The premise of this series is to find/detect in your household, extra money from different sources that you may never have thought of looking into.
The $1,000 Challenge, Part 1: Find $100 a Month in Your Financial 'Junk Drawer'In the introduction to this series of columns, I promised that many of the cuts to your spending in The $1,000 Challenge would be easy and painless, so let's start by knocking out some expenses you won't miss –- and may not even know you have in the first place. I am talking about the metaphorical junk drawer of every family's finances: miscellaneous spending.
These are the odds and ends that pile up, unseen or at least unconsidered, usually on credit cards or via automated checking account debits. The best part is that since you probably don't think about them, you won't miss not paying them. But you will enjoy the extra money you find.
My real kitchen junk drawer is filled with useless stuff I haven't gotten around to throwing out: broken rubber bands, dried-up tubes of Krazy Glue, and a spare trunk key for my long-gone '76 Plymouth Volare. When I first did this cost-cutting experiment, my financial junk drawer included an unused subscription to Weight Watchers Online, a forgotten e-mail account, an old life insurance policy, a subscription to an online baby-sitter directory, legal insurance, and a storage unit that hadn't been opened since Geraldo ventured into Al Capone's vault.
What they all had in common was that they were automatically charged to my bank account or credit card. This made them easy to overlook each month. I expected that would also make them hard to cut, requiring lots of phone calls and paperwork. But I was wrong: Cancelling them was simple, and I easily eliminated more than $130 a month in spending.
Start by digging out your most recent credit-card bills and bank statements. Comb through them, looking for things like the gym membership you haven't used in three years or the automatic renewal on your subscription to Cat Fancy, even though it's been two years since Fluffy went to that Great Scratching Post in the Sky.
It's harder to stop an automated debit to your bank account, in many cases, than to a credit card. Credit cards offer much more protection, so it's wiser, in the future, to have any automatic charges put on a card, not debited from your checking account.
It can make you feel a bit foolish when you see some of the stuff for which you've been thoughtlessly paying each month. For me, the worst was an old email account I'd kept open after I moved, in case any previous freelance clients wanted to contact me. I'd planned to maintain it for a year, but I hadn't even looked at it for more than 2 years –- at $25 a month.
There was plenty of other unnecessary spending in my family's budget, which I detail in my book, "The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese." Getting rid of those charges was easy, and you can find cheaper options for the things you do use. Make a pact to go walking with a friend every day after dinner, and cancel your rarely used gym membership. In the case of Weight Watchers, I was already attending meetings at work, so I didn't really need the online subscription.
And, remember to come back and post your comments and results. And look for part 2 of this series next Tuesday, when we'll tackle another spending category where you're sure to find easy savings: your utility bills.
Well then KNOWSY Readers, the challenge for household finance detection has been made, are you up to the challenge? We will see, until tomorrow...same time, same channel...but wait wasn't that what the announcer would say on the classic Batman TV series? Ah, yes, and let's not forget he was the Caped Crusader!A Note to Our Readers: Due to popular demand from our readers after we published our preview of this series Sunday, we choose to publish this article -- the first full installment of our 10-week, $1,000 Challenge -- early. The remainder will arrive on Tuesday mornings.