Personal Finance Advice

It may seem like a silly question, but do you know what you’re paying for every month? You undoubtedly know how much you pay for your mortgage or rent every month and you probably know how much your car payment is even if it is automatically deducted from your checking account every month.  These are the types of monthly financial obligations that aren’t easily forgotten.

Instead, think about all the monthly automatic payments you may be making without even realizing it.  You may be surprised to find that you’re spending quite a bit of money on things that you don’t even use, and you may have been spending money on these things for quite some time.  What type of things should you be looking out for?

Automatic renewals of subscriptions.  Whether it’s a magazine subscription, a website subscription, or a subscription to a special service, it may be that you have long since stopped using the item or service yet are still paying regularly.  For example, if you’ve been receiving a magazine for really long time - such as several years - it’s likely that the subscription renews automatically. 

Expired free trials.  Oftentimes services are offered through a free trial, such as credit monitoring services or Internet providers, but then once the length of the free trial is over your credit card or checking account is automatically billed.  Unless you look at your statements each month you may never realize that you’re paying for these expired free trials.

Enhanced services.  Maybe you got talked into buying surge protection for your house from the electric company, or perhaps you never realized that your cell phone provider tacked on monthly insurance to your bill.  You may be paying for these things without even knowing it.  If you notice a charge on a utility bill that you don’t understand, call the provider and ask for an explanation.  If it turns out to be something you don’t want or need, have it cancelled.

Memberships.  Gym memberships are notorious for being paid for yet not being used.  Other memberships that might automatically be deducted from your credit card or checking account without you realizing it include alumni organizations, professional organizations, and social clubs.  Unless you actually utilize these memberships you should cancel them…even if you are embarrassed to cancel your gym membership.

The only way you’re going to discover what extras you may be paying for monthly or annually is by taking a look at your credit card and bank statements.  If you see a charge that you don’t recognize you can call your financial institution to find out if the charge is recurring. 

Make sure that anything you cancel is something you can cancel without legal problems.  If you signed a contract agreeing to a certain number of months or years then you can’t just cancel the service and think you’re done with it because you may be liable for the remainder of the contract term.  If you can cancel something and put more money in your wallet, then by all means go ahead and do it.