A Leaky Budget

pipe-159671_640A “leak” is defined as something escaping through a hole. So a budget leak means you have money escaping through a hole in your budget.
A budget leak can have many sources. It’s spending money on the same things over and over again without even thinking about how or why you are spending that way. It might be any money spent on things you don’t really need with no conscious thought. It could also be increased costs on items bought regularly.

Finding and plugging those budget leaks is part of being a good steward. Luke 16:11 tells us “If you have not been faithful in the use of worldly wealth, who will entrust you with true riches?” Spending money responsibly helps you be faithful in using worldly wealth. Today I’ll share some ideas about finding and plugging budget leaks.

We were on a discounted cell phone plan which expired in January. The February bill was quite a shocker as the bottom line increased over $50. We made a visit to our cell phone provider who reduced the fee immediately. It would have been easy to shrug our shoulders and just figure that the increase was part of doing business but by being proactive we were able to save $50/month which adds up to $600/year–not a drop in the bucket!!

If your phone bill has increased recently, talk to your provider and ask for a better rate, especially if you have been a good customer. If possible, switch to a lower-cost plan or even a cheaper service provider. Cellphone service is a competitive market with lots of options so be sure to explore all options available to you.

We live in Florida and the drafty windows and attic insulation are just as much a problem here as they are in areas further north. Most of the homes in our area use a heat pump, which does not blow warm air, so any air leaks and drafts seem to magnify the already cool air in the house during the winter. A few years ago, we replaced the single pane windows with double pane windows and also had more insulation blown into the attic. While it wasn’t cheap, we estimate that our electric bills have decreased by 15-25%. More money that’s not leaking out of the budget.

Creeping prices are another area where money leaks. One of the benefits of using a budget is that you have historic information on prices you pay for services, such as lawn care, the bug guy, or haircuts. As you monitor these costs it allows you to see where prices have increased substantially over a short period of time. When we did our last budget review we noticed that the prices for my haircut had increased substantially over the last 18 months. Time to find a new hairdresser because the prices have increased beyond what I choose to pay for that service.

Expensive name brand products are another way money disappears. Many generic brands are every bit as good as the name brands. If you are thinking of trying the generics, compare the labels before making your final decision just to see if there is a significant difference in ingredients. If I want to try a generic brand, I’ll buy the smallest size possible and try it for a few days before making a decision to buy the larger size. Many times a blind test reveals there is not a difference, but when we look at the name brand labels, we perceive a quality difference which may or may not exist. If you are going to stick with name brand products, know the target price you are willing to pay, use coupons and only buy them when they are on sale.

The next budget leak we are going to tackle is cable TV. We are defining the specific shows we enjoy watching, then looking for the various ways we can access them to figure out which services provide what we watch at the lowest price. The cable bill has risen astronomically so we are using the free one-month trial subscriptions to various streaming services to figure out which is right for us. It is definitely time to cut the cord on cable TV!

I love to read and it’s far too easy for me to spend money on books, even if I shop at the used bookstore. I know I can borrow free books at the library, but getting there is another matter. Plus, with all the ministry travel we do, I find it easier to read on my tablet rather than lugging around books. BookBub is a new site I discovered that sends out daily email with books that are free or less than $2.99. When you signup, you can choose the types of books (historical, fiction, Christian, etc.) and the authors you prefer. Then you will get a daily email listing the free or discounted books that meet your selection criteria. I’ve enjoyed this service because it’s given me access to free books by new authors as well as authors I already prefer. And since I only download the free books, I don’t waste money if I choose an eBook, then decide to delete it after reading a few pages.

Paying bank fees is another huge budget leak. Many banks offer free services based on direct deposit or having a specific amount in your savings account. Search the internet for banks near your home or office to determine if their free account offerings suit your banking style. Stick with in-network ATMs or get cash when you use your debit card at the grocery checkout. And a HUGE leak is paying overdraft fees. Account fees range between $7-$25 per month and overdraft fees range between $35-$71 per overdraft. If you are paying these fees you can stop a huge leak by analyzing your banking charges and doing everything you can cut the fees. I know we’ve saved hundreds of dollars by never overdrawing and not paying monthly account fees.

Food and drinks are another area where money can trickle through your fingers at an alarming rate. I don’t really enjoy cooking so it’s easy to justify takeout on those days when we are busy. However, by looking at the calendar each week and figuring out which days are likely to be busy, I can plan ahead and make meals that create leftovers to be used on the nights I know I won’t feel like cooking.
We know a couple where the wife is addicted to fancy coffee. She gets one everyday on the way to work, and on the weekends her husband goes to the coffee shop for her. She always gets the largest size, which costs about $5.00. That’s $35/week; $140/month and $1,820/year. Making coffee at home is considerably cheaper!

Paying attention to what, when, why and how much you spend allows you to plug those pesky budget leaks before they become full scale gushers.

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