12 Expenses That Drain Your Savings Without You Realizing It

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Building up a nest egg can be terribly challenging in a society where the majority is forced to live paycheck to paycheck. But we all need to save for emergency expenses, as well as for our retirement. Sometimes, despite our best efforts, we get set back on our savings journey. This can happen without us even being completely aware of it.

Here’s a look at 12 expenses that can drain your savings without you realizing it and how to take back control so that you can keep building up your nest egg.

Utility Bills — Especially When Not Using Energy-Efficient Devices

Utility bills can not only eat into your spending money, they can eat into your savings. One way to lessen the damage is to use energy-efficient devices in your home.

“I recently reviewed my utility spending and was shocked to discover that I could save around $175 each year by making a few simple adjustments, like using LED lights and switching to a programmable thermostat that reduces heating during the night,” said Nathan Brunner, CEO at Salarship.

Data Usage

We’re pretty much all addicted to our smartphones, which means we’re consuming tons of pricey data. Have you ever looked into how much you’re spending on data usage per month? You could be nibbling away at your savings without even knowing it.

“Excessive data usage is an underrated expense that drains your funds without you even realizing it,” said Akash Karia, a keynote speaker, high performance coach and author. “It’s often overlooked, but when added together, it ends up being a substantial amount and a significant expense, especially if you are not keeping track of your usage.”

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You can effectively lower data usage by limiting streaming and online gaming and being disciplined with data-sucking apps.

“Cut down on data devouring apps like Instagram, TikTok and Netflix, and whenever you have the chance, make sure you connect to a Wi-Fi network,” Karia said.

Subscription Services

Ours is a nation obsessed with subscription services. Eighty-three percent of consumers use at least one subscription based video-on-demand service, as of September 2023, according to Statista — up 10 percentage points in five years. If you’re using a few of these services, you may be slowly but surely depleting your savings.

“Individually, they may cost only $10 to $20 per month, but collectively, you might be shelling out hundreds annually without realizing it,” said Ankit Prakash, founder at Sprout24. “Software-as-a-Service (SaaS) is a silent drain on [your] funds.”

Scrutinize your subscription services and determine which you simply don’t use as often as others to pare down the list. It’s also worthwhile to tally up how much you spend on these luxuries. You may be astonished at just how much you’re shelling out a year on them.

Coffee and Dining Out (Including Takeout)

Yes, you deserve that pumpkin spice latte, and no, indulging in that or a delicious takeout treat once in a while will not destroy your financial health; but these little luxuries do add up, so practice discipline.  

“Frequent trips to coffee shops and restaurants can take a toll on your budget,” said Doug Carey, CFA, president of WealthTrace. “Even a daily coffee or occasional takeout can add up significantly over time.”

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Impulse Purchases

Some impulse buys can be justified — for example, a super and unusual sale on a favorite essential item gives you an opportunity to cost-effectively stock up — but as Carey notes, “small, impulsive purchases like snacks, drinks or items at the checkout counter can accumulate without you noticing.” This can hinder your savings account, ultimately.

Interest on Credit Card Debt

Most Americans are carrying a load of debt that continues to amass thanks to interest. Be wary of signing up for that tempting new credit card.

“It’s enticing to take a loan/credit card and pay minimum payments monthly; however, this is an expensive way to borrow money,” said Ryan Conte, assistant vice president of member services at BHCU, Your Delaware County Credit Union. “High-interest charges and late fees can quickly inflate your debt and eliminate any hope of saving money.”

Costly Auto Repairs (Due to Procrastination)

Don’t procrastinate on getting that oil change or tire rotations. These little fixes can prevent savings-draining costs down the road.

“When it comes to auto repairs, it’s best to stay ahead of the game,” Conte said. “The cost of maintaining a car is cheaper than the cost of fixing a broken down car.”

Low-Quality Goods

It’s a cliché, but it’s generally true: You get what you pay for; meaning you also don’t get what you don’t pay for — and you usually have to pay for it later.

“It may seem easier and more cost-effective to buy off-brand clothes or household goods in the moment, but it often costs more in the long run,” said Mark Henry, founder and CEO at Alloy Wealth Management. “Instead of buying cheap clothing items that you have to spend money to replace every few months, buy a few quality items that will last for years and be sure to take good care of them.”

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Unused Memberships

Been a while since you hit the gym, but you’re still shelling out money every month for a membership? Consider that a drain on money you could be saving.

“Many people have memberships they don’t use, such as for clubs, organizations or professional associations,” Carey said. “Make sure you’re getting value from these memberships.”

Bank Fees

In today’s competitive banking landscape, you can elude a lot of fees and still keep your money safe, but many consumers fall into the trap of paying “overdraft fees, ATM fees and other banking charges that can eat into your funds if you’re not careful,” Carey said.

Dodging bank fees can be done by making the following moves, as explained by budgeting expert Andrea Woroch.

“First, set up overdraft protection between your check and savings account to avoid an overdraft on your account,” Woroch said. “You should also consider canceling autopay on a few bills, especially those that fluctuate from month to month, since they’re harder to plan for and can lead to overdrafts.”

“Second, call your bank to find out if they have any free checking account options or what the minimum balance requirement is to avoid monthly charges,” said Woroch. “If it’s too high for you to meet, shop around, as there are plenty of free checking account options out there. In particular, check with a credit union, which typically [have] many free or low cost banking options.”

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“Finally, never use an out-of-network ATM,” Woroch said. “If you need cash quickly and you can’t find your bank’s branded ATM nearby, head to a local retailer that will offer cash back at no charge and buy something you were already planning [on buying] to avoid wasting money on this charge.”

Late Payment Fees

Not only can missing a payment potentially hurt your credit score, it can hurt your savings account.

“Missing bill due dates can result in late payment fees, which can be avoided with good financial planning,” Carey said.

You can also avoid late payment fees by setting up auto pay on all your regular bills.

Lifestyle Creep

Spending more than you make is obviously not a good idea, but it’s strangely easy to do if you get a fat raise or a better paying job.

“If you get a raise or a new, better job, don’t run out and spend it just because you can,” Henry said. “Your savings account will never grow if you insist on spending every dime you make. Make it a priority to create a new zero-sum spending plan, so you know where all of your money is going. While you may be able to afford nicer things, the extra money should go towards saving or investing or paying off any debts.”

If you struggle to set money aside for saving, “try automating your direct deposit to put a percentage of your paycheck directly into your savings account,” Henry said.

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