Financial blogger Liz Frugalwoods agrees with this approach. “A comprehensive monthly review can seem arduous,” says Frugalwoods, publisher of the blog Frugalwoods who has discussed these topics on The Today Show, Money.com, Forbes, and Business Insider. “But once you begin, you realize all the ways your money is drifting out of your pocket.”
So where are many common budget busters hiding? Here are some likely candidates and strategies for maximizing savings:
- Subscription services: “Many people subscribe to several streaming video services, yet find they mainly use only one,” says Berger. “Choose the one that provides the most value — you’ll likely not miss the others.”
Other candidates for elimination are internet cloud storage, digital photo hosting sites, and even credit-monitoring services. These are often under-used, easily forgotten and, in the case of photo hosting, offered free with other services you may be paying for, such as Amazon Prime.
“Any automatically renewed bill is an immediate danger area,” says Frugalwoods. “Magazines, periodicals, even gift subscriptions should be reviewed to see if you are still getting value from them.”
Don’t want to eliminate something entirely? Changing distribution channels or service levels may offer significant savings. Online periodical subscriptions, for example, are often far less expensive than the print rate. Cable and internet are two other areas where you can save money, often by negotiating a better deal with a simple call to customer service.
- Insurance: Comparison shopping on health, life, car, home, and auto can save hundreds of dollars annually. Most providers also offer discounts for combining coverage, leading to additional savings. If you find yourself not using your health insurance very often, consider whether a higher-deductible plan could save you money on monthly premiums, understanding you could end up paying more down the road if you do have an illness or accident.
- Debt: Review interest rates on any debt you may have. Berger says that in some cases it may be advantageous to refinance home or auto loans, consolidate and reduce your rate on student loans, or use 0% balance transfer options to help pay off credit card debt. “Reduce your rate with the one-time effort and save money year in and year out,” he says.
- Routine purchases: “Where, when, and how you shop make a big difference,” says Frugalwoods. Groceries, for example, are often an overlooked area for savings. Buying in bulk, talking advantage of loyalty cards, and saving on senior discount days all add up.
How to keep track
In order to analyze your spending habits and trends, Berger and Frugalwoods suggest using online expense tracking. Wells Fargo clients can use the tools available in My Money Map and there are several online options and software programs offering similar services. “This can be particularly helpful for a deeper look over time,” Berger says.
“The good thing about expense review,” Berger adds,” is that by identifying savings once, you can reap the benefits for months and years to come.”