Three things you're paying too much for

It's easy to say that we spend too much on toys for our kids, buying clothes, or indulging in the latest electronics. All of those are tangible items that we can hold in our hands. It's more difficult to see areas where we overspend when we don't have a visual product in exchange for our payment. Auto insurance, interest rates and entertainment services are some of the most common leaks in a household budget. Take a look at how you can cut costs in these areas.

Auto insurance: Auto insurance rates should be reexamined every year to see that you're getting the most bang for your buck. If you drive an older car, it may not be worth it to have collision coverage which would cover the cost of damage to your vehicle as well as the other party's vehicle. If you have a solid emergency fund, you may be able to afford a higher deductible, thus lowering your premium. If you don't want a higher deductible or reduced coverage, simply call around or use online tools to compare rates. The same coverage can vary by $100 or more from one company to another.

Interest rates: From credit cards to loans, interest rates add quite a bit of cost to the amount borrowed. Your interest rate will depend largely on your credit score. Have you checked your score lately? If your score needs improvement (a score less than 700 indicates room for improvement), work on getting that score up to put you in a better bargaining position when trying to lower your interest rates. If your score is good but your interest rates are still high on a credit card, for example, shop around to get a lower interest rate to transfer your balance to. Loans for homes and some other accounts can be refinanced to get lower interest rates.

Entertainment and communication services: If you're paying for your Internet, TV and home phone separately, you could be paying a lot more money than you need to. Many companies now offer bundling services for significant monthly savings of $50 or more. Of course, you'll get the most savings during the initial 1-2 year promotional period after signing up for services. Even after the promotional period ends, you'll likely be saving a substantial amount from separate services. Do your homework, though. Sometimes it's cheaper to unbundle after the promotional period.

What do you spend too much money on?

Photo courtesy of Neeta Lind via Flickr.