Five Reasons Why Your Savings Account Is Being Destroyed

As you know Americans are notorious for not being able to save enough every month. We bleed out our savings every single month by costs that can be trimmed down. Let’s take a look at some of the biggest offenders:

Rent

This is your biggest expense but also a place where you can single handedly get your biggest savings from. You don’t have to move to a place with a higher homicide rate, you just have to avoid an extra fancy place. You may be tempted to move into a sleek glass skyscraper, or a newly developed gated condo community. Some people pay a huge premium to live in the core of the city. Choosing a sensible property is bound to save you thousands every year.

Car Payments

Car payments can easily be people’s second largest expense. Sports cars and luxury cars are so tempting, but they also kill the amount of money you can sock away every month. An option here is to buy a reasonably priced car on cash and go for a reliable machine so you don’t have to spend $1500 on a transmission job. I am not stopping anyone from getting their Porsche, but I’d definitely have my financial foundation solid first.

Eating Out

You really need to put a stop to this one which can be as bad as a car payment. If you read my previous article, you would know that James was spending $336/month eating out.  At my last startup, my engineer colleagues ate out every single day. These were single guys living alone. They just couldn’t be bothered to pack a home lunch. A simple lunch is an easy $10 bucks these days and you can shell out a few hundred bucks a month. Buy food from cheap grocery stores and prep it before the week starts.

Entertainment

People are in love with entertaining themselves on a whim. Movies on the weekend, $12. Caramel Frappuccino from Starbucks, $4, Drinks with the friends on the weekend, $30. A random coffee date, $15. A once in awhile concert ticket, $60. Eating out with friends and colleagues, $20. Do this for a year and now you’re out of a few thousand dollars. Watch your excess spending by setting up a spending limit for your entertainment category every month. If you exceed the amount, you’ll need to politely decline dinner invitations for the month.

Try a mechanism that you have a comfort level with. For example, you can have different envelopes for different expenditures. Seeing and visualizing cash as you take from it, can help reinforce strong saving habits.

Cable/Internet/Subscriptions

You most likely have subscription to Cable, Wi-Fi, Netflix, Hulu or some other type of pay for service feature. Cut your cable all together and check out Republic Wireless or Simple Mobile for as low as $15/month. It’s a network that’s based off of only wi-fi service. You can then subscribe to a Netflix and Amazon for $20/month.

Verdict: Trim these expenses every single month and you’ll notice a healthy bump in your savings account.

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