How to Find Invisible Expenses & Be Mindful About Money
Chances are you've heard the term "invisible expenses" thrown around but few people know exactly what they are or how they can avoid them. Invisible expenses are essentially things we've spent money on which we only seem to realize after the fact, like, for example, at the end of the month when we look at our finances. Put another way, invisible expenses are costs that have slipped by without notice but in turn throw off our entire budget and put us on the back foot every month.
Most of the time, when budgeting, you know roughly how much things will cost and where your money will go so you can account for things accordingly. However, there are always those little expenses that creep up on you and burrow a hole in your wallet.
Below we take a look at how you can put an end to these pesky invisible expenses and be more thoughtful about money.
Ask Yourself How Essential the Products and Services You Buy Really Are
The first line of defense against invisible expenses is making a habit of checking the usefulness of the products and services you buy before you purchase them. How many of the things you purchase or consume do you really need?
Suffice to say, a life of only needs and no wants would be a little bland, however there are different levels of "need". Before making a purchase, take a quick moment to think about it and weigh up the "want vs need" ratio. Often, we overspend for emotional reasons, or spend money on services we really don't really need.
Organize the money you want to spend on leisure, for example during weekends, while also making sure you leave some funds to save a little at the end of the month. Alternatively, at the start of the month, work out how much you want to save, put that amount aside, and use the rest to live on.
If, however, you find yourself unable to make it to the end of the month, you can borrow as little as $100 or $200 from Ferratum. These types of small loans can be the perfect solution for an immediate financial issue which may have popped up in between your next pay.
Check Everything Twice
Double-check all your outgoings for additional ways to save money. Checking your finances each month will enable you to pick up on things that may have slipped your mind.
Have you noticed you spend $50 a week on coffee? Maybe it's time to make coffee at home instead. Take a look at your accounts, look for unnecessary expenses and your spending trends to see what you can reduce.
Another reason you should always look at your finances is for fraud. Almost everyone has encountered exposure to identity theft. Maybe your card has been "swiped" and someone abroad is using your card to purchase goods. By doing a quick monthly account check, you will be able to identify these instances and flag them with your bank.
Track Your Expenses
Another tip is to write down everything you spend using a budgeting app or using the notes app on your phone. By writing your purchases down, you will become more mindful of your ins and outs and your general spending behavior.
Even if it seems counter intuitive, sometimes paying a little more for a product or service can mean saving money in the long run. For example, say, you want to buy a kitchen appliance such as a blender - instead of simply purchasing the cheapest model to save money, often it can be better to purchase a more expense model which will save you repairing or replacing the cheaper one. Additionally, perhaps the energy savings on the better unit help you save money as well.
What are some of the expenses you think you could save on next month? Maybe you can save money on airline tickets?
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