Vampire Expenses: How to Detect and Control Them
In managing our personal finances, it is important to pay attention to all the expenses we make, not just the ones we have planned. Many times, there are disbursements that go unnoticed and end up affecting our budget significantly. It is in this context that the so-called "vampire expenses" arise.
What are vampire expenses?
Vampire expenses are those payments that are made on a recurring basis, but are not taken into account in the monthly expense planning. These are expenses that are taken for granted, but can increase without warning, becoming a much larger outlay than we had anticipated. A clear example of this type of expense is subscriptions to services that we do not use, but which continue to charge us month after month.
How to detect vampire expenses in your personal finances?
To detect these expenses, it is important to carefully review all bank transactions, both cards and accounts, and cancel those services and automatic charges that we are not using. It is also advisable to establish a limit for fixed monthly expenses, so that we are aware of how much money we are spending on each item and avoid unpleasant surprises.
As for the difference with variable expenses, we must bear in mind that these are small, unplanned outlays that we make on a whim, such as the coffee we buy every morning in the cafeteria at work. Although these expenses do not usually have a big impact on our economy, if they accumulate they can represent a significant outlay.
How do vampire expenses affect businesses?
It is important to mention that vampire expenses not only affect individuals, but also businesses. In fact, some vampire expenses in businesses can be even more costly than those of individuals, especially if they involve high-demand services or supplies, such as power or water.
For example, a business may be paying a flat electric rate, but if it does not regularly monitor its energy consumption, it may not realize that it is spending more than it needs to. This may be because there is equipment that is running unnecessarily outside of business hours, or that is using more energy than necessary. In the end, the company may end up paying more for energy than it should, which directly impacts its profits.
For individuals, vampire expenses can also have a major impact on their personal finances. In many instances, these expenses can go unnoticed due to their low initial cost. For example, a person may subscribe to a video streaming service for a low monthly fee, but if it is not used frequently, they may end up paying more for the service than they actually need.
Another common example of vampire spending is automatic recurring charges, such as subscription services or gym memberships. Many people subscribe to these services without realizing that they are paying for them on a month-to-month basis, even if they no longer use them or have moved to a location where they don't have access to the service.
How to control vampire spending in your personal and business finances?
To detect and control these expenses, it is important to keep track of all bank transactions and regularly review utility bills. It is also important to be aware of the subscriptions or memberships you have and evaluate if you are really using them or if you need to cancel them.
When in doubt, it usually does no harm to cancel a service and see how you get by without it. If you don't notice it's gone, you've just reduced your monthly spending. If you find you miss it, you can always sign up again – and you may even get a discount if you do so.