THE LATTE EFFECT: 3 CASH-SAVVY TIPS THAT CAN SAVE YOU THOUSANDS
We all deserve a little treat now and then but, over time, those little indulgences can add up to huge costs. The phenomenon is called the “latte effect” thanks to an all-too-relatable anecdote: How many of us visit a Starbucks or another coffee shop or drive-thru every single day? A typical latte (including pumpkin spice) will set you back about $5.60. That’s nearly $40 a week and a whopping $2,000 a year.
That’s an expensive coffee habit. And most people duplicate this phenomenon with other goods and services like impulse buying, hanging on to unused subscriptions, and overlooking unnecessary little fees that add up over time. Want to save thousands each year? You might be able to by making the following three simple changes.
1. Take the “spend less” challenge.
For the latte example, making coffee at home or even switching to a more affordable Americano could cut your coffee bill in half or even more. Look at your bank and credit card statements each month and categorize your expenses. On what non- essential purchases do you spend the most? Is it eating out? Late-night Amazon shopping sprees? Challenge yourself to cut those expenses in half next month by finding alternatives like packing a lunch for work or having a clothing swap with friends instead of impulse buying. You might realize you don’t need those frequent indulgences as often as you thought you did.
2. Cancel unused subscriptions and memberships.
Take another look at your bank and credit card statements for subscription and membership expenses that you don’t actually use. MarketWatch reports that streaming music, TV, movies and video games on-demand, along with the many subscription services that automatically deliver groceries, toiletries, clothes, cosmetics, and more, are siphoning away 84% more of consumers’ incomes than they think. Your gym membership? If you’re like 67% of others with one, you’re not using it. And then there are the tricky charges that thrive under the radar like app subscriptions connected to an Apple account or other monthly or yearly costs that that kick in unexpectedly after a free trial period expires. Eliminate those you don’t use, and you could save you more than $100 each month if you’re like the average consumer.
3. Bank wisely.
Some large, regional non-credit union banks report that 40% of their income comes from customer fees alone. These include deposit fees, transaction fees, insufficient funds fees, annual fees, inactivity fees... the list goes on. Don’t blindly pay your loan payments or overlook your banking and credit card statements every month. Carefully consider your fees and rates and ask yourself whether you can do better. Members of CPS IBEW Federal Credit Union have access to banking, credit card, and mortgage and other loan services that often beat what traditional banks offer.
Small changes to your everyday spending can make a massive difference over time. Take the challenge and see for yourself. Need ideas on how to save on services like banking and loans? Contact us today!
Image by Free-Photos from Pixabay