Most people are making subtle money mistakes without realizing how much it costs them. You could be one of them.
Making mistakes is not a big deal, but sticking to them can cause big trouble for you. Smart people learn from their mistakes. So here we thought to make you aware of common money mistakes that you could be making unknowingly.
1. Big Checking Account Balance
If you have huge balances in your checking account, you incur losses without even realizing it. For that money could be put to good use. Instead of letting it sit idle and lose value from inflation, you should invest it in stocks. Get in touch with a financial advisor for safe and lucrative investment options.
2. Being Penny Wise Pound Foolish
You may have likely noticed that people fuss over small details while losing sight of the big picture.
When cutting back on unnecessary expenses, people start with the small ones. However, it would be far more prudent and effective, to begin with, higher costs. So don’t deny yourself that Starbucks coffee if it gives you a buzz and gets you going. Of course, you could make coffee yourself during breaks to save costs. But don’t eschew coffee just for the sake of 5 bucks. Avoid only those items for which you have no real use.
It would be wiser to cut that cable subscription and opt for streaming services. Likewise, if you already have two dozen shirts, you don’t need a new one.
Cut costs by checking up on your monthly bills, health insurance, tax returns, credit card statements, and car payments. Watch out for cheaper and better plans, especially for recurring monthly/annual payments.
3. Paying Credit Card Bills the Wrong Way
If you have incurred steep credit card debt, pay down the credit card with the highest interest rate. People may go for the credit card with the biggest balance. But you can save more money over the long term by aggressively paying back the balance that has the biggest interest rate. While paying back this balance, don’t forget to make minimum payments for other cards.
4. Multiple 401(k)s
People often have multiple 401(k) accounts due to job switching. On average, Americans have up to 5 retirement accounts open.
In case you lose track of an old account, don’t be afraid to contact the HR of your previous employer for account details. You could end up paying multiple fees for multiple accounts, which is unnecessary. To avoid this, consolidate all accounts into a single IRA or 401(k).
5. Not Tracking Small Costs
Make it a habit to record all transactions, no matter how small they may be. This way, you will know exactly where your money is going. You will know immediately when you are spending too much money on a particular category.
With smartphones, there can be no excuse for not recording all transactions.
It is vital to track all costs since they can soon add up if you are not careful.
6. Not Looking for Better Deals
Don’t stay forever with one service provider. Keep shopping around. Look for better deals and switch to them if they make sense.
Don’t hesitate to search for credit cards with better cashback, cheaper insurance, and stores that offer better deals. With so much competition, sellers are striving to outdo one another by extending the best deals. Take advantage of this to save more.
7. Purchasing Extended Warranties
You will probably be better off avoiding extended warranties for cars. These expensive offers often go to waste since more than half of all customers don’t use them. Those who do use them find to their regret that out-of-pocket payments are cheaper than these exorbitantly priced warranties that often go beyond $1,200. And with so much in fine print, there is a good chance that the warranty may not cover you when you do need it.
The same applies to other products besides automobiles. Extended warranties can easily jack up the price by about a third while providing little in return.
8. Going Dirt Cheap
Being frugal does not mean that you target the cheapest item all the time. Doing so can cost you in subtle, hidden ways.
So if you are shopping for a laptop, dirt cheap may not be a good idea because you could end up with outdated tech and awful benchmark performance. Computer manufacturers these days do not hesitate to substantially downgrade performance and quality just to save a few bucks here and there.
This brings us to the next point.
9. Not Doing Your Research
A lot of manufacturers are out there to make a fast buck at your expense. Brands take advantage of customer ignorance by tricking them into buying awful products for what appears to be a good deal. Customers later regret their purchase, but then it is too late.
It is incredible that in this age and era, a lot of budget laptops lack IPS screens. This means horrid viewing angles. Laptops still have hard disks. This is terrible for user experience and performance. Solid-state drives are much better. You can boost performance instantly by switching to an SSD if you still have a hard disk. Likewise, manufacturers have the nerve to still offer 4 GB RAM in this day and age. This no good for multitasking which you will likely do at some point if not regularly. And don’t be fooled if you find 8 GB RAM. It will likely have high latency and low bandwidth – key performance specs that manufacturers do not even mention.
In other words, do your research thoroughly before buying. Chances are, manufacturers are trying to pull a fast one at your expense.
10. Not Using A Really Great Money App
Do you know the biggest money mistake by far? Not using a really cool money app.
A smart money app can help you to save more over the long term. With an app at your disposal, you are more money conscious and have more concern for reaching higher savings targets.
Doctor Money App can help you to save more and aim higher. Whether you have imperfect spending habits or are a frugal spender, the app can always help improve your money habits. Over time, it all adds up. This means financial independence, comfortable retirement, and a safe financial future.