6 Simple and Sometimes Sneaky Money Drains to Avoid

Money drains to avoid

Consumers should watch for simple and sometimes sneaky money drains.

Everyone is looking for ways to save, but finding relatively painless ways to trim spending can be difficult.

One way is to step back and look for common and sometimes hidden fees, charges and expenses that zap your budget without raising red flags. Here’s a look at six common money drains that can deplete your bank account without much fanfare:

Buying New

If you’re looking for a vehicle on a budget, one of the biggest money drains out there is buying new. New cars, which are infamous for their immediate, “off the lot” depreciation can fall in value as much as 20 percent in the first year alone.

Although used cars and their dealers don’t always engender a sterling reputation, the industry has improved dramatically with the introduction of things like Carfax and certified pre-owned dealer vehicles.

Carrying Credit Card Balances

Carrying debt unnecessarily and only paying the minimum balance on your credit cards can drain your bank account faster than anything out there.

You’re only racking up needless interest if you hold on to a balance when you don’t have to. Rather than paying the minimum, pay as much as your budget allows. Failure to keep balances below 30 percent of the credit limit can wreck your credit score.

ATM Fees

You might be missing some ATM fees. Some banks will attach fees to your checking account if you aren’t maintaining a certain balance or using your ATM card a certain number of times per month. Sit down with someone from your bank and ask about the rules and stipulations on your personal account to avoid paying any fees unnecessarily.

Smoking

Health professionals have drilled the harmful effects of smoking into our brains for years. Everyone is familiar with smoking as a cause of cancer, high blood pressure, heart disease and other serious medical issues. But smoking also takes a toll on your wallet. With the average pack of cigarettes at more than $5, a pack-a-day smoker can easily spend nearly $2,000 a year. Despite the daily costs of smoking, many health experts agree that a single pack of cigarettes can cost up to three times as much in medical costs down the road, making quitting smoking one of the smartest financial and health decisions out there.

Cable & Satellite

Customers are paying an average of almost $100 a month for digital cable services and many are paying much more for a full channel listing. The cost of television service seems to be rising every year and many of the special offers apply to first-time customers only. Completely cutting your television service may not seem like a viable option, but stripping your service down to the basic model can save you a bundle. Consider replacing your expensive movie channels with Netflix or Hulu Plus, which cost about $8 a month.

Refinance Your Mortgage

If you purchased your home a few years ago, one of your biggest money drains may be a high interest rate and corresponding high monthly mortgage payment. Qualified service members can consider refinancing their current VA loan or into a VA loan to capitalize on recently low interest rates.

Photo thanks to Images_of_Money under a Creative Commons license on Flickr.