People struggle with actually taking action and continuously put off small tasks that seem insignificant, but cost them thousands in the long run. Read on if you want to see some Common Money Mistakes and how a little action can correct them in an hour.
Common Money Mistakes: Banking
Abysmal Interest Rates
I am shocked how many people still use traditional banks to house their savings accounts and emergency funds. I just checked and our savings account (that has almost no money in it) gets a WHOPPING .05% at the traditional bank we use for our checking account.
When I first started our Emergency Fund I did some research and found that online banks are a lot more competitive. You can find the best available rates at Nerdwallet.com, many of them have very low minimums and hover around a 1% interest rate. Still not great, but a hell of a lot better than .05%!
I use Barclays (no affiliation) and they have paid out $40 in interest year to date on our $9,000 Emergency Fund balance. It took 20 minutes to setup my account with auto transfers without a single phone call. That’s a free bag of dog food!
Late Fees/Interest Payments*
Last month, I made a mistake reading my credit card bill that resulted in me paying interest! That goes against one of my yearly goals…
At first I thought the bank made a mistake as I paid off my balance in full, but I misinterpreted the closing date for the current month as the payment due date. The interest charge was $25.97, which really pissed me off.
I called the bank quick and decided to play dumb and inquire as to why I was charged interest even though I paid my balance in full. After about 3 minutes the customer service rep explained my mistake, mentioned that I had never had a late payment and promptly wiped the interest charge. I didn’t even have to ask. Awesome.
*Unless you are calling the government – I have not had good luck with those battles
I know a lot of people don’t trust credit cards, and some of my fellow bloggers even stay away from them, but you absolutely need one. It will require you to be responsible but I guarantee with a little discipline and awareness you can do it.
We just paid for 2 round trip flights to Mexico for a destination wedding with credit card points, saving $1,150. On top of that we get a free checked bag and $25 worth of in flight purchases for each ticket. They also gave us 12 free in flight wifi passes – which turn my flight into productive blogging time!
Common Money Mistakes: Employer Benefits/Selections
You will find this on every personal finance blog at least 5 times, but people still don’t do it. It takes minutes to enroll yourself if you select a pre-packaged allocation. Just do it.
For those of you who have a little more time – take a look at this post and make sure your 401k isn’t packed with high expense rations and poor performance.
If you got a huge refund or had to pay in a ton of money, change your tax withholding and try to hit the sweet spot – no refund, no tax bill.
Refunds are a free loan to the government
An unplanned tax bill sucks – I know first hand after last year
Common Money Mistakes: Overpaying
Car insurance companies are battling for your business right now, if you have been a customer for a few years and aren’t getting discounts its time to make a call and ask what your options are. If you current provider is not willing to work with you – finding a new one doesn’t take long.
We use the same agent for our house, cars and personal property and get a TON of discounts. On top of that every 3 years without a claim the rates drop further.
For those of you that still have it, after the awesome introductory period ends and your bill spikes 50% over the next 6 months…. Call the company, tell them you want the introductory rate back. If they say no – cancel the service. If they don’t cave then and there, they will call you back once you actually go through with the cancelation and magically come up with a better deal.
This may not be for everyone, but I am a HUGE Amazon Prime fan. A ridiculous amount of stuff will be shipped to your door step for $99 a year.
We easily save $99 a year by not using our car to run errands. 80%+ of the non grocery items we buy are delivered to our doorstep. Between the free delivery and the low price online, dog food almost pays for our membership itself.
A little bit of action can go a long way, anyone is capable of knocking this list out. Pick the ones that apply to you and stop procrastinating – just do it.
Did I miss any Common Money Mistakes that can be corrected in an hour? Have you had success with any of the above items?
Some products that can help you:
Acorns: Acorns is an automation app that collects and invests your spare change when you make a purchase. I connected Acorns to my checking account and my credit card. If you are interested in trying it, you can use my referral code here (both of us will get $5 in our account)
Personal Capital: Personal Capital has a ton of great Free features, you can track your spending, net worth and even analyze your portfolio. It has top notch security and I am able to connect all of my accounts. Saves a ton of time! (I may be compensated if you use this link)