Hemorrhaging from Your Capillaries

Over the past 30 years I have given many presentations about money. As a way to describe massive losses of money from small expenditures I coined the phrase "hemorrhaging from your capillaries". Capillaries are tiny blood vessels and it is hard to imagine how you could bleed to death but it's the image I want to create of losing significant cash through passive, unconscious spending on seemingly insignificant items.

Folks meet with me wanting to save for a house down payment, college education or retirement BUT they are living paycheck to paycheck and cannot find those dollars to put towards their goals. To help, I suggest they practice "conscious spending". For one month to pay close attention to where their money goes.

Here are a few suggestion where you might find hidden savings:

- If you take $200 or $500 from your ATM can you account for how you spent that money? Keep the ATM receipt and record your spending on the back of it. Any surprises?

- How much do you spend on lunch out each week? Brown bag it once or twice. Leftovers usually taste better.

- Add up the cost of your daily Starbucks latte. Maybe go to Starbucks MWF and visit MacDonald's TTh.

- How many magazines come into your home? Do you make time to read them all? Cancel one.

- When you go out to dinner and the cute waitress or waiter suggests appetizers, specials, desserts do you succumb and run up a bill that surprises you? Try using cash instead of your credit card to limit how much you spend.

- Does your bank charge you a monthly fee for a checking account? Maybe you qualify for a simpler one with fewer components and no fee.

- Have you added up what you paid in credit card interest? Paying down those cards could free up hundreds of dollars.

I'm not suggesting you deprive yourself; I am recommending that you PAY ATTENTION. Before you can find those dollars to fund your dreams, you must become aware of how you spend your money to avoid hemorrhaging from your capillaries.

Be $ Smart - track your incidental spending to find money to save. Then take those savings and invest them!

Technology to the rescue! Use bank apps.

In order to improve their bottom line, banks have been charging fees on everything. One of the most costly fees is that on overdrafts. Not balancing your check book or keeping a very low balance in your account can push you into overdraft with a big fat fee of $35! Do that two or three times a month and you have the cost of a dinner out.

Take advantage of your bank's app. It allows you to check your balance, make payments, set alerts, etc. Set an alert for when your balance falls below a certain amount to avoid overdraft fees.

Statistics show that the youngest and poorest bank customers are paying the larger share of fees. These are folks who cannot afford to fund the bank's profits. One overdraft fee could buy a bag of groceries. Online banking is giving customers more control. Take advantage of the apps your banks offer to manage your money wisely.

Some features my bank app offers:

- deposit a check by snapping a picture of it,
- send money to someone to pay an IOU,
- transfer money between my checking and savings accounts,
- view my account balance,
- make sure "direct deposit" checks have been credited properly,
- view bill due dates,
- pay bills,
- find an ATM for my bank to avoid non-bank ATM fees.

Be $ smart - Keep more money in your pocket by using bank apps.