Key takeaways
- Just like a leaky water faucet, a leaky money faucet can add up to thousands of lost dollars over time, if left unchecked.
- Use one of the many online services that track all of your expenditures.
- One day a week, such as every Friday, review each of your expenses to determine where the leaks are coming from.
- Come up with a strategy for eliminating the unnecessary expenses and hidden or forgotten expenses to free up cash for use in other areas.
Don’t you hate it when you’re in the bathtub and you try to turn off the water, but it just keeps dripping and dripping? You tighten it as much as possible, but it continues to leak. You can’t just stop there and ignore it because you know it needs a more permanent fix. This scenario came to mind recently when I was thinking about a leaky money faucet.
A leaky money faucet happens when your money is going all over the place. How does that happen? A leaky money faucet can start for a number of reasons:
- Maybe you’re not comparison shopping before making purchases
- You might eat out a lot because it’s convenient
- Perhaps you subscribe to several services that you’ve forgotten about, but have been paying on for months and months
Any of these things, and others, can add up to a lot of money without your realization. There’s a three step approach to fixing that leaky money faucet:
- You’ve got to be aware of it.
- You’ve got to be intentional when it comes to doing something about it.
- You’ve got to have a strategy in place for stopping the leak.
You can gain an awareness of where your money’s going by using one of several online services that record every financial transaction you make. Then, once a week (we like to call this Financial Fridays), you take a couple of minutes to look over your expenditures for the week. This is great because it reveals where you’re experiencing those leaks, which definitely can add up to thousands of dollars.
Once you know where the leaks are, you can correct it by being intentional. You can decide you’re going to comparison shop from now on, whether you’re buying a kitchen appliance, electronic device, a car, or whatever. If eating out is part of the problem, you could commit to planning meals in advance, so you don’t use eating out as a stop-gap when you’re short on time. Many times, part of the leak problem originates from forgotten subscription services fees. Whether you’re paying 99 cents or $9.95 a month, consider cutting them if you don’t use them.
Having a strategy to go through each item one-by-one on your Financial Fridays and continuously evaluating and repairing leaks will keep your budget nice and tight. That way you won’t have to worry about having all this money leaking all over the place that you could put to better use elsewhere.
Staying aware and repairing leaky money faucets really does make a big difference over time. Then you can use your money for other things, like paying down debt, saving more for your emergency fund, saving for a house down payment, or whatever it is you want to do. Until next time, enjoy.
Gary