12 Ways You’re Throwing Money Away
You probably don’t realize all the ways you’re wasting money or leaving free money on the table — and these little missteps can add up to big dollar losses. Fortunately, once you’re aware of these bad money behaviors, you can take steps to change them. Making small tweaks to your lifestyle and spending habits could pay off in a big way.
Keep reading to find out the costly money mistakes you’re likely making, and how to stop making them so you can keep more money in your wallet.
1. Paying Checking Account Fees
It’s your money, and you shouldn’t be charged to use it. If you really want to take your money further and save, look for a checking account with no fees so your money stays where it belongs — in your account.
An excellent option is to search for online checking accounts with zero fees or account minimums. If you’re wondering how much you can save here, CNBC found that you can save around $15 a month by choosing a no-fee checking account offered by an institution like Ally Bank.
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2. Trying To Time the Stock Market
When stocks are on the rise, it’s tempting to think you’re smart enough to know when to get in and out to make a killing. But this move is one of the worst mistakes rookie investors make.
Experts say it’s nearly impossible to do this correctly every single time. After all, you need to be right twice — when you get out of the market and when you get back in. For example, Business Insider found that the average return for the S&P 500 for the past decade was around 10.2%, so you would’ve likely experienced exceptional growth if you left your money in a simple index fund.
3. Paying Full Price for Gas
Even though gas prices aren’t at their highest, you might not be taking advantage of free ways to drive the bill down further, such as by using rewards credit cards for cash back. Make sure to pay off your balance every month to avoid interest charges or late fees that’ll eat up any rewards you earned.
You can also use the GasBuddy app to find the lowest gas prices in your area. The official website touts that you can save up to 40 cents a gallon with a premium membership. This means that your monthly savings would increase if you constantly put a significant amount of miles on your vehicle.
4. Paying ATM Fees
Another major pain point is ATM fees, which can add up quickly if your banking provider charges outrageous fees for out-of-network use. Business Insider found that you can spend up to $5.50 per transaction with an ATM fee with some banks.
For example, a Bank of America customer would be charged $2.50 for using an out-of-network machine and then get dinged with a $3 fee from the provider. The ATM fees will depend on your bank, so it’s crucial that you review the associated costs.
5. Ignoring In-Store Savings Apps
Many retailers and drugstores, including Target and Walgreens, have smartphone apps that help you find coupons and discounts on your purchases. Ignoring these apps could keep extra dollars on your bill, so pull out the smartphone as you make your shopping rounds. The savings would depend on what you’re shopping for.
6. Dining Out Too Much
Sure, you don’t know how to make Thai food and don’t feel like cooking dinner. But consider how that attitude drains your wallet over time.
Say you eat out for lunch five times a week and spend $15 on each meal. That’s $3,900 you spend a year. By eating out for lunch just two times a week instead of five, you save $2,340.
7. Not Clipping Grocery Coupons
Whether you need to stock up on snacks or cereal, don’t forget to check your newspaper for this week’s coupons. If you don’t have access to the newspaper, check out the store’s circular and other special offers on products you buy every day so you aren’t paying extra on each grocery run.
8. Tapping Your Retirement Fund for Extra Cash
Dipping into your retirement fund to finance emergencies is one thing, but financing a kitchen renovation or taking a cruise with your retirement dough is another. Not only might you run into high penalty fees, but you’ll also miss out on the compound interest you would have earned on whatever money you take out.
If you want to save for a home improvement project or vacation, a better way to do this is with a high-interest savings account. High-interest savings accounts allow your funds to compound at a high rate, but there’s no penalty for making withdrawals whenever you want to.
If you’re wondering about how much money you would be throwing away, the general rule is that when you withdraw funds from your 401(k) plan before your retirement age, you’ll be hit with a 10% penalty and you’ll have to pay taxes on the amount you withdraw.
9. Not Signing Up for Email Offers
When you’ve found your new go-to online retailer for home furniture, personal care items or makeup, don’t pay the full retail price on your first order. Many online retailers will offer a discount on your first order if you sign up for their email newsletter. And other stores send freebies, exclusive discounts and special offers to email subscribers throughout the year.
If you miss out on these offers, you could be paying extra on your first and future orders.
10. Not Using All Your Warehouse Club Benefits
You make the effort to pay your annual membership dues, so take full advantage of warehouse club member benefits — beyond having access to the store. From discounts on eyeglasses to travel, you can save money on a variety of services and products. Review your membership agreement to learn more about perks beyond grocery, clothing and household item discounts available to you.
11. Ignoring Rebate Offers
It’s easy to miss rebate offers that are not heavily advertised in-store circulars or even listed next to an item for sale. But before you make a purchase, ask the retailer if there are any manufacturer’s rebates available. Then, compare prices online and offline so you’re paying the lowest possible price.
12. Gambling
Gambling is widespread in this country, but compulsive gambling is a very real disorder. In fact, according to a National Council on Problem Gambling Survey survey, nearly 20 million U.S. adults report problem gambling behaviors. The simple fact of the matter is that casinos, gambling parlors and sportsbooks aren’t successful because people win more than they lose.
Lou Carlozo and Gabrielle Olya contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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