10 Budget Leaks That Cost $10,000 or More Every Year.

10 Budget Leaks That Cost $10,000 or More Every Year.
 
What can you do when life just doesn’t add up? For many Americans, wages have stagnated for decades, while the costs of survival have gone into the Nethersphere. As a result, consumer debt is higher than ever – about a trillion higher than it was before the Great Recession, at $14.56 trillion.
 
 
If you are struggling to make ends meet, and finding that you have to put emergencies (and sometimes even food) on a credit card, then you’ll have to think creatively about budget solutions. Cutting out café lattes and avocado toast isn’t going to cut it. Most of us, are not shopaholics.
 
Below are 10 Budget Leaks that cost thousands annually. The 10th Tip is a game-changing solution that is being adopted by more and more Gen Z and Millennial adults.

1. Gasoline.
2. Vehicles.
3. Electrical vampires.  
4. Low deductible health insurance (if you’re healthy)
5. Life insurance.
6. Drafty rooms.
7. Water heaters.
8. Credit cards.
9. Eating out & prepared food.
10. Housing.

 
And here’s the skinny on getting a leaner budget.

1. Gasoline. The cost of gasoline for the average American can be almost $2,000 each year. Is it time to buy an electric car or hybrid? To ride a bike or move closer to work? To telecommute a few days a week, take public transportation or carpool? Johan Esbensen (RIP), the founder and president of Rogue Status, DTA Authority and other popular clothing brands, started a bike movement in Venice Beach, California that transformed the entire westside. Today, Santa Monica and Venice, California are embracing micro mobility, with bright green bike lanes and a new metro system.
2. Vehicles. When you add up your car payment, insurance, fuel and maintenance, most Americans are spending over $7,500 on their vehicle annually. Ted Winterer, the former Mayor of Santa Monica, California, has only one car and five bikes for his family of four. In my interview with him of 2019, he said, “In 2017, between my wife and I, we spent a little over $2000 on Uber and Lyft. That is so much less than the cost of owning a car. Sometimes the situation comes up when you can’t walk or ride a bike.” 
   
   As a result of the pandemic, in 2020, transportation CO2 emissions were down by 10% in the U.S., with air transport CO2 down 40%. The benefits of working from home are profound for your wallet, and are also healthy for our planet.
   
   
3. Electrical vampires.  Smart electricians, knowledgeable handymen and roof solar owners are spending 90% less on their electric bill than the average person. Know your energy vampires (big appliances) and limit the time you have them operating. Adopt the adage, “On when you enter and off when you leave” for your lights and electronic devices. Try eco comfort settings. Fix the leaks in your home, insulate, and use sunny rooms for lighting and heat. Imagine paying $400 a year for utilities, rather than $4,000 (or more). What would you do with all of that savings?
4. Low deductible health insurance (if you’re healthy). If you’re healthy and spending an arm and a leg on health insurance, then you should consider a high deductible plan with a Health Savings Account. The HSA is tax deductible and becomes the best long-term health care plan you can have in retirement! Learn more about HSAs in my blog (click to access), and on the IRS.gov website. Add-on tip: open the HSA at your favorite brokerage and have the entire universe of stocks and bonds to invest in (once you’ve accumulated at least two years’ of deductibles and coinsurance dollars).
5. Life insurance. Life insurance is like being a renter. Once you stop paying, you get evicted. If the worst-case scenario happens quickly, then investing here could pay off. For most Americans, life insurance makes the life insurance company and executives rich.
   
   Instead of pouring your dough into the life insurance company’s account, that money could be placed in a tax-protected retirement plan, where you can invest and compound your gains. Your IRAs are available for withdrawing when you are on a fixed-income, and don’t go away just because you’ve stopped contributing. Almost all of the retired folks I know with life insurance lost it when the choice came down to keeping their home, paying for food, or receiving medical care. As you age, the benefits might be reduced, and the premiums will rise. Read the blog, “10 Money Tips of Billionaires and Royals” for more information.
6. Drafty rooms. If your heating or cooling is going on every half an hour, then you have a drafty room or a leak somewhere. Simply fixing leaks and having a properly-insulated home can save up to 90% on your heating/cooling bill. Check out my blog on Matrix Energy for tips on insulation and Passive House technology.
7. Water heaters. A simple timer or an on/off switch on your water heater will prevent it from heating water when you are at work or sleeping. While I was in India, my hosts instructed me to simply turn on the water heater about 10 minutes before showering, and to turn it off directly after use. These simple and affordable gadgets can cut your water heating by a staggering amount.
8. Credit cards. The credit card debt in the U.S. is an eye-popping $820 billion, according to the February 17, 2021 report from the New York Fed. Many people are paying staggering interest rates, fines and fees.
   
   Paying down high-interest rate debt is a great idea. But an even more important part of the solution is adopting a sustainable budget, and socking away 10% of your income into tax-protected retirement plans. Waiting until you pay off debt before you start investing is a losing strategy that could dog you your entire life.
    
   Learn more about debt and the Thrive Budget in The ABCs of Money. Get a 21-day, chapter-a-day money makeover in The Gratitude Game: 21 days to a healthier, wealthier, more beautiful you. Try a sample 21-days of prosperity coaching for free. Simply email info@NataliePace.com with FREE GIFT in the subject line.
9.  Eating out & prepared food. Eating out can really add up (particularly when you add in delivery fees), as can purchasing prepared food at the grocery store. Home-cooking isn’t going to fix a big budget problem. However, it could add up to thousands saved annually, if you’ve become overly reliant on fast, casual dining (much more if you are visiting formal dining establishments regularly). The average cost of food per month for the typical American household is about $550/month ($220/person), according to Value Penguin. If you’re spending more than that then it might be time to dust off a few recipes and polish up your cooking skills.
10. Housing. Housing has become unaffordable in the majority of U.S. cities. If you’re spending more than 28% of your income on your mortgage or rent, then now is the time to make bold, brave choices about your living situation. Home-sharing is one of the fastest ways to save thousands annually. That’s likely behind the fast-growing trend of intergenerational housing, which is higher today than it was in the Great Depression. You might think that giving up privacy is hard to swallow, until you discover that your wallet now bursts with an additional ten thousand (or more) annually. That’s a lot of bucket list getaways!
    
    
    

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​A debt problem is, at its heart, a budgeting problem. Although it’s not your fault that housing, health insurance, transportation and food cost more than you earn, you must be the boss of your money and the visionary of your future in order to break free from this fiscal subjugation. The sooner you take charge, the faster your life transforms.


In addition to fixing the leaks in your budget, now is the time to make sure there are no leaks in your financial house. Join us for our April 24-26, 2021 Financial Empowerment Retreat. (Click to learn more.) In 3 days, you'll receive a complete Money Makeover and transform your life forever! Bring your friends, family and teens for an unbelievably low group rate. Call 310-430-2397 or email info@NataliePace.com to learn more now. 
​

Natalie Pace Financial Empowerment Retreat. April 24-26, 2021. Call 310-430-2397 or email info@NataliePace.com to learn more. Receive the best price when you register with friends and family.

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

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