7 Totally Avoidable Money Mistakes
It comes a time in everyone's life when no matter how careful we are, we make a mistake, or two, or six. When it comes to money, though, every mistake may literally cost you dear. Here are seven of them, I believe are totally avoidable
No wonder they are mistake number one. Yes, credit cards might help you out when you need to purchase something, but credit card interest is a total rip-off. No wonder these evil pieces of plastic are notorious for being the most expensive form of debt. The worst part about credit card? You can't pay your credit card bill with your credit card *sigh*. To make things easier you should try to pay off your balance in full every month - this way you will avoid paying with interest. Alternatively, try to switch to a low balance transfer card or something of the kind.
Now I don't mean you should bargain for every piece of packaged food you buy from the store, but outside of that nearly all prices are negotiable and when there is no shame in asking, there is no harm done either. When you buy a car, negotiate a rent or a home loan, or purchase things in bulk, there is nothing wrong in asking for a discount or if you can get a more tailored price. The worst thing that can happen is to be rejected and pay that much anyway. Truth is, though, most stores are willing to match a better price and have secret deals up their sleeve. You just need to ask!
This is a mistake in some cases and the tricky bit is identifying when you are supposed to splurge on quality stuff and when you should go with a second-hand item. Remember that second-hand is not second best. When you get out of that mental frame, you will discover a world of opportunity. For example purchasing a brand new vehicle is costly nowadays. Think of whether it is worth paying thousands just to be the first to drive it our the show-room. For a fraction of the original cost and with a little bit of research and patience you can find a quality vehicle in excellent shape that is just waiting to be yours.
Skimping on Quality Materials and Services
Sometimes less is more as noted, but sometimes it isn't. Buying second hand items that are not good quality is equivalent as throwing your money in the bin. Trying to do things yourself and eventually failing to do a good and professional job could too cost you dearly in the end. Consider this example. Your landlord demands a proper end of lease cleaning of the rented property (they all do) and he is keeping your deposit until he sees a properly done job. You, on the other hand, decide you should probably do it yourself to save money and spent twice as much of time as a professional would do, but don't manage to deliver the quality lease cleaners would. At the end your landlord is unhappy and you are a one-third short of your deposit. If you still don't agree think about moving items yourself, instead of calling a company, you risk accidentally hurting your back or twisting your body. This can cost you more than just money - in the worst case scenario it can affect your health long term.
Forgotten Funds and Payments
It has been estimated by ASIC (Australian Securities and Investments Commission) there are more than $670 million forgotten funds waiting to be claimed in Australia alone. The money in any of your forgotten, or abandoned accounts may not be much, but it could do better than just sitting there being of no use to no one. In fact, such accounts can even drain your funds because of their maintenance fees and other taxes. Try to keep all your payments up to date and in order. A huge amount of charges can be accumulated over large periods of time. These are absolutely avoidable.
According to an edited book called 'Success Unlimited', being disorganised is one of the main reasons why some people don't succeed financially and personally are always behind on payments and actual money-making opportunities.
Not Going Green Recycling
Reusing, repurposing and switching to energy and water-efficient devices and equipment isn't good just for the environment. It is good for your finances too. Energy-efficient bulbs, water-saving devices for the toilet (which is accountable for 30% of the household's water) and good insulation can save you hundreds every year!
Last, but not least, impulse buying is a big no-no. Not only you might end up with items you don't need and don't use, but you may regret not spending, or investing the money on something much more useful.
To avoid impulse buying always make lists.
There cannot be too many lists when it comes to shopping. Lists keep you focused, save time and keep you from getting carried away. Unfortunately, the Internet has made it easy to impulse shop online. Install a browser extension that blocks some ads and always wait a little while before making a purchase. You can add desired items to Wish Lists and check them a few days, or a week later. You will notice you neither like, nor need these as much as you thought! Hopefully, these make sense and will help you avoid future mistakes in budgeting.
Image Source: Tax Credits