Financial Fitness

Smart Strategies for Combating Hidden Budget Busters

Scrutinizing spending patterns, requesting discounts, and consolidating services may help reduce recurring expenditures.

by Michael J. Solender - January 09, 2017

Pop quiz: How much are you paying per month for your TV service? How many monthly payments for services like a gym membership or video-on-demand are coming out of your checking account every month?

If you’re not sure and you’re not taking a close look at your statement every month, you may find there are more items than you thought — and they’re costing you more than you imagined. It’s easy to overlook recurring expenses that you no longer need or that can be reduced based on life changes. For example, if your kids are now grown and living on their own, do you still need your house cleaned once a week? Or perhaps that great introductory rate on your internet service has expired and now you’re paying double the price without even realizing it.

Combating such hidden budget busters begins with a review and assessment of your current financial situation.

Routine spending audit

“Conducting a spending audit at least once, preferably twice per year, and evaluating monthly expenditures can be revealing,” says Rob Berger, founder and publisher of Dough Roller, a personal finance blog. Even expenses that are small individually can add up. If your TV, internet, and phone service have all increased by $20 a month, and you have a few services you’re paying for but not using, you could easily be looking at a few hundred dollars per month that could be used elsewhere in your budget.

Berger suggests an initial focus on routine monthly expenses, including mortgage, utilities, insurances, car payments, and debt service as well as subscription services such as phone, cable, and periodicals. “Ask yourself: Do I still need this? Am I using what I’m paying for?”

“A comprehensive monthly review can seem arduous, but once you begin, you realize all the ways your money is drifting out of your pocket.”

— Liz Frugalwoods, financial blogger

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,, 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.”

Michael J. Solender is a freelance writer who covers business, travel, and pop culture.

Image by iStock

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