $8.5 million to settle a class-action lawsuit brought on by consumers disgruntled about coupon expiration dates. But apart from suing, what can you do to help make sure you don't fall into the expiration trap?
For starters, if you use a deals site where you keep your credit card information stored, remove the info to lower the convenience factor for yourself. "The time it takes to get your credit card and [input the info] will give you time to rethink the purchase," Woroch suggests. "Many people often press purchase before thinking it through."
If you want to remove the temptation for an impulse buy altogether, unsubscribe from the emails completely. But if you have a coupon you already bought and want to unload, Woroch suggests selling unwanted and unused daily deals atcouprecoup.com, so you can at least try to get some of your money back.
Money leak #5: Shipping fees
While you may view shipping fees as a necessary cost to swallow for the convenience of online shopping, companies are using it as a strategy for getting you to fill that virtual shopping cart.
"Recently, retailers have increased their free shipping offers to boost online sales," Woroch says. "Best Buy Co., for instance, raised the free shipping minimum from $25 to $35 knowing that people are likely to add more to their carts to get free delivery."
Which means you're left between a rock and a hard place: Shell out for shipping, or shell out for more stuff?
Plugging it: Of course you can always commit to shopping only at retailers that always offer a free shipping option — like Nordstrom, Zappos, and Target — but there will likely be times when that size 14 shoe can't be found just anywhere.
When that happens, Woroch likes to look for free shipping codes at sites like CouponSherpa.com and FreeShipping.org. But if you still can't find what you want, call or open a live chat with a customer service rep to inquire what offers may be available — they'd probably rather throw you a bone than lose what's in your cart.
"They may even be willing to waive the shipping fee," she says. "I've had luck getting free shipping by calling customer service at LOFT, Ann Taylor, and West Elm."
The other option? Eschew the shipping altogether and arrange for convenient and free in-store pickup. Bonus: You may even get your items faster this way, since many offer same-day delivery. Kmart and Sears even offer free cross-store pickup, so you can order through Sears.com but have it picked up at Kmart, and vice versa.
One other note on free shipping: Always read the store's shipping policies because free may not necessarily go both ways — you may get charged for return shipping or a restocking fee. If they do charge a return fee, "make sure there is a local brick-and-mortar store nearby that accepts online returns," Woroch suggests.
Bottom line? "It's easy to overlook the impact of an extra $5, $10 or $20 here and there," Woroch says. "But when you add up all of those daily, weekly and monthly impulse purchases, you'll find a huge money leak — maybe hundreds of dollars a month, in some cases."
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