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12 Simple Costs to Cut in Your Life Now for $13,161.71 in Annual Savings


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It’s shocking how much we spend on “invisible” expenses. These are costs we don’t think about, but which add up to surprising sums over time – sums in the five digits every year and in the six digits when compounded over 10 years. And over 30 years? If you cut these expenses and invest the money in an index fund instead, it’s enough to make you a multi-millionaire.

But these costs are only as dangerous as they are unseen. Pull them from the shadows into the uncomfortable light of scrutiny, and they become easy to eliminate.

If you want to build real wealth, you don’t need a six-figure salary or even extreme budgeting tactics. What you need is a clear budget and the discipline to track your monthly expenses so you can plug the hidden leaks.

Expenses You Can Cut Right Now for Big Savings

Here are some of the most common hidden expenses in your budget and exactly how much they cost you every year.

(Potential earnings represent how much you can accrue over 10 years by investing the money saved on each expense in an index fund earning 9.8% – the long-term average return of the S&P 500.)

1. Soda & Other Sweetened Beverages

Soda Colorful Different Flavors Glasses Ice
  • Annual Cost: $2,238.80
  • Potential Earnings Over 10 Years: $36,901.55

Americans blow a shocking amount of money every year on sweetened beverages. These beverages make up the second-highest grocery expense, at 9.3% of grocery spending, among recipients of Supplemental Nutrition Assistance Program (SNAP), better known as food stamps.

But sodas and other sweetened beverages are not a vice of low-income families alone. According to a study by the U.S. Department of Agriculture (USDA), families not participating in the SNAP program still spend 7.1% of their grocery bill on sweetened beverages. That comes to an average annual expense of $2,238.80.

The worst part is that we don’t even realize this because we lump these purchases under the wholesome-sounding “groceries” label on our budgets. Stop drinking sodas and other sweetened beverages, and not only are you far less likely to develop diabetes, but you’ll also save thousands of dollars every year.

While you’re at it, look for other ways to save on your grocery bill to supercharge your savings. My favorite is using apps like Fetch Rewards and Ibotta.

2. Bottled Water

Bottled Water Table Desk
  • Annual Cost: $400
  • Potential Earnings Over 10 Years: $6,592.32

If you were to guess, how many times more expensive would you estimate that bottled water is compared to tap water? Ten times? Fifty times?

According to Business Insider’s calculation, bottled water is roughly 2,000 times more expensive than tap water. The bottled water industry even has its own trade group, the International Bottled Water Association, which is quick to brag that bottled water is a $16 billion industry in the United States.

By The Water Project’s estimate, American households consume around $100 worth of bottled water per person, per year. That means that a family of four spends $400 per year on bottled water when they could be spending pennies on tap water instead. Yes, bottled water is a far healthier beverage choice than sodas or sweetened iced teas, but so is tap water.

3. Wasted & Expired Food

Wasted Expired Food Pumpkin Banana Rotten
  • Annual Cost: $1,405.23
  • Potential Earnings Over 10 Years: $23,714.51

I’m guilty of this one myself. Most of us are.

The USDA estimates that 31% of food is lost every year to waste at the consumer level. That adds up to 133 billion pounds of food, costing $161 billion annually, thrown into landfills. It’s saddening, sickening, and largely preventable.

One tactic I’ve adopted to reduce food waste is planning my meals every weekend for the following week. My wife and I agree on who’s cooking what, on which night, and then plan our grocery store list around that schedule. Our aim is to buy only what we know we’ll cook in any given week. And while some staples are worth buying in bulk at warehouse stores, many items should not be bought in bulk.

According to the Bureau of Labor Statistics (BLS), the average American household spends $4,533 annually on groceries. At a waste rate of 31%, that means the average household throws away $1,405.23 worth of food every year.

4. Work Lunches Out

Business Lunch Meeting Restaurant Salad Breadsticks
  • Annual Cost: $1,976
  • Potential Earnings Over 10 Years: $32,569.97

The average U.S. employee spends an average of $53 per week eating out for workday lunches, according to USA Today. Why do lunches average nearly $11 per meal for American workers? Because they’re ordering the majority of their lunches out, whether at restaurants, fast food joints, or for takeout or delivery.

You can save money by bringing lunch from home. It doesn’t to be the same monotonous brown bag lunch every day; try these ideas to spice up your packed lunches.

My wife and I aim to cook a large enough portion of our dinners that we have leftovers for our lunches the next day. It’s a strategy that’s worked well for us and helped us save considerable money over the last year. Also, restaurant meals are not only far more expensive, but they’re also far less healthy.

At an average cost of $3 per home-prepped lunch, you’ll spend $15 per week on lunches rather than $53. That’s a savings of $38 per week, or $1,976 per year.

5. Coffee Shop Coffee

Coffee Shop Customers Barista Interior
  • Annual Cost Difference: $878.80
  • Potential Earnings Over 10 Years: $14,484.11

A daily coffee habit isn’t inherently evil or expensive, but it adds up quickly when you buy that coffee from a coffee shop rather than brewing it at home or the office.

A “grande” (medium-size) latte at Starbucks costs about $3.65. When brewed at home, the same Starbucks coffee costs $0.27 per cup. That means you pay 13.5 times more to get that coffee on the run.

A coffee drinker who buys one cup out every workday spends $18.25 per week. The same coffee consumption by someone who brews at home or work costs only $1.35 per week. That comes to $949 per year for the coffee-shop consumer versus only $70.20 per year for the home-brewer, or an annual savings of $878.80.

And yes, you can make gourmet coffee at home.

6. Tobacco

Tobacco Nicotine Cigarette
  • Annual Cost: $2,292
  • Potential Earnings Over 10 Years: $37,777.76

Once again, better health and better finances go hand in hand here. Before breaking down the financial benefits of quitting smoking, it’s worth a moment to cite a few facts courtesy of the Centers for Disease Control:

  • Cigarette smoking causes nearly one in five deaths (480,000 total) in the United States every year.
  • More than 10 times the number of Americans have died prematurely from smoking than in all U.S. wars combined.
  • Smoking kills more Americans every year than guns, car accidents, drugs, HIV, and alcohol combined.

Then there are the financial costs to your bottom line. According to, the average cost of a pack of cigarettes in the United States is $6.28. For a pack-a-day smoker, that comes to $2,292 per year. That’s a lot of money to spend on an early grave.

Can you think of a few things you’d rather spend $2,292 per year on?

7. Cable TV

Cable Tv Remote Control Popcorn
  • Annual Cost: $1,274.40
  • Potential Earnings Over 10 Years: $21,005.22

I love a great TV series as much as the next guy. But that doesn’t mean I need to blow over $100 every month on a cable bill.

As Bloomberg reports, the average cable TV subscription in the United States costs $106.20 per month. That’s 11.8 times higher than a Netflix subscription, which is $8.99 per month. Other streaming services come in even lower. For example, Paramount+ and Hulu‘s plans start at $5.99 per month.

There are plenty of reasons to stop watching TV. The average American adult watches over five hours of television every day, according to The New York Times. That’s not healthy physically, emotionally, or financially.

Cut the cord, and instead of blowing five hours every day on television, try making some extra money with one of these side hustle ideas.

8. Landline Home Phone Service

Landline Phone Red
  • Annual Cost: $353
  • Potential Earnings Over 10 Years: $5,818.96

Do you really need a landline?

I haven’t paid for a landline since moving out of my mother’s house in 2003. Between mobile phones and Skype, I don’t miss corded phones one bit. Besides, no one wants wires strewn all over their home, tripping their aging parents when they come to visit and cluttering up the house.

The BLS puts average annual landline cost at $353, which is among the smallest costs on this list. But landlines are also among the least useful items on this list.

If you’re that worried about giving up your landline, read up on the many alternatives to landlines to help ease your concerns.

Pro tip: You can also save more money on your cell phone service by using Mint Mobile or Ting. These companies are significantly less expensive and still offer the same service coverage.

9. Unused Gym Memberships

Empty Gym Weights Treadmill Elliptical
  • Annual Cost: $720
  • Potential Earnings Over 10 Years: $11,867.36

I am a deep believer in the power of exercise to improve your quality of life. Not only do I physically feel better by working out every day, but it also makes me feel more positive and even-keeled emotionally.

But if you’re not using your gym membership, it’s wasted money.

Sadly, that’s the case for two-thirds of gym members. According to a USA Today report, 67% of gym members never actually go to the gym. The same report lists the average gym membership cost at around $60 per month, though many gyms charge a monthly payment of over $100.

If you haven’t gone to the gym in the last month, call your gym right now to cancel your membership. Yes, working out more is a worthy goal. But you can start with free home workouts or inexpensive apps like Aaptiv, and after you establish a track record of working out at your target rate, then you can rejoin a gym if you so choose.

There’s no reason to spend a dime on a gym membership until you prove to yourself that you’ll use it.

10. Checking Account Maintenance Fees

Fees Magnifying Glass Calculator
  • Annual Cost: $186
  • Potential Earnings Over 10 Years: $2,936.08

Big banks tend to charge big fees on everything from overdrafts to new checkbooks. Even worse, they tend to charge hefty fees just for the privilege of using your money.

According to a Bankrate study, the average monthly maintenance fee for interest checking accounts is now $15.50, but it can be as high as $35 per month.

If your bank charges you a monthly maintenance fee, it’s time to change banks. Here are the best free checking accounts available today. Stop the bleeding and keep your money where it belongs: in your bank account.

11. Credit Card Interest

Credit Card Interest Rate Charges Math Monthly Payment
  • Annual Cost: $1,077.48
  • Potential Earnings Over 10 Years: $18,183.82

It’s hardly a newsflash that credit cards charge extremely high interest. Even the lowest-interest credit cards typically charge an APR in the 13% to 16% range.

In fact, average credit card interest rates neared record highs in early 2021 at 20.28%. Some credit cards charge interest in the 24% to 26% range, which is enough to make a mobster loan shark tip their fedora.

According to Experian, the average U.S. household has $5,313 in credit card debt. At 20.28% annual interest, that comes to $1,077.48 in interest payments per year.

If you’re carrying a balance, make paying off your credit cards fast a priority. It’s hard to build wealth when you’re blowing your hard-earned cash on high-interest debt payments.

As an added bonus, paying off your credit card balances every month keeps your credit score high. By better sticking to your monthly budget and paying your cards in full, you can still score cash back and other rewards from the credit card company, all while boosting your credit and personal finances.

If you can’t afford to pay off your entire balance upfront, consider opening a new credit card with a lower rate and an introductory 0% APR period. Do a balance transfer to save you money on interest as you pay off your balance over the next few months.

Pro tip: If you’re struggling with high-interest credit card debt, you might consider a personal loan through a company like Credible. You’ll lower your interest rate and pay down your debt much quicker.

12. Mutual Fund Transaction Fees

Mutual Fund Jar Savings Coins
  • Annual Cost: $360
  • Potential Earnings Over 10 Years: $5,933.68

Every time you buy or sell a stock, mutual fund, or exchange-traded fund (ETF), you have to pay your broker a commission. Depending on who you use as an equities broker, commissions range from free all the way to $19.95 per transaction. These fees are why day trading is so difficult to do profitably.

But even for long-term, buy-and-hold investors, these transaction fees add up quickly. Assuming a mid-range commission of $7 per trade, an investor who dollar-cost averages by buying shares every month will pay $7 per month for every fund they want to invest in.

Selling shares or rebalancing their portfolios incurs additional fees. For example, I like to invest in small-, mid-, and large-cap funds, split roughly 50/50 between U.S. and international funds. At a bare minimum, that’s six different funds. If I were to invest by dollar-cost averaging every month, that would mean $42 in commissions per month.

Some brokerages, such as Charles Schwab, offer commission-free trades on most U.S. stocks and funds. You still need to do your due diligence before buying these funds, but they remain an option.

Similarly, E*Trade and M1 Finance charge no commissions for most U.S. stocks and funds. Other brokerages offer bulk discounts for high-volume traders.

How much you can save depends on how often you invest, how often you sell, and how diversely you want to invest. In my case, I can save around $30 per month by using a commission-free brokerage.

Final Word

If you add up all of these “invisible” expenses, they come to $13,161.71 per year. That’s $1,096.81 per month in unnecessary costs.

This can be a life-changing amount. You could live in a better neighborhood for that sum or send your children to better schools, save a sizeable emergency fund, or buy better health insurance.

Or, if you saved and invested that money, you would be a millionaire within 23 years. The S&P 500 has delivered a return of around 9.8% over the last 90 years. By investing $1,096.81 every month at 9.8% interest, you would have $221,121 after 10 years. After 20 years, you’d have $811,600, and after 30 years, you’d have a whopping $2,376,004.

Not a bad nest egg, especially when you consider that the only cost cutting it takes is drinking tap water instead of sodas and trimming other costs you barely notice.


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G. Brian Davis is a real estate investor, personal finance writer, and travel addict mildly obsessed with FIRE. He spends nine months of the year in Abu Dhabi, and splits the rest of the year between his hometown of Baltimore and traveling the world.