Personal Finance 

Money Leaks Series

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Leaky faucetStarting today, running every Thursday until I run out of ideas, we’ll be identify a potential Money Leak in your financial life and figuring out ways we can plug it. A money leak is anything that you spend money on that you could, conceivably, cut back, replace, or otherwise do without affecting your life tremendously. It’s leaking money in a way that might be invisible to you and you could, with just a little bit of extra work, plug it and give yourself a little raise.

The classic example of a money leak, one that we won’t be covering (until maybe the end when I run out of ideas!) is buying that morning coffee from Starbucks. If you spent $5 a day on coffee, five days a week, fifty two weeks a year, then you’re looking at a total expense of $1,300 a year. Put that money towards some travel mugs, a nice coffeemaker, and the best coffee beans you can find and you’ll still be further ahead at the end of the year (plus you’ll have a nice coffeemaker).

So, in the coming weeks, we’ll hit one money leak a week until we’ve hit them all… and then I’ll start asking you for ideas! If you have a good idea you want to share right now, please let me know in the comments.

(Photo: johnx62)

{ 34 comments, please add your thoughts now! }

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34 Responses to “Money Leaks Series”

  1. Gob says:

    Alcohol. I estimate we spend $2500 a year on it.

    • Steven says:

      Psshh… might as well include staying alive. =p

    • tbork84 says:

      You could make it about purchasing alcohol at bars or restaurants rather than buying your own as being the money waster here. Its the same idea as buying a cup of coffee or brewing your own.

  2. Strebkr says:

    I like the idea for this series. I can’t wait to see some of the ideas.

  3. Eli says:

    Usual suspects like ATM fees; credit card annual fees; late fees in general (so consider auto bill pay); fees to book travel/award travel by phone v. online (plus airline fees in general like bag check/in-flight food/etc.); cigarettes; cable you don’t watch; gym memberships you don’t use; subscriptions you don’t read; buying lunch as opposed to brown-bagging it plus vending machine visits; vampire electricity usage; books/DVDs you can borrow from the library; 411 calls; bottled water; postage instead of paying bills online; holiday-specific gift wrap (get something more versatile that works for multiple occasions, or for Christmas, at least wait til after the holidays for half off discounts); convenience stores (at one by me, a half gallon of milk costs $4.50; at the grocery store a few blocks away, $1.89); for me, contact lenses are cheaper at 1800Contacts than at the optometrist; taxis v. public transport/walking if possible (I understand depends on city)…

    • Strebkr says:

      I think you just gave Jim 25 ideas to write about. While some of these might be trivial to us, they could benefit less experienced readers.

  4. Martha says:

    How about: purchasing gifts in advance of birthdays/holidays when they are on sale vs. last minute gifts? Or even making gifts vs purchasing gifts?

  5. LL says:

    Eating out for a quick meal is the worst leak for me. I try to combat this with pre-prepping food in the freezer, but it doesn’t always work out. If I were more disciplined about it, I could spend quite a bit less on eating out.

  6. LL says:

    Oh, and my garden (or any hobby, really)! I have a vegetable garden, which produces a lot, but I could have done some things cheaper – like starting plants early, from seed, instead of buying starter plants. $1.50 for a seed pack, or $3.50 for a single plant. I also failed to plant my winter garden last year, despite having a great climate where I could grow year round.

  7. Joy says:

    My money leak is buying books. This is my biggest weakness. I love to read and I do not hesitate to buy new releases at $14.99 for my Nook. I’m sure I’ve broken even with the purchase of the Nook and the reduced price of electronic books compared to hard copy. However, I would save more if I borrowed from digital lending libraries. Unfortunately, I’ve been too lazy to look into more.

    • Jim says:

      That’s the subject of next week’s leak. 🙂

      • Martha says:

        Oooh… book buying… a wonderful thing to do but then where do you keep all those books?? 🙂

        • Darren says:

          I love reading too!

          Borrowing from the library helps me two ways:

          1) Obviously, I’m saving money.
          2) I also avoid the clutter of having to find bookshelf space for all the books.

        • Shirley says:

          I buy used books and pass them along to others who also pass theirs along to me. Win-win!

          • sophomore says:

   will ship anywhere and there are multiple physical store locations across the US. Not a pitchman, just works for me geographically.

    • skylog says:

      i can agree with this one. i also think of it often, but even if this is a “leak,” so much good comes from reading it is certainly better than many that will show up in this series.

  8. Joe says:

    Plan your driving errands efficiently so as not to backtrack or make duplicate trips to a given area. This saves a lot of gas money.

  9. Good idea for the series. We bought a Keurig at my office. We figure a cup of coffee is 55 cents now. We are very happy not to go out for coffee.

  10. Anthony says:

    Aww, now you can’t do Starbucks. You pretty much covered it in this article.

  11. billsnider says:

    How about not shutting lights off.

    Bill snider

  12. skylog says:

    dining out. i try and try, and try some more, but this is the one i can not seem to cut down as much as i want.

  13. Vic says:

    I would say children and having a home. Two biggest leaks I can think of 😀

  14. otipoby says:

    I used to be a Starbucks junkie – every day a venti brewed coffee for $2.10. That changed when I found a guy at work that roasts beans on the side. Also, I got a coffee machine that grinds beans before brewing. Let me just say, I do not miss Starbucks. And, I get twice the coffee for half the price.

  15. PokerCat says:

    Great idea!

    1) Lack of menu planning – not loading up on non perishables when they are on sale to tide you over for the next sale.

    2) Cell phone plans vs pre paid plans with a disposable phone. I can’t believe how little I pay now that I have switched.

    3) In our area, you get a (small) credit for using cloth bags at the grocers (about 50 cents per bag). It’s only a couple of bucks a grocery trip, but still, it adds up.

    4) Not doing a proper spring cleaning and selling items you haven’t used in two to three years. Put a little extra cash in your pocket, and organizing your life so you don’t buy extra of certain items, not realizing you already have plenty hidden in the clutter.

    5) Balance insurance on your credit cards/pet insurance/etc. Seriously, what a scam!

  16. Guy in SA says:

    1) not maintaining your car such as underinflated tires, dirty air filters and driving with an extra hundred pounds of junk in the back.
    2) Insulate your home, even if all you do is buy some caulk and seal a few leaks. Some local utilities will come do an energy audit at your house. Home Depot sells an inexpensive infrared detector that detects energy leaks.
    3) shop your auto insurance around. If you have health insurance from work you can decline personal injury protection and save $100 a year. In Texas you get it automatically unless you specifically decline it. Raise your deductible.
    4) purchase animal meds at 1800 pet meds
    5) ask for a discount (everywhere)
    6) before running errands google for a coupon. For example, the last time I went to change my oil, i googled and found a $5 coupon. Before calling Terminix last month i found a 10% coupon on their website.
    7) Check your state’s unclaimed property site. Most of them are on the web. Check at least once a year. Type in the name of 5 friends and then make the big winner take you to lunch! I found $6,000 for one of my friends.

  17. Huskervolleybfan says:

    My local Bruegger’s Bagels offers an unlimited coffee option for $149.99 per year. Good coffee, the shop is conveniently located. I think it is a bargain to have coffee with the “girls” three times a week. I stop in other times and just fill ‘er up.

    • Strebkr says:

      That is kind of cool. I have never heard of that before. Is it a popular option?

      Its certainly a good way to get bodies through the door every day.

    • skylog says:

      that is a great option! we have many, many coffee shops where i live, but i have never heard of this. i know quite a few people who would sign up in a heartbeat!

    • astuartgirl says:

      I miss Bruegger’s! They have the most delicious Honey Nut cream cheese.

  18. sophomore says:

    Jim – as you work on this series, please work to call out alternatives v. investments when doing the “money leaks” series. An alternative is similar to financial arbitrage where a buyer can pick up substantially the same item in multiple markets. The book example in the comments (Nook, Amazon, used, friends, public library, etc.) is an example. An investment is an opportunity where resources are spent now (time, money) for lower costs in the future. Some examples are gardening v. groceries or insulating your home. Thank you and keep up the great work.

  19. I was amazed when I shopped around for my car insurance. I had been with the same company for almost 20 years. When my father died and I called to make changes to his car insurance policy, I told the agent thanks for being so helpful. I said that I will call back with to get a quote. He talked me into doing it right then and I saved $900 every 6 months!

    That was a leak that I did not even know that I had.

  20. Scott says:

    Here’s a few things I looked at that made the most difference:
    1. Cable cut out; only stream Hulu & Netflix **save time too vs. surfing for useless programming

    2. Raised deductibles on cars that are older to $1500 – saved $600 / 6 months

    3. Stopped eating out; save 10% sales tax & 20% tip, not to mention the premium for “being served”. Many states do not tax groceries, so I fed 4 people beef tenderloin for $20 last night.

    4. Make our own coffee & other smoothies, sauces, soups, etc. We’re buying less pre-prepared food in jars, etc. for the freshest.

    5. Bike to run errands; even to the grocery store for the onesey-twosey items. Plus its good exercise.

    6. Buy online w/free shipping & cheaper products; bought a 2 pc suit (the brand I prefer) for a whopping $99 on Amazon (gold-deal). Even on sale, I would have paid $150-200.

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