Five Little Mistakes That Could Be Draining Your Wallet Without Getting You Anything

Posted on: 16 December 2015

When it comes to saving money, so many strategies require you to give something up. You don't necessarily have to move to a smaller house, give up your manicures, or sacrifice your hobbies to spend less. Here are five little money management mistakes that could be draining money from your wallet -- and giving you nothing in return. Avoid them, and you'll save -- without changing your quality of life.

Paying exorbitant fees on your checking account.

Many banks charge you a fee when use an ATM, transfer funds between accounts, and the like. A dollar or two may not seem like a lot when it is deducted from your account, but over time, these charges can really add up. It's worth your while to take the time to find a truly fee-free checking account. You'll likely have better luck looking into online banking accounts, since online banks can operate with less overhead and therefore can get away with charging fewer fees.

If you have to settle for a checking account with fees, make sure they are fees that will apply to you less often. For instance, if you rarely transfer money between accounts but use ATMs often, a checking account with fees for this service is preferable to one with fees for ATM use.

Keeping your savings in an account with a low interest rate.

If you have a substantial amount of money in savings, letting it sit there and earn no interest (or the 0.01% interest offered by many banks) is depriving yourself of the chance to earn a little passive income. Shop around for online savings accounts -- the best ones offer about a 1% interest rate. This might not sound like so much, but if you have $5,000 in savings, earning $50 a year (assuming simple interest) for letting it sit there is a pretty good deal.

Making the minimum credit card payments when you could afford to pay it off.

Obviously, everyone's financial situation is different. If you're in a lot of credit card debt, you should talk to a financial planner to figure out the best repayment option for you. However, if you're one of those people who have a rather small amount on your credit card -- say $200 or $400 -- making just the minimum payments is most certainly a terrible choice. The longer you take to pay off that amount, the more you'll end up paying. Before you know it, you'll have paid $600 for that $300. Make some little budget cuts here and there so you can pay off the card in full rather than making minimum payments -- you'll save so much in the long run and keep your debt problem from getting worse.

Not "shopping around" for insurance regularly.

Homeowners and car insurance companies are always changing the ways they calculate risk and charges. The insurance policy that's most affordable for you one year many not be the one that's affordable the next year. Spending a few minutes looking into different insurance options each year (and then switching to a more affordable one should you find it) is a great way to save. Just make sure that the new policy you purchase offers the coverage you need.

Paying monthly rather than annually or semi-annually.

From insurance to cable to gym memberships, so many services are cheaper if you pay for a whole year or 6 months up front rather than paying by the month. Call the various companies you make payments to on a monthly basis. Ask if they offer any discounts if you pay ahead. Note that sometimes, these discounts are not advertised. Sales associates may only tell you about them if you take the time to call and ask.

Wallets should not leak! Following the tips above, and you'll have a bit more money to go around.