Small money mistakes can add up to big bucks over time. Whether you’re wasting cash through carelessness or ignorance, your bad financial habits could be costing you thousands of dollars a year.
Here are seven of the biggest money mistakes to tackle:
1. Plastic peril
Credit cards are the most expensive form of debt with sky high rates. Pay off your balance in full every month to avoid paying any interest. If you’re struggling to make minimum repayments, consider switching to a low or no interest balance transfer card.
2. Buying brand-new
The worst example is probably a new car: you lose thousands just by driving it out of the showroom. Second-hand isn’t second-best: vintage and antique items are highly desirable these days. Or you can find “BNWT” – “brand new with tags” – items all over eBay and Gumtree, for a fraction of the original cost. And there’s no point spending $30 on a novel you’ll read once if you can get it for a dollar at a second-hand bookshop, or for free at a library.
3. Forgotten funds
Thousands of people lose track of old bank accounts and credit cards. Not only is it a waste of any money remaining in them, but these old accounts could even be draining your funds through annual fees. ASIC estimates there’s $1 billion waiting to be claimed, so try its unclaimed money search tool.
4. Being a pushover
Nearly all prices are open to negotiation, so always bargain for discounts. Many stores will offer to match better prices, or have secret deals up their sleeve. You can haggle on anything from a home loan to a flatscreen TV.
5. Lack of interest
Keeping spare money in a bank account that pays no interest is just wasting money. Although good rates are hard to find right now, if you hunt around you will still find accounts offering over 3%. It only takes minutes to open a new account and transfer your funds. There’s no easier track to wealth than passive income!
6. Power drain
Being greener isn’t just better for the environment, it’s better for your budget. Many people have a spare “drinks fridge” that is only used for parties – leaving it plugged in wastes around $360 a year. New energy efficient lightbulbs also cost 80% less to run than old incandescent bulbs.
7. Impulse buying
Failing to shop around wastes money: whether you’re buying a house or a holiday, always do your research and never grab the first item you see. Thanks to the internet you can check prices quickly and easily, and it also gives you more time to decide what you really need. Pin “must haves” to Pinterest to indulge your shopaholic urge – a week later, you probably won’t want half of your wishlist.
Being mindful of your money not only plugs leaks, it helps you save for things that are more important to you. Minor mistakes lead to major money wastage: so be smart and save rather than squander.
Are there any other major money mistakes that should be added to this list? Tell us in the comments below.