Spending Leaks Can Drain Your Budget


by Samantha Kennedy, UF/IFAS Extension Wakulla County

Spending leaks happen every day and they can be easy to overlook.  Over time, however, they add up to large amounts of overspending which lead to a broken budget.  Identifying spending leaks can eliminate overspending and help keep budgets balanced.

One of the first steps for identifying spending leaks is determining needs versus wants.  People often confuse the two or simply ignore the difference.

The important needs are basic essential things like food, clothing, and shelter.  Wants are those things nice to have but are not essential.

It is important to identify spending leaks and other areas where spending can be controlled before creating a budget.  Trying to go back and plug budget holes afterwards can be nearly impossible.

Also budget a reasonable amount for saving if possible, as this cushion could help with any unforeseen future expenses or be put towards a family vacation.

Recognizing spending triggers can help eliminate spending leaks.  Increased shopping activity based on mood, shopping partner, or frequency of income are examples of spending triggers.  These triggers can lead to unnecessary spending detrimental to keeping a balanced monthly budget.

One strategy to help reduce spending leaks is to avoid being exposed to temptations that lead to overspending.  Stay away from stores except to purchase needed items.  Always make a list and stick to it.  Buying things not on the list is a common spending leak.

Another strategy includes paying with cash and debit cards instead of credit.  Cash and debit cards use actual money to make purchases and do not carry the added cost of interest on each purchase.  Credit often tempts people into spending excessively since the pain of immediate repayment is missing.

Just say no to purchasing low priority items.  That new pair of shoes may be very tempting, but if buying them is not included in the budget or does not contribute to a financial goal, purchasing them is an unnecessary spending leak.

Before making a purchase, it is important to determine if the money being spent should be put to better use, especially if the item in question is a want instead of a need.

Keeping track of daily spending habits is an excellent way of identifying spending leaks.  Make a weekly spending log or pick one up at the Extension office.

Write down each day’s purchases in the log for at least a week.  Do not leave anything out.  At the end of the week, review the log to identify the most common types of purchases, checking to see if any adjustments are necessary.

Research shows it can take 21 days to break an old habit and form a new one, so do not expect drastic changes overnight.  Setting unrealistic goals is a recipe for disaster.  Start small by changing one spending habit, and then move to the next one.  Build a cushion into the budget for a reward when a spending goal is accomplished.

Spending leaks can lead to overspending, but by adopting a few good spending habits, those leaks can be plugged.  Identify leaks, create strategies to reduce them, and put those strategies into practice to create a better, stronger budget.

For more information about budgeting, please contact Samantha Kennedy at the UF/IFAS Wakulla County Extension Service at (850) 926-3931.