These 8 Hidden ‘Money Leaks’ Could be Draining Thousands from Your Budget

Here's how to spot often-forgotten costs and plug them

Cameron Huddleston,

AARP

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Published December 02, 2025

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Do you hear that drip, drip, drip? It’s the sound of money leaking from your budget.

Small charges, recurring fees and rising subscription or membership costs can easily go unnoticed if you’re not scrutinizing your bank statements every month. These leaks may start small, but they can become a torrent over time, sending hundreds or even thousands of dollars down the drain every year.

Here are eight common causes of money leaks and how to plug them before they sink your retirement savings.

1. Automatically renewing your auto insurance

In a 2024 survey by Motley Fool, a personal finance website, 56 percent of Gen Xers and 60 percent of boomers said they rarely or never shop for a new auto insurance policy. But sticking with the same auto insurer year after year can cost you.

A 2025 Consumer Reports survey of 40,000 policyholders found that those who switched insurers after comparing rates achieved a median savings of $461 a year, with 41 percent saving $500 or more.

Allison Baggerly, host of the Inspired Budget podcast and author of Money Made Easy: How to Budget, Pay Off Debt and Save Money, says she and her husband shop around every January to see if they can find a better auto insurance rate.

“This past year, we switched companies and saved $84 a month for the exact same coverage,” she says. “That comes out to $1,008 a year.”

To find better rates, you can work with an independent insurance broker, who will get quotes from several insurers and help you review your options. Or compare quotes yourself using a marketplace like Insure.com, NerdWallet or Policygenius. Use your current policy’s declarations page (also known as the “dec page”) to ensure that when you’re comparing plans, it’s apples to apples.

2. Putting your internet bill on autopilot

You’ve probably been feeling the pinch of rising home internet prices. A 2025 survey by CNET found that 63 percent of adults said they’re paying more for internet service than last year. However, you can often lower your bill if you’re willing to negotiate.

Before contacting your internet provider, gather information to build your case. Baggerly says she called her provider to ask for a better deal when a competitor started offering lower-cost service in her area.

“We told them what the other company was offering and that we would stay with our current provider if they could beat the other company’s low introductory rate,” she says. “That simple conversation saved us $45 a month. Plus, we locked in that lower rate [permanently].”

3. Paying for unused subscriptions

When was the last time you reviewed all of the subscription services you’re paying for? Now’s the time, considering that more than half of adults surveyed in June by credit-building company Self said they have at least one paid subscription going unused.

Jill Sirianni, co-host of The Frugal Friends podcast and coauthor of Buy What You Love Without Going Broke, recently combed through her subscriptions and discovered she was paying for several she hadn’t used in months. By canceling subscriptions to Hulu, Apple TV and an exercise app, she saved $35 a month.

4. Overspending on entertainment

Americans shell out an average of $3,635 a year on entertainment, according to the latest Consumer Expenditure Survey from the federal Bureau of Labor Statistics. Spending on movies, concerts and other activities isn’t necessarily a bad thing, especially if it helps keep you socially engaged as you age. But it’s easy to overspend without realizing it, Sirianni says.

She started making a concerted effort a few years ago to curb her entertainment expenditures by checking her city’s website, Facebook Events and Eventbrite for free and low-cost local activities. “Swapping paid outings for free alternatives has saved me roughly $1,700 a year without sacrificing a full social life,” she says.

5. Overlooking bank fees

Some banks slap customers with monthly service fees, overdraft fees, out-of-network ATM fees and other charges. These could be quietly eroding your account, depending on where you bank. Rocket Money, a budgeting app that helps people monitor expenses and cancel subscriptions, reports that nearly half of its users paid a bank fee in September 2025, with an average fee of $27.

You don’t have to accept fees as the cost of doing business with your bank. “Shopping around is your friend,” says Ted Rossman, a senior analyst at Bankrate. “Plenty of bank accounts don’t charge monthly service fees.”

Tired of paying out-of-network ATM fees? Look for a bank that has a large ATM network or that reimburses customers for using out-of-network ATMs, Rossman recommends.

6. Paying high credit card annual fees

More than a quarter of credit cards from large issuers such as Capital One, Citibank and Chase charge an annual fee for some cards, according to a 2024 report from the federal Consumer Financial Protection Bureau. Paying one might make sense if the card offers a lot of opportunities to offset the fee by racking up points for cash back or rewards, but you could be throwing away money.

“It feels great to watch the points add up,” says Bobbi Rebell, a certified financial planner and consumer finance specialist at CardRates, a credit card comparison website.

“But they don’t always add up to the sky-high fees on some credit cards. Even on some of the more basic cards, if you are paying a fee — or even worse, paying interest — the true value of those points may not be worth what you are paying in annual costs,” Rebell says.

If you have a credit card with an annual fee, run the numbers to see if it’s worth keeping. For example, for a card with a $100 annual fee and a 2 percent cash back rate, you would need to spend $5,000 per year on the card to break even.

7. Leaving FSA funds behind

Most health care flexible spending accounts, or FSAs, operate on a “use it or lose it” basis — you need to spend all the money by the end of the plan year or you forfeit it. Nearly half of employees with FSAs have lost funds as a result, surrendering an average of $441 annually, according to a 2024 study by the Employee Benefit Research Institute.

Make sure you’re not leaving FSA dollars on the table by determining the deadline for using the account’s funds. (Not all FSAs expire at the end of the calendar year.) “There is often a grace period many people don’t know about,” Rebell says. “Find out if you can still submit expenses you incur up to a few months into the new calendar year.”

FSA funds can be used to pay for health insurance deductibles and copayments, prescription drugs, over-the-counter medicine, medical equipment, contact lenses and numerous other eligible items and treatments.

8. Letting gift cards go to waste

A 2024 Bankrate survey found that boomers with unused gift cards, gift vouchers or store credit are sitting on an average value of $227, and Gen Xers have an untapped $255 on average.

“A gift card is real money, and like any other asset, it’s most valuable when you use it intentionally, not eventually,” says Shelley Hunter, director of communications and content strategy at eGifter, an online gift card marketplace.

She recommends keeping physical gift cards where you can see them, such as next to your debit card in your wallet, and setting calendar alerts to use them before they expire. For digital gift cards, adding them to your mobile wallet or making a list of them in the notes app on your phone can help you keep track of them.

If you have gift cards you don’t want, Hunter suggests regifting them.

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Cameron Huddleston is an award-winning personal finance journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. Her work has appeared in Kiplinger.com, Kiplinger's Personal Finance, Forbes Advisor, Chicago Tribune, Business Insider and many more online and print publications.