No matter your age or station in life, making good decisions with your money is a noble goal to have as we start a new year.
If you’ve ever made a financial faux pas and learned from it, that mistake may have been well worth it. But 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 2021.
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 (depending on your plan and how much data you use).
One Team Clark member pays less than $20 a month for cell phone service with Xfinity Mobile. The data plan runs on Verizon’s reliable network, but it’s Xfinity’s more than 18 million Wi-Fi hotspots nationwide that can help subscribers cut costs by paying only for the data they use.
Resource: Best Cell Phone Plans and Deals
Money Mistake #2: Paying Too Much for Cable
If you have a ginormous cable bill, an easy way to keep your service but save on your monthly charges is to look into eliminating your modem fee.
If you want to cut your cable bill altogether and explore streaming options, you will probably save even more.
Money Mistake #3: Overspending on Your Vacation
Many of us are still delaying our travel plans because of the coronavirus pandemic. But November’s general meeting of the International Air Transport Association included the prediction that consumer air travel should start to pick up in the second half of 2021.
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!”
Resource: Clark’s Best Travel Tips to Save Money
Money Mistake #4: 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.
Resource: How to Find a Free ATM Near You
Money Mistake #5: 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!
Resource: 20+ Ways to Save at the Grocery Store
Money Mistake #6: Paying Too Much for Auto Insurance
As responsible motorists, we all 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.
Before your coverage expires, compare prices with other car insurers to see if you can pay less for car insurance in 2021.
Money Mistake #7: Paying for Pest Control
Some people give away as much as $300 a year paying for pest control services. You can pocket most of that money by doing it yourself.
Team Clark member Joel says he spends less than $75 on materials to rid his home of critters — and you can, too.
Resource: Easy Steps for DIY Pest Control
Money Mistake #8: 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 #9: Holding On to Gift Cards
Because so many businesses are in financial trouble, Clark doesn’t recommend that you buy gift cards right now. And if you’ve received one, he suggests that you use it fast.
He does have this one exception you should know about:
“There are people buying gift cards to try to help businesses stay open, not intending to use the cards for now, but to just push cash toward companies,” Clark says. “I think that’s fine.”
Resource: How to Sell Your Gift Cards Online
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.
Resource: How to Manage Your Monthly Subscriptions
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 budgeting.
Do you have any other money mistakes you want to share? Tell us in the comments below.