If you pay attention to a lot of personal finance advice, one of the first pieces of advice that you get is to start a budget and start cutting major expenses.
As a financial planner, we would rather focus on increasing your income and focusing on saving, rather than try to control and cut the costs.
The reality is, most people on a budget, fail. They fail after a few months. More importantly, budgeting typically does not fix the issue in the first place.
This does not however mean that there are not things we can take away from budgeting, more importantly taking a look at the monthly expenses, to identify items that are either completely unnecessary or you were even unaware of. Here are four ways to save without any sacrifice.
Cancel your AAA membership
Many people will spend upwards of $100 a year for AAA coverage. Unfortunately, or fortunately, if you have a major credit card, like an American Express or MasterCard, you are paying for something that you get as part of your credit card benefits.
Yes, AAA will also give you discounts on hotels, but if you travel enough to offset the fee, you would be buying AAA for those travel benefits, and not the roadside assistance.
Check/Remove unnecessary auto insurance riders
One of the recent discoveries I made was that my insurance company, Geico, automatically added “Emergency Road Service”, “Rental Reimbursement” as well as “Mechanical Breakdown” coverage.
This can easily be over $200 a year you are spending more than necessary, particularly if your car is under warranty, and you are already covered by your credit card for roadside assistance or included with your new car purchase.
Completely unnecessary if you drive a brand new car.
Furthermore, check your policy, and this is the “consult with your financial professional” part about what the appropriate level of coverage is for you. One area that is tacked on is extra medical coverage, beyond what would be covered by your health insurance.
Savings: $100 +
Interest on credit cards
If you are like most Americans, you may be carrying credit card balances from month to month. If you have average or better credit scores, there is no reason for you to be paying interest charges on your credit card debt.
First thing is to do a credit card inventory. Make a list of all your credit cards, writing down all of the credit limits, balances, and interest rates on the cards.
Is there a better card for you to carry your debt? Do your cards have a special balance transfer offer? If not, you may want to consider applying for a new card that will give you an initial balance transfer offer, with 0% interest for an extended period of time, giving you the ability to pay down, or pay off your debt without paying 20% plus in interest.
This sounds like a no-brainer, however about half of the people we meet do not do this currently.
Savings: $$$ to $$$$
Cancel automatic subscriptions, especially, unused ones
Pretty much everyone can be guilty of this at some point. Even I have found myself paying for subscriptions I no longer use, such as a Netflix account when I used Amazon Prime, and a subscription to a credit monitoring service I no longer had a need for, as I was now getting it for free from American Express and Capital One.
Go through your credit cards and debit cards and examine each charge. In the days when people of my age do not know what the purpose of a check register is, or what balancing a check book means, it is easy to miss recurring payments.