When we’re trying so hard to get through till the next paycheck, it can sometimes feel like we’re caught in a jungle and surrounded by traps – money traps. That feeling is not far off. Despite our best efforts, many of us miss the less obvious ways in which our money leaks out of our hands.
1. Avoid unplanned shopping trips
Unnecessary trips to the store are one of the biggest money wasting traps of all times. Face it; we almost never come back with just that one bottle of milk or loaf of bread. Impulse buying is bad enough. A dollar or two here and there on that extra spoil or suddenly-must-have bar of chocolate or food item you suddenly crave for supper, add up in unnecessary money wastage.
Then add the extra fuel and wear and tear on your vehicle for popping to the store more often than necessary. There’s also the excellent food you fully intended to cook for dinner that might end up going to waste because you simply had to give in to that impulse craving.
2. Wasting money on money
We work hard for our money and try our hardest to make it go as far as possible. Many of us don’t realize how much it costs us to have it and to spend it. How many of us really study our bank statements or check up on the cost of transactions we make?
Often convenience is to blame. We draw money from the nearest ATM even if our bank does not own it; pick a suggested amount from the screen rather than fussing with the “other amount” option – and we wonder why our balance drops so quickly.
Often there are extra charges if the withdrawal amount tops a particular figure (usually just below the amount the ATM tempts you to select), and if it’s not your bank’s machine, it will also cost more. Banks are also a better place for cashing checks than currency exchanges, because of service charges.
Other pitfalls are many annual card fees, service and insurance costs if you keep more than one credit card; account management fees of many bank accounts; and differing transaction fees between banks.
3. Pay on time
Show the same interest in paying your bills on time as whoever is billing you for money will show in your being late. Your interest can save you money, while their interest will cost you dearly over a period.
There is nothing worse than wasting money paying interest because you are a day or two late. Before you know it, you will be paying interest on that interest again and again until the full debt is cleared.
Credit cards are dangerous traps, and drawing cash on a credit card is the worst of all. You will continue paying interest on that money like you do with any purchase till every cent outstanding on the card has been settled.
4. What’s in a name? Brand snobbery can cost you
Sometimes you win, and sometimes you lose when going for The Brand. When buying big items such as household appliances and high-tech equipment, a reputable brand name could be worth the extra money. Then you need something that is likely to last, has a genuine warranty, excellent after-sales service and is easy to repair with parts that are readily available.
These are all factors which are part of the value for the money paid. Saving a few dollars on an item that might outlive its warranty by one day, and be off the market long before then, can turn out to have been a false economy.
When it comes to perishable goods, household cleaners, and fad items, the long-term doesn’t matter. Often a large part of the high price is in the name or packaging. If it’s a fashion item, it needs to provide the right effect and last only as long as the fashion does. Spend more on classics, less on fads.
When it comes to everyday purchases, check out labels for the ingredients you want in the right percentages, rather than assuming big brands will be best. Some house brands are produced by the same manufacturers who produce the big names.
5. Signing up for subscriptions
Subscriptions services seem great when you sign up for them. It’s easy to convince ourselves long enough to sign our names or enter our card details, which by signing up we will change our lives.
We will get fit because we’ve signed membership at the gym or will have chilled evenings watching a variety of TV shows once we have cable, and so on. Or we sign up for massive internet or mobile contracts we don’t really need; jump at the chance to get deliveries of different wines each month – all sorts of subscriptions are available.
When you’ve lost the battle for the remote control and stay staring at one or two channels, why pay for a whole array on cable? If staying in bed late seems more attractive than going to the gym, maybe rethink the gym subscription. Paying for services you don’t need or those that have unnecessary “extras” built in at “no extra charge” (for a higher price) just because they sound good, is falling into a big money trap.
There are times when signing up does save you money. If you watch lots of movies, streaming services are a good move, rather than hiring DVDs, or buying ones you only want to watch once. If you can’t live without a book in front of you, sign up at the library.
6. Wasting money by “saving” it
Using coupons and vouchers is an easy way to save money on something you need and an even easier way to spend money on something you don’t need. So are sales, marked-downs, and exclusive discounts.
Most of us love to feel we’ve struck a good bargain by getting 10, 20 or 30 percent off the price of an item. But we have still spent 70, 80 or 90 percent. If we needed it, that’s great. If not, we have fallen into the trap once again and got a useless item lying around to remind us of our folly every day.
If you can eat, consume, apply or use it straight away, then coupons, vouchers, and discounts are a great way to go to treat yourself to dinner out, buy everyday goods for the home, or add some special touches to everyday fare without breaking the budget!
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