Now that I’m in the final days of saving for a car, I’m trying to minimize spending wherever I can. These are a few things I’ve stopped doing in order to cut back on frivolous spending.
Featured photo was first seen here
The first thing we need to understand is what is frivolous spending.
Frivolous spending is any unplanned purchase that is not a part of your monthly/ annual budget. If you’ve planned to have one $2.50 coffee every morning for 260 days (full working year), then your coffee is NOT frivolous spending. Those weekend coffees that you haven’t accounted for; frivolous spending.
One. Hidden fees/ recurring subscription apps or services.
One thing I like to do when I knowingly sign up for a recurring subscription app is to set it up through PayPal because you can track the preapproved recurring payments through Settings > Payments > Manage Pre-approved Payments which will bring you to a list of preapproved payments and their transaction dates. You have the option of clicking on each vendor and canceling or changing your payment method. When I logged into here for the first time, I was surprised I had an Angie’s List subscription still charging me since 2016. That has since been canceled. Total Annual Savings: $240
Two. High-interest payments.
Now that I’m currently working on my taxes, I’m reminded how much my annual student loan interest payments are not worth the minor tax credit that I receive in return. I have since refinanced them with SoFi and have not only gotten a better interest rate (almost 3% total) but I also will pay off my loans two years faster with them while having a 15% reduced monthly payment. After all the vetting I did (if you remember in this post where I talked about it), I’m extremely impressed with SoFi’s ability to help me reach my financial goals. If you sign up through this link, you’ll get $100 to your first debt payment on one of their programs if you qualify for a loan! Total Annual Savings: $2000
Three. Unplanned purchases.
This is somewhat obvious since this is the definition of frivolous but have you sat back and really started tracking what you spend on unplanned purchases? You may account for your work coffee, but what about that bag of M&M’s for the plane ride home, or the flowers you picked up last Tuesday to lift your spirits. $2-$10 may not seem like a lot at the moment, but over the year it could add up to a lot! I recommend logging in to a service like Mint or Clarity Money to see what you’re spending outside of your planned budget. Total Annual Savings: $100-$xxxxx
Here are some ideas on how to cut back on frivolous spending:
- Reduce your coffee intake or switch to tea.
- Cancel subscription services like streaming services you rarely watch or apps that you no longer use.
- Spend on your credit card, but pay off with real income. If you can pay recurring monthly bills with a credit card that has a good rewards system, then you could end up finding “free” money.
- Reduce your interest rates! If you have debt, take a look at the highest rates and try to refinance with a reputable company, like with what I did for SoFi for my student loans.
- Eat smaller portions and save leftovers for another meal.
- Unsubscribe from all retailers emails. No, you don’t want to know about the 40% off sale.
Hope this helps!