What Are Your Money Leaks?

by golbguru on August 29, 2007

Earlier on this blog, I have actively supported the concept of assigning higher priorities to bigger expenses in your life to improve your financial situation. However, every now and then, it helps to look at the smaller things that might be steadily leaking money from your wallet.

Occasional indulgences are perfectly fine, but if you are habitually spending money on certain items, then some financial plumbing might be in order. The point is to either seal the leaks completely, or to keep them in check so that, eventually, they don’t grow into massive drains on your resources.

Some typical popular sources of money leaks are as follows:

  • Paying for cable - in spite of the fact that you don’t regularly watch more than a few channels and don’t even have enough time to watch TV.
  • *Addiction* to certain foods/drinks.
  • The habit of not shutting off electronic equipment after use.
  • Making only the minimum payments on credit card balances (other than 0% APR balances).
  • Making payments on small low interest loans first, instead of large high interest loans (yes, it may be psychologically satisfying - Dave Ramsey style - but it’s still a money leak).

And so on… you get the idea by now.

Fortunately, because of our lifestyle, serious money leaks like expensive cable and debt do not exist. However, there are other small spending irritants that I am dealing with. Here is a list of some of them (that I have identified as of yet):

books money leak

1. Books: Yes, we have a massive library available to us on campus, but we still head down to book stores (usually Half Price Books) every once in a while and browse through a lot of books. Most of the times we end up purchasing a few books we like. They are usually cheap enough so that we can afford them (or at least that is our perception), but they are really not *necessary*. Usually, it ends up like this: “Wow, this book is awesome, I want it” - and the thoughts of checking it up in the library, or trying to see if I can get it cheaper online just vanish. :)

Current fix: Avoid visiting book stores.

diecast-vehicles money

2. Diecast vehicles: This issue has been existing since more than 20 years - I think it’s been hard-wired in me by now. I just can’t take my eyes off good quality diecast vehicles. Cars, motorcycles, tractors, aircrafts - you name it and I have bought it. Usually, they are not very expensive, but at times, good ones cost more than a few decent dinners.

Current fix: Avoid stepping into shops that sell diecast vehicles. The other indirect fix I am working on is to get my wife to shorten her shopping time for clothes (too much time in a clothing shop makes my mind wander in the direction of diecast vehicles).

chocolates

3. Chocolates: These are evil - especially the miniature ones. I devour them like some people eat peanuts. Generally, they never make it to our shopping lists but, in spite of that, I often find myself in front of the chocolate aisle, drooling over the “rich dark” variety of chocolates.

Current fix: Again, avoidance rules. Another great idea that’s working right now is to keep the chocolates out of sight after we buy them. We store them in a drawer at the bottom of our refrigerator. The extra work of opening the refrigerator and then opening and closing the drawer has reduced my consumption rate, so now they last longer - discourages additional purchases.

Library fines4. Library fines: Great, I spend on books … and I also spend on library late fees on borrowed books! The real culprit here is procrastination, but I prefer to blame it on the geographical positioning of our school library - it takes me a good 20~30 minutes of walking time to just return a book (I haven’t given a lamer excuse in a long time). Also, our library charges fines by the minute on certain issues and that doesn’t help me much. Here is a screenshot of the late fee schedule:

library fine details

Current fix: I will try and stop procrastinating… in a few days.. or months.. sometime. :(

landline phone5. DSL + Landline Phone: This is a bit mindless. We need high speed internet access (else, I cannot really work on this blog from home) and the cheapest option is DSL. The problem is we need to carry a useless landline to get DSL connection and that really raises the cost by almost 100%. The only other option is a cable+high-speed-internet connection, but that turns out to be more expensive than DSL+landline (in fact, just the high speed internet itself is expensive when it is offered by a cable company) ~ so we are sticking with the DSL for now, even though that means wasting about $20 every month on landline.

Current fix: Don’t have one yet. Will someone please provide high speed internet for cheap?

So, there… these are the little holes in my pocket. It looks like temptation and procrastination are the roots causes these money leaks (duh!). So far, practicing avoidance has been working very well against temptations, but the procrastination part is a bit tricky to handle. Working on it.

Have you recognized your money leaks? how do you handle them?

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{ 40 comments… read them below or add one }

1 MONEY BLUE BOOK 08.29.07 at 11:44 am

My main money leak is an easy one - coffee!!

There is no better way to throw away your money than to pluck down your $4.50 for a Starbucks Coffee drink. It’s a complete ripoff, but once the caffeine gets a hold of you, it’s hard to resist. I finally weaned myself off of paid coffee finally. I have trained myself to enjoy the free coffee I get at work. It’s not Starbucks, but it’s not $4.50 either! :) :)

-Raymond (MONEY BLUE BOOK)

2 Minimum Wage 08.29.07 at 12:49 pm

My money leaks are rent and debt service. Dunno that I can do much about either.

3 Debbie 08.29.07 at 1:25 pm

About libraries, here’s another idea. Plan to go to the library periodically. For example, if you can check books out for two weeks, go once a week. If you miss one week, you’re still fine.

For some reason, I don’t mind library fines that much; I feel like my money is going to a good cause. But it would be a lot better to just donate money if I want to get things in on time! I’m not allowing myself to go to the library right now because I’m too busy to get around to reading the books.

My biggest leak is probably not collecting rent money from my roommate quickly enough and not collecting money I lend to people.

I used to have a fast-food leak (I still have one, but it’s a trickle) and just buying little things and not knowing where the money went afterwards. Now most of my spending is deliberate.

4 MoneyNing 08.29.07 at 3:26 pm

I used to have the same problem with internet access but maybe you can call up your cable company and tell them that you want to start using cable internet but it’s just so much higher than DSL right now. Maybe they will tell you about promotions that you don’t know about or offering you an incentive to join.

The other thing is see if you can get a better deal with those wireless cards for laptops. Yeah they are expensive on the surface but it might make sense for you if you do the math since it’s WAY more flexible.

5 Garret 08.29.07 at 5:06 pm

Caffeine. In my case, I have a habit to spend too much money on soda. It seems that restaurants have continued to increase the price for these drinks. With the fierce competition among restaurants, I wonder if the price for soda has increased to compensate for the nonexistent margins of the discount food options (dollar menu, sub of the day, etc). Either way, a soda can be an additional one or two dollars for each meal. Over the long run, all these dollars can add up to some significant money. Plus, it is more healthy to just drink water. I now carry my Nalgene bottle of free water around when I head out to lunch with my fellow grad students.

6 Velvet Jones 08.29.07 at 5:17 pm

Lawd save me from Chipotle and the addictive, but expensive, deliciousness!

7 Lazy Man 08.29.07 at 5:33 pm

Let me get this straight… If you borrow a “reserve material” that is 23 hours overdue, you pay over $41. But if you hold it for 3 days (72+ hours) it’s only $9?

I’m not sure if it makes sense to put a cable money leak on your list if you have a book leak. Both are entertainment expenses. It is quite possible that eliminate one leads to the other. Personally, cable gives me reception for any television channels and since it’s packaged with Internet it is less of a leak.

8 Mitch Mauldin 08.29.07 at 6:29 pm

This is definitely advice that each and every on of us should listen to. Getting rid of your “money blackholes”, provides a much more fulfilling and wealthier life. Good Luck to all of your in an attempt to do this, since it can often times be hard getting rid of those $4 Starbucks Drinks… they are Way too Good & Provide the Perfect fix of caffeine.

9 Faisal 08.29.07 at 6:37 pm

As for DSL, if your area supports “dry” DSL, it might be worth looking into. It’s basically DSL service without the landline. I just got that with a VoIP service and it works out to be cheaper than the landline/DSL combination, and includes unlimited North American long distance to boot.

10 golbguru 08.29.07 at 6:46 pm

@ Minimum wage: It’s interesting that you put rent on the leak list. Could you elaborate a bit more on this?

@ Debbie: “Plan to go to the library periodically. For example, if you can check books out for two weeks, go once a week. ” - that’s an interesting way of handling the library. Let me see if I can set a regular schedule for it. Thanks.

@ Lazy: The same reserved materials are not loaned for less than 24 hours and more than 3 days. :) For example, all journals are issued only for 4 hours - the fine starts building up each minute after that. Whereas as some other types of books are released for 3 days (or 7 days) and they are charged based on the schedule per day. :)

Actually, I don’t have a cable leak problem (I listed it as a *typical* leak most people have) - book buying is a leak because it happens on an impulsive and sort of regular basis - without stopping to look for cheaper options.

@ Faisal: Thanks for mentioning that. Yep.. “dry” DSL seems the way to go. Let me check if something like that is available in this area with a VoIP service.

11 Matthew 08.29.07 at 9:30 pm

I’m not sure where you live, but if you have at&t service in your area, you can probably check out this website to get $10/mo DSL.

https://swot.sbc.com/swot/promoLanding.do

No phone line required, but there is a 12 month commitment.

12 A Penny Closer 08.30.07 at 4:07 am

Does your library have an online management system? We feel lucky that our library is fairly new and has a website that allows us to re-check our books before they are overdue. It helps us avoid late fees and unnecessary trips. It might be a long shot but it is worth at least checking to see if they have something like that.

A money leak for us is paying for a basic landline service AND Vonage. We switched to Vonage to save money (which it did) but we ended up keeping a landline so that the alarm system can be monitored. Granted, it is the cheapest possible version but it is still $20 a month! I know we can rig Vonage to monitor the alarm but we just haven’t gotten around to doing it yet.

13 dong 08.30.07 at 6:13 am

Hmm, my money leaks are
1) parking tickets - I get probably around 3-6 a year
2) impulse buying of drinks when I’m thirsy instead of waiting

I have plenty of other areas that I spend “too much” money on, but I’ve sort of actively chosen to.

14 brad 08.30.07 at 7:03 am

You can get DSL or Cable modem with out a land line or video service. Just ask for it. If the contact balks at your choice, just state that this is the ONLY way you will buy their service. (Big savings)

15 Rev 08.30.07 at 7:18 am

I am in the same boat from DSL. The only problem with getting a cable promotion is that it will end and they will jack up your rates. Also you are required to bundle cable tv, if you don’t they charge you $10 no tv fee(Charter). I don’t use my land line don’t even have a phone plugged into it but it’s still cheaper than cable.

You may be able to find a DSL reseller, a local ISP that does DSL and you might be able to get internet without a phone that way.

16 barbara 08.30.07 at 7:55 am

You can have the alarm company come in and hook up your house alarm system to the Vonage. That’s what we did so we could get rid of the landline when we got Vonage.

17 Steve Austin 08.30.07 at 8:30 am

If you can’t go DSL-dry, you could try scaling down your landline service. If you don’t use your landline at all (other than for DSL), you might try going with the lowest class phone service. I had that once, and it was called “metered” service, where I paid 10 cents per call, 10 cents per minute, or something like that. It always worked out to be cheaper for me each month than if I had the unlimited local calling plan.

18 Pinyo 08.30.07 at 9:22 am

Used to be video games and DVDs. I think both of those came to a halt after I started blogging. It’s not making me any money, but saved me quite a bit so far.

19 Carrie 08.30.07 at 11:06 am

Books are a leak for me but I reduce my spending by utilizing the county library’s website to reserve books.

I can find almost anything I want through interlibrary loan and they’ll send it to the nearest branch or one I choose.

So I rarely have to buy a book, and if I do, I can always flip it on eBay or Amazon if it’s not all I thought it was going to be.

20 MoneyNing 08.30.07 at 12:35 pm

Golbguru: I like how you changed the picture of the diecast model car since yesterday :) You really love that stuff huh?

21 golbguru 08.30.07 at 12:55 pm

@ MoneyNing: So you noticed it. Yeah, I love that stuff.. a little too much I think. :)

@ Dong: Hmm… I had that parking tickets drain earlier. However, I slowly came out of that habit of parking where it’s not permitted. In a particularly bad month, I raked up about $120 in parking tickets. :( I am glad that stuff is history.

22 Chief Family Officer 08.30.07 at 7:40 pm

Milk chocolate Pound Plus bars from Trader Joe’s are the best for eating straight (I’m just not a dark chocolate kind of girl) - they’re super creamy. And pretty economical, if you can keep yourself from eating it all at once (which is, admittedly, a rather substantial challenge).

23 MoneyNing 09.01.07 at 10:48 am

golbguru: Yup saw it :) One of my university housemate were really into these diecast models too and his room would be filled with them. He would keep them in the boxes though since it would destroy the value if he took them out (but I never really got the point since I thought he bought it to show!)

24 story 09.02.07 at 10:02 am

I asked about dry loop DSL, and it ended up being the exact same price as the phone + DSL, so no go on that. Try calling and asking for a discount or, as suggested, try calling the cable company and similarly asking for a promotion.

25 Personal Loan Portfolio 12.15.07 at 10:14 pm

Mine is Diet Pepsi in the vending machine at work, but I fear it may soon be my P2P lending.

By the way, why are all comments covered with the no follow tag on this post when you display the “U comment I follow” logo.

26 hijinks 05.01.08 at 6:52 am

It’s hard to believe all the places that your money can disappear to. I think it’s important to step back every now and then and take a look at how you are spending.

27 Youtube downloader 06.05.08 at 1:02 am

My limited money is spent on my game.

28 jenilia 06.28.12 at 8:59 am

hi,
“look at the smaller things that might be steadily leaking money from your wallet.” great advice. My most of money spending through junk foods and cosmetics. i will try to avoid these expense. thanks for your nice information.

29 Estate Agents in Enfield 07.27.12 at 11:40 pm

chocolate are slowly destruct of teeth and so much fat are available in some chocolates some people have a bad habit to eat chocolates daily it occur teeth life very short so be care full

30 Hårtransplantation 08.21.12 at 2:40 am

Do not use credit cards, no payments, etc. saving money until you has enough and can buy contact while you can discuss a discount as well.

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32 Property Marbella 06.01.13 at 2:36 am

Inpuls purchase/buying is one of the most common and unnecessary expense that people make.

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