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When it comes to money, there’s so many ways you can go wrong. Often we overlook some simple ways to save big, simply because we don’t think of them, or don’t know what to look for. This can end up costing you big in the long run.
These 5 simple changes can make a huge difference in your monthly budget, are often overlooked. I too have been guilty of all of these mistakes at one time or another, but by being mindful of them, we’ve been able to stabilize our finances.
1. Paying too much for housing
This is one that no one likes to hear. The unfortunate truth is that housing has gotten expensive, but the other problems is we tend to overextend ourselves in this area. The banks however, are no help in this area. If you apply for a mortgage and the bank tells you the amount you’re pre-qualified for, don’t automatically assume that is what you can (or should) spend. Take a hard, honest look at your finances and make sure that you can truly afford that monthly payment. When Mr. Frugality and I were buying our first house we were pre-approved for nearly $100,000 more than what we should be spending based on the monthly payment we could handle. Had we gone with the amount the bank claimed we could afford, we would have been in the foreclosure situation that millions of Americans have found themselves in. If you’re a renter, consider downsizing or getting a roommate.
2. Paying a bunch of banking fees
Huuuuuge waste of money. Why should you have to pay a bunch of fees to access your own money? Look for a bank with little to no fees, as many banks offer free checking. Definitely make sure you use an ATM that belongs to your bank or you risk getting a double whammy of fees (one from the owner of the ATM and one from your bank!). Also, if you don’t have overdraft protection, see if your bank will allow you to “turn off” your card in the event you are going to overdraw. It might be embarrassing at the store, but it could save you a $35 overdraft charge, which makes more financial sense in the long run.
3. Buying the newest smartphone
Ok, I’ll admit it, having the latest, shiniest, flashiest phone can feel really awesome, but is it worth it? When we bought our previous cell phones, we fell into this trap. It’s “only” $25 per month per phone! That’s not bad, right? That adds up to $600 per phone or $1200 over two years for something that is going to be obsolete pretty much the minute it’s paid off! This time, we waited for a buy one get one free sale, plus a rebate incentive and got our phones for CHEAP. While most companies don’t offer the free basic phones like they used to, you can still save by getting an older model, or a refurbished one and save big money.
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4. Paying too much for gas
Gas can be a real black hole for money if you’re not careful. Make sure your car has a regular tune up, keep your tires properly inflated and don’t run the air conditioner unless you have to. These simple tips can keep the gas consumption to a minimum. Also, don’t fill up at the most convenient gas station: the ones closest to the highway are always the most expensive. Plan ahead and fill up off the beaten path and you can save 50 cents per gallon or more. If your grocery store offers a gas savings program, sign up! If your credit card has one, make sure you use it! It might seem silly but that savings adds up a LOT over time.
5. Not comparison shopping
You might think this is tedious. Perhaps you love the impulse of just clicking “add to shopping cart” without doing your research. But a quick glance around can sometimes mean saving a lot of money. Sites like RetailMeNot have coupon codes you might not have been aware of. By doing a quick comparison, you might be able to get a better deal than what you originally found. Even if you find the lowest price at a store, do a little digging to see if they have any sales coming up. It doesn’t hurt to ask, and it might save you big money even if you have to wait till next week to buy it. Plan ahead for large purchases (think appliances and furniture) and wait till big holiday events like President’s Day or Black Friday to score some of the best deals.
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FAQs
This brief list represents five of the biggest mistakes financial experts say Americans commonly make, and how you might sidestep them.
- Believing an emergency fund is a pipe dream. ...
- Carrying credit card debt. ...
- Putting off retirement saving. ...
- Impulse buying. ...
- Not writing a will.
One of the most common money mistakes that people with less money make is neglecting to create and stick to a budget. A budget serves as a roadmap for your finances, helping you track your income, expenses and savings goals. Without a budget, it's easy to overspend, accumulate debt and struggle to make ends meet.
What is your biggest financial regret? ›
These are Americans' top 3 financial regrets—and how to avoid...
- Regret #1: Living in the moment & not saving enough for the future.
- Regret #2: Overspending & not living within your means.
- Regret #3: Taking on too much debt to reach your financial goals.
- Get professional guidance on your financial plan.
Describe some of the mistakes Americans often make when it comes to money. Getting loans. Buying things they can't afford. Going into debt.
What are financial mistakes? ›
Debt with high interest rates, like credit card balances, can cause major money problems. A lot of people make the mistake of just making minimum payments, which starts a vicious cycle of debt accumulation. One way to avoid making this financial error is to make paying off high-interest debt your top priority.
What are financial regrets in life? ›
According to our survey, the primary regret participants had over the past year was not saving any or enough money for retirement (20%). Other top regrets included not taking advantage of interest-bearing accounts, such as high-yield savings accounts and CDs (16%) and taking on too much credit card debt (15%).
What is one financial mistake everyone should avoid? ›
Excessive and Frivolous Spending
If you're enduring financial hardship, avoiding this mistake really matters—after all, if you're only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever.
Why do poor people save money? ›
Savings act as a crucial buffer: Low-income families with some liquid assets are significantly less likely than their asset-poor counterparts to experience deprivation during stressful events.
What causes people to be bad with money? ›
If you're feeling low or depressed, you may lack motivation to manage your finances. It might not feel worth trying. Spending may give you a brief high, so you might overspend to feel better. You might make impulsive financial decisions when you're experiencing mania or hypomania.
How many Americans live paycheck to paycheck? ›
A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.
1) “I wish I'd had the courage to live a life true to myself, not the life others expected of me.” 2) “I wish I hadn't worked so hard.” 3) “I wish I'd had the courage to express my feelings.” 4) “I wish I had stayed in touch with my friends.” 5) “I wish I had let myself be happier” (p.
How do you recover from a huge financial mistake? ›
Here are 5 steps to help you move forward after a financial mistake and love yourself again:
- Step 1: Acknowledge the mistake. In order to move on, you need to accept and acknowledge whatever financial mistake you have made. ...
- Step 2: Talk about it. ...
- Step 3: Focus on the present. ...
- Step 4: Don't stop learning. ...
- Step 5: Let go.
36% of U.S. adults have more credit card debt than emergency savings, as of January 2023, the highest percentage since 2011. Concerns over job security add additional financial stress. 33% of American workers were worried about their job security, as of April 2023.
Are Americans in trouble financially? ›
Most Americans Are Still Struggling Post COVID-19
Contrarily, the wealthiest 20% of households still maintain cash savings at approximately 8% above pre-pandemic levels. Ultimately, with inflation taken into account, the majority of Americans are worse off financially compared with before the start of the pandemic.
Are Americans financially well off? ›
By the numbers: 63% of Americans rate their current financial situation as being "good," including 19% of us who say it's "very good." Neither number is particularly low: They're both entirely in line with the average result the past 20 times Harris Poll has asked this question.
How are most Americans doing financially? ›
Currently, 72% of upper-income, 42% of middle-income and 25% of lower-income Americans rate their situation as excellent or good. Another question in the survey finds 62% of Americans saying they have enough money to live comfortably, similar to the 64% recorded last year but down from 2022 (67%) and 2021 (72%).
