Culture

Where to Start When Your Financial Ship Is Sinking

leaky_boat

It wasn’t until the last perfect storm hit, and our financial ship began to take on water, that I started looking for leaks.

In general, I consider myself a fairly frugal woman. So you can imagine my surprise this week, when I discovered how much money has trickled out with little notice or concern.

With a critical eye, I began to go over all our expenses using online banking. When I did, it became clear that many seemingly small amounts of automatic debits were draining us a few dollars at a time.  The amount of those little debits here and there was significant enough that I really should have done this a long time ago.

At first, I thought I needed to create my new budget. However, it quickly became obvious that cutting costs had to come first if the new budget would be realistic.

So, I spent the week plugging dollar-size holes.

Stopped Automatic Withdrawals:

To pinpoint any recurring debits, I pulled up our online statement and located the leak in the description line, then sifted out the phone number. It’s usually found in the line of bank codes. Then I simply called each number and had the withdraw stopped. A couple of places tried to offer me better prices; my standard reply: “Tempting, but no thank you.” The effort ended in a total savings of over $130.00. A little here and a little there really added up to a major hole in my budget.

Cut All Non-Essentials

Our security system company (ADT) wins high marks for customer service. When I called to cancel, they gave me the next three months free. The reason was to allow me to finish out my contract without a penalty and retain the deduction on our home insurance premium.

Cutting the cable put $125.00 back into our pocket. I loved having my news channels, but in reality, that’s all we ever really watched. Last Christmas I bought my husband Apple TV. It’s a one-time expense, and it basically turns our television into a computer screen. Granted, there are a lot of opportunities to spend money on entertainment like downloading movies and music, but the free choices are there as well.

We signed up for Redbox text messages. With that we now get one free movie each, and a half-price deal every month. So that’s the new budget for movies. It’s actually nice to wait for the movie we really want to see, rather than just pick one simply because we haven’t thought of something better to do.

Examine All Basic Living Expenses

Phone

I changed our phone plan and cut the phone bill by over $100.00 and disconnected the landline. “Unlimited” anything always carries a higher price, so now we have to limit ourselves again. It’s a good thing.

Home and Auto Insurance

As a general rule, every year I go over my insurance policies and make sure they still fit our needs and budget. This year, I shopped around for other companies. Last year I lowered my house payment by $30.00 by adjusting our deduction and refining what we really needed.

It came down to a choice between State Farm (our current insurance) and USAA. State Farm had the best price as far as home insurance went — at least with our higher deductible. But they were quite a bit higher on the car insurance. In all, we will save $50.00 a month by switching to USAA.

Also, State Farm did offer to lower our monthly premium by $20.00 just because my husband is no longer driving to and from work.

Many companies do have a “customer retention” department. Had I only wanted to trim my budget, I could have lowered my costs considerably just by speaking with them. However, we are in ruthless cutting mode.

This week I’ve stopped over $300.00 from quietly leaking out of our account each month.

What is the biggest money leak you’ve ever plugged?