Top 5 Expenses Straining Your Cash Flow

Young adult man sitting at dining table on laptop

My family is composed of creatives, entrepreneurs, and gamers. So when it comes to the exciting world of income taxes, auto insurance, and savings accounts, I am often their first call. 

A recent one came from my little brother asking about credit card rewards. When he said he was carrying a balance on his card, I told him he wasn’t allowed to optimize rewards while forking over 25% in annual interest. He left with homework to focus on paying his cards off in full each month, then we could compare rewards programs.

That call got me thinking about the little things I see in people’s budgets that are often “silent killers” – fees and expenses that may seem small at the moment, but over time can lead to such unnecessary waste. These costs don’t discriminate with budget size – if you’re reading this, chances are you are paying the price for at least one of these.

Here are my (completely subjective) top 5 offenders, in order of egregiousness:

1. Credit Card Interest

Charging annual interest north of 20% often makes credit card interest the largest culprit of wasted money. If you carry a balance of $6,194 (the average credit card debt Americans carry), a 22% interest rate means you pay over $130/month in pure interest. 

How can credit card companies charge these rates? 

Simple: Credit cards are unsecured loans, which means there is no collateral to collect on that lending. Since some users default on their credit cards, companies pass those costs on to all borrowers. But mostly it’s because credit card companies want to make money – and you, dear reader – are their mark. 

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2. Timeshares

Ever wonder what the secondary market is like for timeshares?

It’s terrible.

The market is so saturated with buyers desperate to get out of their timeshares that they can end up paying companies to take a timeshare off their hands! Add in an average price tag of $24,120, limited flexibility for booking an actual vacation, and aggressive sales tactics (“Come stay with us! Listen to our sales pitch all day!”), and you’re stuck with a truly inflexible, expensive asset. 

Anytime it’s easier to get into a purchase than out of it, be careful.

3. Public Storage Fees

Americans have too much stuff, and rather than turn to our good friend Marie Kondo for purging inspiration, we prefer to pay money to store it. 

For a really long time. 

At an average monthly rental rate of $180, long-term storage can really add up. Those storage units seem innocent enough until you realize most stuff that you store on a long-term basis are things you don’t actually need or want anyway. 

If you can live without it for a year, it’s probably best to get rid of it for good.

4. Extended Warranties 

It seems like you can get an extended warranty for just about anything today, from large purchases like cars to a small rice cooker on Amazon. 


Since they typically pay out far less than they take in, sellers of these products make a ton of money on commissions. My philosophy is take whatever you would pay for the extended warranty and save that into your emergency fund. Ultimately, if you can’t afford to replace what you are buying (including your car!), you probably shouldn’t buy that item in the first place.

5. Cell Phone Insurance

I recently upgraded my cell phone after several years and found a “protection fee” added to my monthly bill for $17/month. This felt absurd. Can we all agree to stop this madness and just buy a good screen cover and case? Or maybe a cheaper phone that doesn’t cost so much to replace? 

Cell phone insurance is super expensive and policies can be complicated to navigate since they often carry deductibles and limit the total number of phone replacements. The bottom line again is – if you can’t afford to replace it, don’t buy it.

Other Expenses Killing Your Budget 

While some of these expenses can set you back five figures, others erode cash flow in a slow drip. There are many other items that didn’t make my top five, and others that I have a personal vendetta against (I’m looking at you, restaurant cheese boards), but these are the top ones that really stick out.

What are your personal silent budget killers? Are they overdraft fees, low deductible auto insurance, rental car insurance, insurance policies you no longer need? Are they food waste, activities your kids hate, checked bag fees, or resort fees?

Finding the unnecessary hidden costs in your budget can add up to significant savings over time. Don’t let your cash flow suffer in silence from lack of attention. A mindful review of your expenses can go a long way. If you have questions or are ready to make a change in your money life, reach out to an Abacus advisor today.


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