How confident are you in your financial life? Even if you have no debt, pay your bills in full and on time, and put money in a high-yield savings account every month, you may still be making a few mistakes that are hurting your wallet.
Financial faux pas may happen every now and again but you want to minimize them as much as possible. If you continue to make the same mistakes, you risk your financial future.
Avoid These Money Mistakes at All Costs
This article is going to show you some easily-made money mistakes — and how to avoid them in 2023.
We’ll lean on time-tested strategies from money expert Clark Howard as well as some savings resources from Team Clark. Let’s get started.
Money Mistake #1: Paying Too Much for Cell Phone Service
If you’re paying more than $60 a month for a cell phone plan, you might be paying too much. Some of the cheapest phone plans start at only $10/month for cell phone service!
Even if you require an unlimited data plan, you can save $35/month by switching from Verizon to Visible.
Read our comprehensive guide to the best cell phone plans to see which plan is best for you. And make sure you check the coverage map before you switch your cell phone service!
Money Mistake #2: Paying Too Much for Cable
If you have a ginormous TV bill, you can cut your cable bill by switching to a live TV streaming service. Although services like YouTube TV have increased prices, you can still get a deal with streaming services like Sling and Philo.
To be an ultra-super saver, try a free streaming service. You may find that you don’t need all of the channels that come with cable and other live TV streaming services — and you won’t miss the expensive monthly bills!
Money Mistake #3: Overspending on Your Vacation
Airfares are sky-high right now and are projected to increase throughout the year. If you plan to travel, you should try to save as much as you can.
As the year goes on, you may find yourself being lured by advertisements to destination cities abroad or even closer to home.
If you choose to fly, make sure you don’t overspend. Clark follows one rule when it comes to finding the best travel deals. “It’s really pretty simple: I don’t pick a destination that I have to go to. I wait for a deal somewhere, buy the deal, and then figure out why I want to go there!”
Money Mistake #4: Not Saving for Retirement
Regularly putting something away for your later years is one of the best investments you will ever make. Although there are many savings vehicles to explore, Clark says saving for retirement shouldn’t intimidate you.
“Investing can seem so complicated that you might shut down and do nothing about it — or feel you need to hire someone to guide you,” Clark says. “However, it doesn’t need to be complex. You probably already have the opportunity to get started right where you work.”
He’s referring to a 401(k).retirement plan. If you have a retirement plan at work, check to see if your company offers a match. That’s free money!
Money Mistake #5: Paying ATM Fees
Big banks are notorious for charging fees when their customers use out-of-network ATMs.
Clark says one way to avoid ATM fees is to open accounts with banks that eat the charges for you or give you a certain number of free withdrawals each month. You can often find free ATMs with a simple online search.
Money Mistake #6: Paying With a Debit Card
As you may know, Clark is not a fan of debit cards because they don’t offer the same protections as credit cards. Debit card information is easier for crooks to steal and harder to get back, he says. But just as important as using a credit card is using the right credit card.
Money Mistake #7: Buying Name Brand Over Private Label
One way many Americans overspend at the grocery store is by buying only name-brand items. If you do that, you’re overpaying, Clark says.
Private labels today (think Costco’s Kirkland Signature or Walmart’s Great Value) hold their own against many big brands.
Of course, you always want to shop where the deals are. That could be Walmart, Aldi, Lidl or a similar store.
“But no matter where you shop, the key is to stick to private labels,” Clark says. “I end up shopping in Dollar General a lot and when I stick to the house brand, my wallet really smiles on me!
This guide has more ways to save on groceries.
Money Mistake #8: Paying Too Much for Auto Insurance
Most of us need auto insurance to protect ourselves and others in the event of an accident. But too many drivers simply pay whatever their insurer asks of them and let their coverage automatically renew year after year.
If you really want to save on car insurance, before your coverage expires, compare prices with other car insurers to see if you can pay a lower rate this year.
Money Mistake #9: Buying an Extended Warranty on a Car
Most new vehicles already come with warranties, but dealers push extended warranties onto customers for so-called peace of mind. Do you really need it?
“Extended car warranties and auto repair service plans can be enticing in an era when people are keeping their cars longer. But I say most of the time they’re a waste of your money,” Clark says.
Money Mistake #10: Paying for Old Subscriptions
Do you have an old subscription you don’t even use? If so, that mistake is costing you.
Take the time to itemize your expenses to cut out anything you have stopped or seldom use. No longer a fan of Netflix? Get rid of it. Tired of Apple Music? Cancel it.
Final Thoughts
Simple money mistakes can eat a hole in your wallet if you’re not careful. If you find yourself constantly overspending on the items you buy, it may be a good time to start tracking your spending and budgeting.
