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When money’s tight, sacrificing luxuries and other fun expenses is a sure-fire way to free up your cash. But focusing on the way you pay for things is another great way to double down on your money-saving skills. 

It’s easy to overlook how your payment habits can take a bite out of your paycheck. This guide is here to help shine a spotlight on the worst of them, so you can avoid them in the future. 

1. Late Fees 

Nobody intends to pay their bills late. But one thing leads to another, and the next thing you know, you’ve forgotten to send the money, or you’ve already spent it on something else, and now you owe up to $50 in late fines per bill!

If you’re late paying back an installment loan or line of credit, you could also face extra finance charges and interest. Just how much these additional fees cost depends on your installment loan, which is why you should always learn about your borrowing options and how late payments affect your account.  

2. Minimum Payments 

Making the minimum payment on lines of credit and credit cards is one way to avoid late fines, but you’ll still accrue interest and finance charges on the balance you carry over to the next billing statement. 

Those fees have the power to tie up your income for a shockingly long time. Let’s say you plan on paying off a balance of $6,081 by using just the minimum. With a 14.99% interest rate, it would take you 14 years and around $14,000 in finance charges to pay it all off!  

Carrying over a balance also ties up your credit limit, meaning there’s less available credit to help you in an emergency. That’s why online direct lenders recommend you always pay more than the minimum. Paying your entire bill will free up your line of credit limit for the next purchase. 

3. Overdraft Fees 

If you’re living paycheck to paycheck, you know any change to your bills could leave you with less than you need to cover all your obligations. 

Suppose you get hit by data overage penalties from a cell phone bill you’ve set up to pay automatically. That means there’s less money in your checking account for the next automatic withdrawal, and bam — you’ve just been charged an overdraft fee. 

Like late fines, overdraft fees can sting. The average bank will charge $30 to 35 each time you overdraw your checking account. 

4. Impulse Buys

You might not think splurging on something fun costs much, especially if you stick to small items like chocolate bars or inexpensive kitchen gadgets. But they can add up faster than you think. The average American spends $183 on spur-of-the-moment splurges. 

The Solution: Start Budgeting

If you’re constantly losing money over impulsive spending or late fees, a budget can help. By drawing up a budget, you’ll find problem areas in your spending that do nothing but waste your cash.

Once you’re aware of the issues, you have an opportunity to cut them out of your budget. By rebalancing your spending, you can push more money toward things that really matter, like bills and savings. You can even budget to afford those impulsive splurges responsibly. 

Try out budgeting the old-fashioned way or use an app. Either way, give this spending plan a shot to save more money.  

This content was first published on and should not be copied or reproduced.
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