We all have occasional splurges every now and then. We know they aren’t great for the budget, but we’re fully aware of where that money is going. However, what about the purchases that you aren’t mindful about? These are the things you are buying that send your dollars down the drain, without you even realizing it! The CGS Team is sharing 6 ways you’re mindlessly throwing money away. When you know better, you can start making a change!
Common ways you are mindlessly throwing money away…
#1 Late Payments
One of the easiest ways to throw your hard-earned money down the drain is by forgetting to make a payment on time, especially for your credit cards. The average late fee for most credit cards is $37. That is a huge amount of money to give to a lender, because you forgot about it. Avoid forgetting about payments by having your bills set up for automatic bill-pay. Most banks offer the service for free, or you can set it up directly through the company that you are paying every month.
#2 Forgetting about your FSA
If you signed up for an FSA or HSA, then good for you! Are you forgetting about it though? When you have to shell out money for co-pays, new glasses, contact lenses or any other health or medical related expense, make sure you are using your FSA or HSA. It’s extremely important not to forget about your FSA because you will lose that money at the start of a new year. HSAs are usually for life, so you don’t technically lose that money. However, if you keep forgetting about it, you are using your own money when you don’t need to!
If you haven’t signed up for an FSA or HSA, but you spend a lot on health and medical expenses, you may want to consider it the next time open enrollment for benefits rolls around. Get familiar with FSAs and HSAs in the Health Benefits Basics article.
#3 Failing to Shop Around
When it comes to insurance, major purchases, or just about anything, if you aren’t shopping around for the best deal, you are throwing money away when you don’t need to. Being smart with your spending means that you are weighing every option available before making a purchase. Buying on impulse and not thinking through your purchase could result in you spending more money than necessary. Make it a habit to always shop around for the best price with anything that you buy.
#4 Checking Account Fees
I’m giving you the benefit of the doubt with this one! If you are paying checking account fees, which include but are not limited to: ATM fees, monthly maintenance fees, minimum balance fees, or excessive withdrawal fees, you are mindlessly throwing away money. You do not have to accept paying for your checking account!
There are plenty of free options when it comes to your banking needs. Credit unions are notorious for being fee-free and offering a variety of benefits that most major banks can’t. You also have the option to bank with online banks like Ally or Barclays. Online banks don’t have fees associate with their accounts, and they offer amazing interest rates on their savings accounts.
#5 Not taking advantage of your Retirement Match
Not having enough money is an unacceptable excuse for not taking advantage of your employer’s 401k match. When you fail to contribute to your 401k plan, up to the amount your employer will match, you are throwing away FREE money! Not only are you skimping yourself by failing to contribute to your retirement, but you are missing out on the opportunity to make a lot more money in the long run.
$50-$150 a paycheck may seem like a huge hit, but if that money has the chance to be invested and grow, you could be left with a lot more than you think. Don’t believe me? Read 7 Reasons to Start Saving for Retirement Early to see exactly what I mean.
#6 Never buying Generic Brands
I’m a firm believer in “you get what you pay for”, however if I have the opportunity to pay 10-50% less for something, just because of the name, you better believe I’m taking the generic name! When it comes to most generic brands, they usually have the exact same ingredients – or very close. In those cases, I will take generic brand over name brand any day.
In cases where I notice a significant difference in ingredients or how something is made, I will go with the better-quality, name brand item. It certainly doesn’t make sense to buy a cheap item over and over again because of the price. If something is of good quality, just doesn’t have the name brand, I’ll take the savings any day!
Related: 7 Ways You’re Wasting Money
The best spender is a smart spender! Proper money management starts with you know exactly where your money is going. Any chance you have to stop mindlessly throwing money away, you should take it. Did this list help you pinpoint any missing money areas in your life? Are there any other ways people could be mindlessly throwing money away? Leave a comment below to share your thoughts!