We all make mistakes, including when it comes to spending. Some errors seem minor, such as going to a restaurant without realizing they had a Groupon deal. However, even small mistakes can lead to serious money loss and waste.
Let’s make sure you aren’t making those errors, so you can save money rather than lose it. Here are 11 money mistakes almost everyone makes.
Having the Mindset of “It’s Just a Few Dollars”
Imagine this: you stop by Starbucks for a $3 coffee drink. Don’t think, “it’s just a few dollars”. You should frame it this way: “$3 a day is $21 a week. Wow…that’s over $1,000 a year.”
In general, whenever you can cut a few dollars from your budget here and there, do so. You’ll be shocked at how much the savings add up.
Not Doing the Math Before Taking out a Loan (Especially a Student Loan)
If you have kids preparing for college or are thinking about grad school for yourself, you’re probably thinking about school loans. Many people take out school loans, especially for private institutions, but beforehand, you need to calculate how that choice will play out in the long run.
For example, if you take out $100,000 and have a 7% interest rate, you’ll be paying over $1,000 every month for ten years. So only enroll in a school or program if you’re absolutely sure it is the right one for you that’ll produce cost-effective benefits. (A resource such as Understanding Student Loans 101 can truly help.)
Buying New When You Could Buy Used
When you purchase a car and drive it off a lot, it automatically loses much of it’s value and depreciates. It’s why a used car might be a third the price, but it doesn’t mean it’s a third the quality.
It goes for much smaller items, as well. For example, when you buy a mystery novel, you’re ignoring the version you’ve already paid for with your tax dollars, the one on the shelf at the local library. Even Price Checking new items can save on every day necessities.
Not Hiring an Accountant or Personal Financial Planner
I like to take care of as much as I can by myself, however, I do hire an accountant. When tax season comes around, he takes care of all the paperwork and makes sure I don’t miss out on any deductions. Plus, because he’s highly trained in taxes, I’m safe knowing I won’t be pinged for errors I made due to lack of understanding.
Not Enrolling in Retirement Plans and 401Ks
You might not like the idea of letting go of money you’re not benefiting from right now but think in terms of the long run. Your employer may offer a match for however much money you put into your retirement fund now. That money is also tax deductible.
Your future self will seriously thank you.
Not Using a Budget
Make sure to sit down and allot a specific amount of money to spend each month. To help with making a budget, here are the top 5 Tools for Managing & Budgeting Your Money.
Not Being Familiar with Credit
Credit score. Credit report. Do these things sound familiar to you? If not, no worries, but you should get to know it because it’s a serious money mistake not to. Here’s How Credit Scores Work.
Paying for Water
There’s no need to pay $1.50 for a bottle of water. Get a filter installed on your tap at home or use a regular, put-it-in-your-fridge Brita filter to save money on water. Easy money kept in your pockets.
Being the First to Try a Product
It might feel cool to be the first person you know with the latest iPhone or gadget. However, this premium is a money mistake many people make. Wait a few months and the price will already have dropped a lot. Plus, there are often bugs in the first or early edition of a product. Let others test out the bugs, so you can have one that’s been perfected.
Purchasing Food at Theme Parks & Movie Theaters
You’re likely aware of this already, but food at venues such as movie theaters is incredibly overpriced. Don’t pay $3 for a box of M&Ms at the cinema when you can get a wholesale bag at the grocery store for the same price. This money mistake can add up to a scary amount of money per year.
Purchasing Brand Products
Fun fact: Band Aid is not a product, it’s the name of a company that produces adhesive bandages. We have used the brand name so much that it’s become synonymous with the item itself.
As with any brand name item, you’re paying a premium for it. When choosing adhesive bandages, there’s no need to buy Band Aids just because you recognize the brand…that $2 just isn’t worth it. This money spent on brand names is a money mistake almost everyone makes. Stopping is an easy way to save big money fast.