Cash leakage is cash that cannot be accounted for and is often the result of an individual who is financially irresponsible and undisciplined. Recurring withdrawals from an ATM can be a significant factor in cash leakage. How many times has an individual withdrawn $200 or $300 from an ATM, and in less than three days that same individual cannot account for how or where all the cash was spent? Banking fees for overdraft protection and account maintenance may also become costly over time. This can cause a slow erosion of anyone’s finances.
Individuals who know they have sufficient income but find themselves in the negative at the end of the month likely have a cash leakage problem. The first thing you should do is assess all your small expenses, like Starbucks coffee or smoking cigarettes. While these expenses are small, in isolation; they quickly add up over a month, quarter, or year of time.
Delivery expenses for groceries and merchandise can be significant over time. Americans currently spend an average of $157 per month, or $1,884 per year, on delivery fees with Amazon. Consider purchasing merchandise that will qualify for free shipping.
Eliminating the cost for disposable products can also save money over time when the same products used are reusable. Americans typically throw away more than 30% of their food supply. Not only is this significant waste, but it is also very costly. When cooking, limit your preparation to what will be consumed on the first day.
Unused subscriptions for products and services is another source of cash leakage for individuals. That magazine arrives in the mail monthly and is followed by a consistent toss in the/ recycle bin. You have purchased subscriptions for massages, other personal services, and gym memberships, but you do not have the time to use them. Consider regifting these service subscriptions or terminating the service. You may spend a bit more for using the services on an ‘as needed' basis as compared to totally wasting underutilized services.
To schedule a consultation with Nicole Michelle, feel free to connect with her on the Home Page.
Nicole Michelle
Finance and Money Wiz
November 17, 2023
Comments