Find Your Hidden Savings: Take a Close Look at Your Spending
A Coffee Here, an Extra Cell Phone Charge There, and It All Adds Up Quickly
Where is your money going?
It sounds like a simple question.
But the fact is, many people don't really know the answer. It's important to know where you stand in terms of your overall financial picture, from your credit health to what you are spending on a day-to-day basis and even saving for those long term goals like retirement. (If you don't know exactly how much money you're spending each month on bills and expenses, read Living on a Budget). Once you know the answer, you can pinpoint the surprising places you may be spending more than you realize. Then you can make changes to increase your savings and create a cushion that can help you avoid overdrafts.
Uncover the hidden savings in your monthly habits
Spending a little time now could help you spend a lot less money this year. So grab a pen and paper, answer these simple questions, and get ready for some surprising insights. Also, be sure to download our Cut Your Monthly Expenses (PDF) worksheet to help you identify even more areas you may be able to cut some of your monthly expenses:
1. How often do you eat dinner out each week? Once, twice, more? What about takeout meals? Think about how much each dinner out costs you, and whether you could eliminate even one of those weekly expenses. If you saved $40 a week with this one simple change, you'd have saved more than $2,000 in a year.
2. Do you have a daily ritual, like grabbing a mid-afternoon coffee or a snack on the way home? This one can really throw off your budget, because it's a habit you might not think about. $2 here and $3 there might not get your attention. But those extra purchases add up to more than $700 a year. Even if you don't give up those treats completely, cutting costs in half would allow you to save $350 a year.
3. Let's undo lunch. How many lunches out could you be brown bagging instead? Next time you're at the grocery store, pick out some things for lunch or bring leftovers from last night's dinner. Packing a lunch takes just a few minutes and costs about one-third as much as eating out. If you take your lunch just 3 days a week, you could save over $1,000 (assuming you spend $7 a day on lunch).
4. Are you using all the minutes on your cell phone plan? Many people don't review their usage and end up paying for more than they need. Make sure you review your contract once a year to see if you can get a better price on a similar plan. If you are always on the go and don't use your landline, consider canceling your service. And if you don't use your cell phone that often, consider a pre-paid cell phone plan so you pay only for what you use.
5. Could you get your household groceries for less? It's so tempting to do what's most convenient. We go to the closest grocery store, even if it's more expensive than the one a few miles away. Or we don't keep an eye out for sale items. Grocery shopping is a frequent activity so it's a good place to establish good habits. Trim your grocery costs by shopping with a list, checking for sales, using coupons and buying in bulk.
6. Do you own a home? Think about refinancing. If you can refinance and cut your interest rate, you may be able to lower your monthly payments. You might also save thousands on interest over the life of your loan. Talk to a Chase Mortgage Consultant to see if refinancing is right for you.
Tracking your spending and looking for ways to spend wisely helps you save more money with less effort. Don't forget to make handy tools, like your credit card statement, work for you. It can serve as a a quick review of how you've spent your money, giving you insight into your own spending & saving behavior month-over-month. The goal is to build a buffer in your checking account that makes you better prepared for unexpected expenses, and helps you avoid mistakes, overdrafts and fees.
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