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What is a money leak?
A money leak can be the cause of why you aren’t saving money each month.
Today I’m going to talk about two ways to find money leaks so stick with me so you can learn how to do it.
John and I found our money leaks when we started a new budget to prepare for his retirement.
We weren’t tracking our finances when he was working, which I admit now was something I wished we had done.
Before his retirement, we looked at our overall spending but not look at thedetail of each account.
When we started working on our money leaks – we were able to save about $200 a month on food because we were conscious about what we buy in the grocery store.
We also started making a meal plan each weekend for the upcoming week.
The main reason we are saving money in this area is that we are conscious now we we’re in the grocery store.
It’s possible that youmight not be conscious of all the ways you’re spending.
A money leak can be the way you use cashwithout knowing where that money went.
I want to encourage you toidentify your money leaks so that you can start to save. I talk to so many women who are not saving.
They don’t think they can save but in reality – even if you save only $25 a month you’re saving.
Here’s two possible areas of money leaks:
- It can be spending money on Starbucks each month and the cause of not saving money.
- It can be your top spending categories of your budget.
One of the easiest things you can do is to look at your expenses and start to find out where you have money leaks.
Here’s tip #1 to start looking for leaks:
John and I started with our highest spending categories that included food, insurance, travel, and pet care.
Because John is a physician we had high insurance costs. In addition,we have long-term health care insurance and we pay for our health insurance and in the U.S. that is very expensive.
I called our insurance agent and found that I could save $100 a month because I wasn’t driving much since I work out of my home. I also found that my son could save that amount because he lived close to work.
It’s a good idea to review your policies annually to see if anything has changed.
Tip #2 –track your cash spending
When you get cash weekly or monthly, are you tracking where you spend it?
If you are unable to identify what you spent that money on at the end of each week or that month then you know you have a money leak.
Notice where the cash goes. I have a big leak with Starbucks. I’ve used buying coffeeas a way to get out of the house as a treat.
I’m working on this leak now to reduce it (it’s hard!).
I decided to stop loading a Starbuck’s card (yes I skipped those points for free coffee) and I started paying cash. I get cash every couple of weeks and I was shocked at how fast my cash disappeared.
This helped me see what a big leak I had. Notice where you pay for things with cash.
I like to lean into it – make small changes over time. Strive to save some of that money.
Start saving receipts and then each week – total up what you spent and identify a pattern in your spending so you can identify a leak.
Now I’d love to hear from you. Do you know where you have money leaks even without looking? What are they?
If you liked this video, let me know in the comments below or please share it with your friends.
If you want more actionable tips and trainings each week, sign up for more at sheroldbarr.com
Here’s to you stopping your money leaks so you can save more money!
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