Saving money is one of those skills that everyone should possess in order to lead a happy and peaceful life. But, even after strict financial planning and budgeting, many people end up spending much money than they are saving due to certain pitfalls. These pitfalls are the mistakes that people make while trying to save money fast and ignoring the smart money saving decisions. Let’s take a look at the top ten money-saving mistakes and smart ways to avoid them.
1.Always Buy the Cheapest
One of the most recommended methods to save money is buying cheap products. But, some cheap products don’t save you money in a long run. Some of the cheaper products available in the market are made of poor-quality materials and do not last long. Thus, you have to buy those products again, which is certainly a waste of money and overspending. So, before buying the cheapest product, it is wise to determine the quality of the product by checking the reviews and ratings. Also, don’t buy cheap underwear, bras, furniture, cookware, bedding, etc. Since, these products are used by us in our daily lives, and using the cheaper quality products may tumble your budget, as well as health and hygiene.
2.Impulsive Buys
Impulsive buying is an enemy of monthly budget or money saving strategy. Most of the people can’t control their impulsive buying urge when they visit a store or a website that offers discounted items. Since, they consider that buying a discounted item is a way to save money, but they often end up buying unnecessary items and spending much money. The trick to overcome the impulsive buying is to give it some thought. If you think about the impulsive buying, then you can realize that urge of impulsive buying is dangerous for your money saving goals. Also, by realizing the consequences of impulsive buying, you can use the simple strategies to avoid impulsive buying.
3.Never Change Bank and Credit Card
Most of the people preach that one must never change bank and credit card as it affects the credit score and credibility of a person. However, the fact is, sticking to one bank or a credit card is like putting all eggs in one basket. You don’t get any benefit by sticking to one bank or credit card company, while switching one will get you some bonus cash or mileage. There are many banks that offer free checking account and a ready-made bank switching kit without any requirements. So, find the profitable bank or credit card company by comparing the fees and facilities offered by the different banks and credit card companies.
4.Cheap Insurances
One of the most common mistakes most of the people do to save money is to choose the cheapest insurances. Insurance act as a shield to protect and compensate the expenditure caused due to certain circumstances such as accidents and theft. Most of the cheap insurances that are available in the market do not provide adequate insurance coverage. Thus, in case of a major financial liability situation, you will have to pay the penalties and fulfill the liabilities or suffer the court case. So, instead of buying cheap insurance, you must choose the insurance policy that offers better coverage as long as it is under your budget, not the cheapest! It is common sense to compare the cost of insurance policies offered by the different insurance companies to find the best insurance policy at lower cost, but how much time are you willing to spend on doing the research? The more research you have done, the best deal you will get. And don’t forget to ask your friends and your colleagues for advices.
5.Stick to One Insurance Company
Most of the people choose to stay with the same insurance company for two reasons. One is that they thought their premium will go down with time. Second, they are too lazy to change. If you think you are going to save some money by sticking to one insurance company for years, you are absolutely wrong. The premium will go up year by year even if your driving record is perfect or you did not file any claim. They won’t give you any reason, and the coverage is still the same. You would end up with $50 to $100 more expensive every 6 months to one year. The only way to avoid this is to SWITCH the insurance company!
6.Pay Bills before You Read It
Most of the people schedule their bill payments via online bill pay method for easy budgeting. However, paying bills before reading is one of the most common money saving mistakes. By reading the bill, you can determine whether the company has charged you for the right expenses. Also, it will help you to determine whether the bill includes any hidden fees and charges. So, always read all your bills, including electricity, water, gas, cable, phone bills as well as bank statement and credit card statement, and uncover the fees you shouldn’t be paying.
7.Never Check the Receipt
It is very common for all of us to put the receipt in the bag or a pocket without even looking at it. But, it is recommended that you must always check the receipt after leaving the counter or getting back to home. To err is human. Therefore, there are chances that the cashier has not scanned the item properly or the cashier has forgotten to deduct the sale percentage from the retail price of an item. So, it is wise to check the receipts cautiously after leaving the cash counter.
8.You think it is cheap, paying $0.99 for an app?
Nobody gives a thought before buying any app that cost $0.99 as it never hurts your budget in a short run. But, in a long run, frequent small expenses often turn out to be one of the reasons for the budget fail. So, before buying any app, you should ask yourself why you need it and how often you will use it. You can also look for the similar free apps that are available for your mobile or computer.
9.Buy 3 and get 1 free – it is not a good deal!
Due to the eye-catching marketing and advertisement methods, it is inevitable to resist the buying urge for most of the people. One of the good traps laid by the business promoters is something like “Buy 3 and get 1 free” offer. These types of offers always cost more than their actual value and do not help in saving money. Say one pack is $10, but you end up getting 4 of them at $30. You really think you saved $10? The fact is you spend extra $20 and every store is happy to see that. So, choose to avoid such offers, unless you are piling up certain product.
10.Pay in installments? You will overspend!
There is no doubt that paying in installments for an item seems less than the onetime payment. But, most people exploit this facility by buying unnecessary items and causing an extra burden on the monthly budget. By committing to pay by installments for any product, you are also spending the money which you don’t have. In addition, most of the installments come with the maintenance and interest fees. So, you must avoid paying in installments for any product or item as it results in overspending.
