Do you wake up every morning feeling great about the amount of money in your bank account? Does the end of the month breeze by without a single flinch about bill time?
If you answered yes to these questions, congratulations. You are a part of a very slim minority who doesn’t worry about their finances.
For the rest of the world, here are the 12 money mistakes that you need to be aware of. Understanding where you’re going wrong could save you both a headache…and a ton of cash.
Purchasing Extended Warranties
Retail stores know the power of fear. That’s why they want you to buy extended warranties. They know that there’s a slim chance you’re actually going to need to use it, so for them, it’s easy money.
Only use the warranties that actually come with a product or service that you’re buying. And make sure to hold onto the original packaging and the receipt, in case there ever is a problem with your purchase.
Upgrading Too Often
Besides fear, companies also love to play on the human impulse to get the next best thing. But most of the time, these upgrades are perfect examples of the saying “not all that glitters is gold.”
Most of the time, upgrades aren’t as substantial as they’re made out to be. So the next time you find yourself pulled by the siren song of minor updates, catch yourself before you slide your card.
Not Saving For Retirement
You may think that retirement feels like it’s a lifetime a way, but time has a way of sneaking up on us faster than we realize. Don’t fall into the trap of a short-term mentality when it comes to saving for the future. It may not be as glamorous as those instantly gratifying purchases, but it’s a necessity in the long run. Put retirement savings into your monthly budget, and then use the extra cash you make from sites like Survey Junkie for fun purchases.
Paying For Free Services
Companies can put a price tag on anything, if they can appeal to your sense of urgency. But that means that you might be paying for free services more often than you realize. A common example is paying for credit reports through a credit monitoring service that you can actually get for free. A little bit of research and preparation will go a long way in order to avoid making this mistake.
Ignoring Hidden Fees
Besides paying for free services, you may be committing another dangerous money mistake: paying hidden fees. Banks make money by charging fees, which can sneak up on you without your realizing it. When banks charge fees to merchants, the businesses will often pass those fees onto the consumer. Or when you withdraw cash from an out-of-network ATM, you end up paying a fee for the usage. Only use ATMs that are within your network, and keep an eye on your checking account balance to avoid overdraft charges.
They say that the only two things that are certain life are death and taxes, and neither are subjects that we like to think about. But if you routinely avoid thinking about April 14 and put your refund in the hands of the government, you may be hurting yourself in the long run. When you overpay on your taxes, you lose the opportunity to earn interest on the extra money you’re giving to the government.
Wasting food is akin to taking your wallet to the supermarket and dumping wads of cash on the ground. In many places in the world, one meal is a precious commodity. But in America, we have the tendency to purchase more than we can consume. Never buy more than you’re actually going to eat, and follow the same rule of thumb when you’re cooking at home. Next time you go to the grocery store, prepare yourself by checking out this post on how to save money on food.
Not Having a Budget
If you haven’t yet created a budget, you are committing one of the biggest money mistakes out there. And this time, it isn’t the major corporations that are playing on your fear – it’s your own emotions! It’s understandable to want to ignore the numbers, especially when writing it down is accompanied by a wave of anxiety.
But if you really want to take control of your finances, you need to know where your money is going. Take advantage of free budgeting tools and start tracking what you are spending. Once you have a solid idea of your bank account flow, you can start supplementing your budget with creative ways to earn some extra cash. For example, you can sign up for Survey Junkie and start getting paid to share your opinion about products and services. You can become a member by clicking here.
Buying Too Much Insurance
Insurance is another one of those products that maximizes earning by appealing to a fear mentality. Don’t mistake this for thinking that insurance isn’t important. It is, and you’re required by law to have it in certain sectors. But keep in mind that many insurance salespeople work on commission, which means they’re going to encourage you to purchase pricier plans that you may not need.
Not Building an Emergency Fund
Similar to saving for retirement, avoiding building an emergency fund is one of the costliest money mistakes you can make. It’s easy to ignore the hypothetical disasters, but eventually everyone runs up against an obstacle which requires some extra financial cushion. Automate your finances so that your bank transfers money into your savings account each month. This is another time that having a creative source of spending money can help out.
Living Paycheck to Paycheck
A “slash fund” is typically a reserve of money kept hidden for illicit purposes. But when you’re living paycheck to paycheck, this secret wad of cash can take on a new definition. Creating your own hidden fund of $100 or so can come in handy when you’ve got to pay out of pocket for things like car repairs or a surprise bill from your doctor.
If you don’t want to take the money out of your checking account, find other ways to start earning extra cash. When you sign up for Survey Junkie, you can redeem your rewards with cash on PayPal, and put that extra money aside for your extra-cushion fund. Start earning here.
Ignoring Your Credit Score
Do not ignore your credit score! Even though it’s another common source of anxiety to get real about what you owe, it’s crucial if you really want to take control of your finances. Keep an eye on your credit score and use it to develop awareness around your money-spending habits. Then make sure to always pay your bills on time, use only 10% to 30% of the credit available to you, and dispute any mistakes that you find on your credit report.
Are you looking to make a little bit of extra cash that you can use for pleasure instead of dipping into your savings account? Sign up for Survey Junkie today and start earning extra money by sharing your opinion. That way, you don’t have to sacrifice everything while you commit to money-saving strategies. Become a member here. You can also learn more about taking paid surveys by reading this post.
Data Source: forbes.com, lifehack.org