Are You a Victim of the “Slow Leak”?
Updated: Jul 26, 2019
Credit and debit cards are incredibly convenient, aren’t they? We use them for almost everything. The Internet makes it easy to pay for things and even automate our bills. Let’s face it, paper, including the dollar bill, are becoming a thing of the past. On a given day, if you ask me for a dollar bill in any denomination, 9 chances out of 10, I will not have it.
Yes, convenience and ease of use are great, but can also come at a cost. When was the last time you balanced your checkbook? For those who have no idea what I am talking about, when was the last time you checked your bank app? The point I am trying to make is, do you REALLY know what is coming in and going out of your accounts? Have you checked your credit card statement or transactions lately? I do this fairly often, but hadn’t done so for almost 2 weeks with one of my credit cards simply because I do not use it that often. When I finally did a quick check, there were 20 or so transactions I did not recognize! Like anyone, I panicked and called my credit card company. It took close to one month to clear everything up, including the investigation, clearing out the fraudulent charges, and getting a new card. NOT so convenient and NOT so easy.
Well, what if those transactions are actually yours? What do you see? Are there recurring debits or payments? Maybe you see a gym membership you haven’t used in 2 years or an app you subscribe to but completely forgot about? If you make decent money, are not making large purchases, and are wondering where your paycheck goes, you could be the victim of a “slow leak.” Slow leaks are not easily detected and can sneak up on you at the wrong time. When you are ready to make a large purchase, you may not have the money thanks to those pesky items that slowly eat away at your bottom line.
So, what can you do?
1. Take inventory. If you have never reviewed your credit and checking or savings accounts in detail, you will want to look at the last 3 months of statements to get an idea of where money is coming and going. It’s easier if you print and highlight any items in question.
2. Take action! This is the most important. If you no longer use that gym, cancel the membership. If you no longer use the app, delete it and cancel it.
3. Get in the habit! Check your accounts frequently. Once per week is a good start, but a few times per week is preferable. Stay on top of your purchases. Merchants make mistakes, credits aren’t issued as promised, and worst case you find that your account was compromised… 2 weeks later! Learn from my mistake.
Small leaks can add up to big dollars. This money can be re-routed to other, more important goals. Maybe you are trying to build up an emergency account, buy a home or car, contribute more to your retirement account, or save into a college fund for your daughter? Whatever your goal might be, I will bet you can find a few small leaks in your account to help fund a more important purpose. Take the “small leak” challenge today!