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5 Expenses That Are Killing Your Budget

When you’re on a budget you may be looking for ways to cut spending and save money. In my experience, there are 5 Major Expenses That Are Killing Your Budget! I know this, because they were killing mine!

Eating Out

Now this one might sting a little so brace yourself – your eating out habits are the BIGGEST budget killer.

I know, I know, you love food and I do too but unfortunately, all those bar tabs and trips out to a fancy dinner (even if it’s not so fancy) are killing your budget.

In 2015, the average amount Americans spent on restaurants and takeout was $3,008 for the year (or $250 a month). I am sure that number has grown since then too.

Now, that may not seem like a huge amount but when you realize that your $15 meal only cost about $5 to make and you’re paying 3x the amount, you could have saved that $2,000+ or used it towards debt. That reality then becomes a big deal.

Want to stick to a budget? Ditch eating out. And yes, those frequent stops to Starbucks for coffee, count too!

Credit Card Interest

Almost every single American has a credit card these days. Whether you use it regularly for purchases, use them to lower debt payments, or just keep one for emergencies, credit cards are a major budget killer.

According to statistics, by the end of 2017, the average American racked up an average debt of $6,354 on their credit cards.

Of those credit card users, 43% of credit card users carry a balance each month which means they are paying interest on that balance. The average American will pay $1,183 in credit card interest and that is a major problem for someone who is on a budget.

Moral of the story: get rid of your credit cards and transfer balances to a 0% interest card and pay it off as soon as possible (at least before the interest introductory rate has expired).

App Subscriptions

Again, don’t hate me – but you know all those amazing apps that do all sorts of amazing things from your phone? Yeah, they are killing your wealth.

If you have an iPhone like I do, you probably see small charges come through your bank account at different times throughout the month. The Apple receipts look like this:

Now, if you notice, the “description” of what the charge is, is blank.

So, if I didn’t have a budget (and I do) I wouldn’t know what that charge was for.

I can almost guarantee you, you have several of these charges that come through each month that you either don’t know what they are for, or you no longer need.

Simply put: go through all of your apps and app subscriptions and delete and unsubscribe to any subscriptions you no longer need. Your budget will thank you.

Fluctuating Utility Bills

There isn’t much we can do about utility bills because you either pay them or live like an Amish community.

The challenge is, these are typically bills that fluctuate in costs depending on a variety of factors including how much you use your heating and cooling units, how many times you need to wash laundry, and even how often you clean your dishes.

These fluctuation in costs can make budgeting hard and leave you overspending month-to-month.

My best tip and solution for this: call your utility companies and get on a budget plan!

What is a utility budget plan?

A utility budget plan is an equal amount you pay monthly to your utility company. The monthly rate is typically set on the amount of energy used over the last 12 months and then split into 12 equal payments.

For example, we are on a budget plan with our gas company. We pay a flat rate of $69.00 per month no matter how much energy we use. In the summer months we tend to only use around $20 worth but in the winter months, we use around $100 worth. So, the plan is designed so we pay a set rate every month and on months we go under, we get a credit on our account. For the months we go over, we use some of our credit to help pay the balance down. Over a year’s time, it pretty much balances itself out but it allows us to stay within our budget each month.

Paying Bills Late

You know how your Zodiac signs and horoscope readings said you’d win the lottery this month so you decide to not pay your bills on time “just in case”?

Well, that isn’t working in your favor either.

Paying bills late accumulate late-fees on top of additional interest and those can be major budget killers.

You can do two things in this situation:

  1. Pay your bills on time.
  2. Call and discuss your payment options including extension of your payments to avoid late fees.

I can tell you from experience, almost all companies are willing to work with you if you call and explain your situation. Often times, companies will work with you to lower your payment, interest rate and even change your due date to allow you extra time to pay your bill.

Trust me, asking never hurt anyone!

While I know there are a ton of ways you can make or break your budget, these are the top things I have found over the years that have killed my budget. Things that you may not think about but I surely hope now that you know, you’ll take steps to avoid sabotaging your budget and be one step closer to financial freedom.