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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.

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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.

About the author:  Kirsty Lamont is a director of Mozo.com.au which helps Australians compare credit cards, home loans, insurance and other financial products.  Kirsty was one of the launch team for Virgin Money when it started in Australia in 2003, and also held a senior role at BankWest before joining Mozo in 2007.  A consumer finance expert, she has access to Mozo’s up-to-the-minute data about different financial products on offer.

  • Forgotten funds is a big one I think. This article is very interesting with goo information.

    Reply

  • Wonderful tips – I also follow if I haven’t got the money to buy it, don’t put it on my plastic.

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  • Thanks for the great tips, its sometimes good to be reminded.

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  • Great to see some great and original money advice.

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  • Cost saving and sensible tips – thanks.

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  • Great tips, easy to read

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  • So true, thanks for this information.

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  • Thank you for the tips, cheers.

    Reply

  • I try to be ever mindful of my money but still know that I can do better. I have savings, a Debit card that I can use as credit to avoid fees, have a term deposit, am always looking at better ways to nurture/grow my savings, etc. Apparently, we’re doing really well and have no debt, mortgage etc. However, I always feel like I should be doing more.

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  • I have a credit card but never pay interest on it, as soon as I use it I pay it off. I work in the credit card dept of a large bank and I know the stress and costs they can cause!

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  • I’ve just finished reading “The Barefoot Investor” and realized the Superfond my husband had, was ripping us off. Closed it and opened another one.


    • Love this book too – some terrific advice and I generally love finance books.



      • “The Barefoot Investor” is further quite easy to read and with some funny parts too. Who would have said that finance books can’t be funny? :-)


      • My mum gave me this book to read, really interesting and it does help a lot.

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  • Good to revisit these tips and no to plastic is a must.

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  • I dont do many of these and I definitely don’t have a credit card so pretty well on the whole

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  • Interesting! Really good knowledge to know! Thanks for sharing this!

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  • I seriously don’t know how people FORGET about bank accounts! If you can afford to do that maybe you don’t need the money?

    Reply

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