Money Leaks: Keeping Purchases in Check
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I was reviewing our expenses over the last few months and I noticed something. There were several purchases where I couldn't remember everything that we bought.
We're not victims of identity theft (oh, that would be a more pleasant explanation). It's something worse – we've been spending and shopping without a plan.
Since I handle many of the day to day purchases, I hold myself responsible.
Have I been throwing away our money on yachts or lottery tickets?
No, our wasted expenses seem to be from an innocuous sounding part of our budget – household expenses.
How Money Leaks Can Sink You
By making these purchases, we have less money to devote towards the bigger goals we have for this year – getting rid of the student loan and buying a house.
Those goals will benefit us in the long term. Getting rid of debt frees us and a new house (according to our criteria) will reducing our housing expenses and give us more control on our bills.
So to make sure we reach our goals by the end of the year, I'm fixing my mistake and tackling it.
Uncovering Household Expenses
The first problem with the spending is how easy it is for spending to slip. Household expenses is a nebulous category.
It includes necessary items like trash bags, baby wipes, and tools along with kitchen gadgets (only comes out for very specific and special occasions, but take up space during the entire year), home improvement projects (which we then forget to actually do!), and convenience items (which may get used a few times a year).
While they can happen with any store, I've noticed that I slip up when I'm at place like Target or shopping online with Amazon. (I would add Costco, but I did review our list from the last run, so we're all accounted for on those.)
What usually happens with these trips is I go into the store or log into Amazon with a plan. I need to pick up X,Y, and Z.
With the store, I'm passing by sections and find sales on items my husband and I talked about getting. Nothing absolutely needed now, but nice to haves. Seeing it 40% triggers me to get this ‘deal' before it's over.
Amazon notifies me whenever something from our wishlist is on sale, so that temptation to order it then is huge.
Those little extra purchases add up. When I did our quarterly review I saw just how much we had wasted.
I gotten away from being vigilant with spending. It was a financially painful reminder if you don't track it, it is easy to get sloppy with spending.
But that alone won't fix this problem. We need a way to reduce unnecessary expenses and build up our marriage.
Communicating Better with the Small Stuff
Now that we recognize the problem, it's easier to come up with a solution. While I'm a big fan of looking at the numbers, I have to deal with the root cause – learning to delay purchases.
It isn't about depriving our family with the essentials, it's about seeing if we really do need something or if we're fine without the gadget.
The first change is communicating before buying something outside our immediate plans. I see this being beneficial in two ways:
- I review if this is really important or a huge and real convenience. We're not opposed to getting items that will greatly enhance our quality, but having a second pair of eyes we can examine if we'd use this item as much as we imagine.
- Usually when I run things by, I take the time to look over deals and can give a ballpark figure of what the costs will be.
With these chats we'll both be on the same page with our finances.
Tracking Our Money
Money leaks can be spotted early by tracking it. Since neither of us has the time or energy to constantly check all of our accounts, we'll use tech to do the heavy lifting.
Two of my favorites are Personal Capital and Mint. We've used both of of these free services and think they provide some wonderful services.
Personal Capital has a cash flow view for your finances, allowing you to see all of your transactions. The good news is that PC does a better job labeling expenses than Mint does upfront (which save me a ton of time).
Once you are seeing the overview of your spending, you can hone in on problem areas with your budget. You can sign here and try them out.
Mint is appealing because of their budget feature. You can go in and pick a weak area of your budget and assign a monthly allocation.
Every week you get an update and if you approach the limit, you'll can get a text or email. If you already have an account with, it takes only a few minutes to set that up. You can open an account here.
Now it's even easier to make sure that your budget doesn't have any money leaks.
Thoughts on Money Leaks
I'd love to get your thoughts on fixing money leaks. Have you ever spent more than your planned?
Are there any particular stores where you have a hard time keeping tabs on? How did you two solve it?