By Nathan Liao, founder of CMA Exam Academy
In order to stay balanced and improve your overall well being, it is so important to make sure that you have a steady grasp on your finances. This means you need to strive to adhere to a set monthly budget that will cover all of your living expenses, including your mortgage payment or rent, other bills, food, utilities, etc. If you don’t plan your monthly budget and do what you can to stick to it, you can run into major financial issues that can cause a lot of stress and negatively impact your mental health.
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There are many often-overlooked ways that we chip away at our monthly budget. These costs can really add up and hurt your overall financial standing. Here are just a few ways that you are draining your monthly budget:
1 - Trying to Always Get Free Online Shipping
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If you love shopping for clothes and other goods online, you have likely been tempted by “Free Shipping Over $50” and other similar messages on retailers’ websites. Don’t buy into this sales ploy! Oftentimes, you will end up buying one extra item that ends up costing more than the actual shipping costs. Yes, it may be a small difference, but if you make multiple online purchases a month, the extra amounts that you spend on the items can really add up.
2 - Not Buying Family-Sized Items
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Every time you shop for packaged food and personal care items like shampoo and body wash, you should opt for the family-sized items. Do this even if there is just one or two people living in your household! The family-sized items will have less price per unit or serving, and the personal care products will last a lot longer. Also, every time you make a family-sized meal for yourself or one other person, you can save the leftovers for your lunch or dinner the next day, saving even more money!
3 - Not Buying Quality Items
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We are in an era of fast fashion and mass-produced household items. However, even though this means that many products are now much cheaper than they were before, they are not of the best quality. And if you are always buying cheap, lower quality clothes and other items, they may tear or break easily and you may have to buy replacement items on a regular basis. On the other hand, higher quality products will last much longer, preventing you from having to replace them. Constantly replacing items can really hurt your monthly budget.
4 - Keeping Monthly Subscriptions to Publications You No Longer Read
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Were you once an avid reader of a weekly celebrity & entertainment magazine, but you no longer have time to read the issues that arrive in your mailbox? Have you stopped reading an online newspaper that you have been subscribed to for years? Don’t let these subscriptions chip away at your monthly budget! Go through your monthly bank account statement and check to see which subscriptions to publications you can eliminate. This will free up more funds for groceries and other items that are necessities.
5 - Ordering Groceries to Be Delivered Rather Than Going to the Store
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We get it — sometimes the last thing you want to do after a long day of work or on the weekend when you finally have a free day is head over to the grocery store. However, if you constantly order your groceries to be delivered via apps like Instacart, those delivery fees and tips for the drivers can really add up (especially if you order groceries every week). That said, really make an effort to check your schedule at the beginning of every week and pick a set day and time to go to the store to buy your groceries. This will ensure it becomes more of a weekly task you already know you need to do and you won’t be tempted to place an order in an app.
6 - Ordering Meals to Be Delivered Rather Than Placing Pick-Up Orders
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We all love treating ourselves to nights of no cooking by ordering meals from our favorite restaurants. However, kind of going along with the last point, delivery fees and tips for drivers can really add up if you constantly order meals to be delivered. If you have the time and the food establishment isn’t too far from where you live, definitely opt for pick-up rather than delivery. On top of the significant amount of money you will save on your meal, you will have peace of mind in knowing that your food won’t be sitting in a car and getting cold and soggy because your delivery driver has to make other stops before yours!
7 - Opting for Ride-Sharing Apps Versus Bike- or Scooter-Sharing Programs for Local Travels
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How often do you order rides on Uber or Lyft when you are going somewhere just a mile or two away? Ride-sharing apps all have minimum fares that you must pay no matter how short your ride is — these fares can really add up each month, especially if you order during surge pricing! On the other hand, scooter- and bike-sharing programs like Bird and Jump are cheaper options. Lyft also allows users to reserve bikes and scooters! Their fees are much lower, you won’t ever deal with surge pricing, and some of them offer monthly subscriptions for unlimited rides under a certain time limit. Riding bikes and scooters is also a great way to get some fresh air!
8 - Always Being Hit With Bank and Credit Card Fees
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Life can get so busy sometimes, causing you to forget to regularly check your bank and credit card accounts. However, you need to make sure you always know how much is in your bank accounts so that you don’t accidentally make a purchase when you don’t have the available funds, leading to a costly and easily preventable overdraft fee. You also need to regularly determine if you have outstanding balances on your credit cards, as interest and other fees can really add up. That all said, make it a habit to check your bank and credit card statements at least once a week so that you know your financial standing.
9 - Still Paying for Subscriptions to Apps & Software You No Longer Use
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You may have subscribed to apps and other software platforms months ago, but you completely forgot about them or simply no longer use them. However, their charges will continue indefinitely until you cancel them! These fees can definitely add up and drain your monthly budget. To fix this, open your bank/credit card statements and check every line item, identifying which ones are recurring expenses. Put them in a spreadsheet and write their monthly amounts and purpose. This will enable you to see which app and software subscriptions you can eliminate.
10 - Paying for Multiple Entertainment Streaming Services When One Will Do
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Are you currently subscribed to Netflix, Hulu, Amazon TV, and other streaming services? Did you purchase a subscription to a particular streaming service just so you could watch a certain show that only they carry? These fees can negatively impact your monthly budget, so make a list of all of the streaming services you pay for and see if you can eliminate all but one of them. You may realize that you were still paying for a streaming service you haven’t used since finishing the show that was the only reason you subscribed to the platform in the first place.
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Being financially literate means adhering to the monthly budget that you set for yourself. If you are able to stick to this budget, you won’t ever have to worry about whether you have the funds to pay for your bills and other living expenses. This will help you feel much more stress-free and balanced each day. Thus, consider whether you engage in any of the above budget-draining behaviors and start making changes to live a more financially savvy lifestyle today!
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Nathan Liao is the founder of CMA Exam Academy, a top Certified Management Accountant exam review program. As a CMA and CMA coach, Nathan mentors accounting and finance professionals in over 80 countries to earn their CMA certification in as little as 8 months. The unique review framework in CMA Exam Academy has proven to be the key to his students’ outstanding success in attaining their dream of earning the Certified Management Accountant certification.