Getting the most out of your home finances very often involves a lot of planning and strategy. But sometimes it’s just a matter of being a little careful about the spending item in the family budget, where many perfectly avoidable things accumulate. And this means, on average, more than 4,500 euros per year for each Spanish family.
This is the calculation of the European savings platform Raisin, author of a study that identifies the main gaps in the family economy and offers some advice to fill them.
“It is indeed not necessary to limit ourselves entirely to consuming responsibly,” underline the Raisin experts. “There are many ways to cut expenses and save without sacrificing quality of life,” they add.
Food waste
Each family spends an average of 625 euros per year on uneaten food, for a total of 250 euros per person. At a national level it represents more than 12,000 million euros. An unnecessary expense “which has an impact not only on pockets, but also on the environment”. To avoid this, Raisin recommends “simple methods” such as “meal planning, making a grocery list and using leftovers.”
Bottled water
Even though practically all tap water in Spain is suitable for consumption, many families continue to choose bottled water. In 2023,Spaniards spent 684 million euros on water bottles.
Avoiding it is indeed easy. Sometimes the solution is to simply go to the tap. In places where the water doesn’t taste great, you can invest in a filter pitcher to purify it.
Phantom electricity consumption
According to the Institution of Consumers and Users (OCU),leaving household appliances in standby mode can cost a family more than 100 euros a year. A phantom expense which at a national level amounts to over 2.1 billion euros, and which depends not only on the number of connected devices, but also on their age.
To avoid this, simply unplug them when not in use and use power strips with switches.
Tobacco and alcohol
Among the useless expenses there is a separate chapter, that of vices, such as tobacco and alcohol, which, along with representing a considerable outlay, represent a danger to health. One in four Spaniards smokes and their average annual expenditure is 1,825 euros.
On the other hand, last year spending on alcohol represented 9,737 million euros.
The reduction of both items does not depend in this case on better planning,but on the desire to stop consuming. Or at least “make small adjustments, such as reducing the frequency of going to bars or choosing cheaper options”, they point out on Raisin.
Finance
Saving on bank accounts that do not bear interest – or that do so at very low percentages – means losing money, especially in periods of high inflation such as those of recent years. In Spain there are around 6.8 billion euros tied up in accounts that do not generate any return.
“For example, keeping 10,000 euros in an interest-free account causes the money to lose value over time, especially due to inflation and the chance cost of not investing it”, underline the Raisin experts, who recommend “investing in savings, term deposits or investment funds.
Monthly subscriptions
On average, every Spaniard spends around 39 euros per month on streaming services. “Many of them overlap, which implies unnecessary expenses,” they warn on Raisin.That’s why it’s a good idea to review your subscriptions from time to time and cancel any that aren’t used frequently before they automatically renew.
As for gyms, around 15% of Spaniards sign up but never go. There are cheaper alternatives, “like exercising outdoors or at home.”
Others
In this chapter,the expenditure on lotteries stands out: 171 euros per year for every Spaniard,which amounts to 3,318 million euros nationally. Rather than investing in a lottery with little chance of success,Raisin recommends “earmarking some of that money in an interest-bearing savings account,which would generate a return and increase the value of your savings over time.”
What are some common financial mistakes families make that lead to needless expenses?
Interview Between Time.news editor adn Financial Expert from Raisin
Time.news Editor: welcome to our segment, where we explore practical strategies for managing home finances. Today, we have the pleasure of speaking with a financial expert from Raisin, which recently conducted a study revealing that Spanish families can save an average of over 4,500 euros a year. Thank you for joining us!
Raisin Expert: Thank you for having me! I’m excited to share insights that could help families manage their finances better.
Editor: Let’s dive into the heart of the matter. Your study indicates that manny unnecessary expenses accumulate in family budgets. Can you break down what some of thes expenses might be?
Expert: Absolutely! One significant area is food waste. On average,each family spends about 625 euros annually on uneaten food,which translates to about 250 euros per person.This adds up to an astonishing 12,000 million euros at the national level.
Editor: That’s a staggering figure! What are some practical steps families can take to minimize food waste and, in turn, cut down on that expenditure?
Expert: Great question! Planning meals ahead, shopping with a list, and being mindful of portion sizes can greatly reduce waste.Additionally, considering creative ways to use leftovers can further maximize your grocery budget.
Editor: You mention that many families don’t have to sacrifice their quality of life to save money. Can you elaborate on that?
Expert: Certainly! The key is smarter spending rather than stringent cutting back. Families can find areas to economize that don’t affect their enjoyment of life. For example, opting for seasonal produce or local markets can offer fresher options at lower prices. Also, it’s essential to prioritize experiences over material purchases when spending discretionary income.
Editor: It seems there are various strategies intertwined with lifestyle choices.What other areas did your study highlight besides food that could lead to financial leakage?
Expert: Besides food, we noticed that many families overspend on subscriptions and utilities. People often forget about unused subscriptions or fail to compare utility providers, leading to high monthly bills. Regularly reviewing and adjusting these services can lead to significant savings.
Editor: That’s great advice! As families begin implementing these strategies, what mindset shifts must they adopt to genuinely transform their financial health?
Expert: A mindset of intentionality is crucial. Families should view budgeting not as a restriction but as a tool for empowerment and wealth-building. Understanding that smaller adjustments can lead to significant changes over time fosters a proactive approach to family finances.
Editor: It sounds like awareness and planning are essential. As we wrap up, what final piece of advice would you give to families looking to gain better control over their spending?
Expert: I would say start small. set manageable savings goals, keep track of your spending habits, and regularly revisit your budget. Over time, you may be surprised at how these small changes can collectively save you a significant amount!
Editor: Thank you for sharing these invaluable insights today! It’s clear that with a little bit of planning and care, families can save a significant amount without sacrificing their quality of life.
Expert: Thank you for having me. I hope these strategies inspire families to take charge of their finances for a brighter financial future.