Yesterday I made just about the stupidest money mistake one can make.
I was stressed at a convenience store ATM, chatting with a friend about how unwell I was feeling and in my migraine haze I withdrew $100 and walked away without collecting the cash.
Thirty seconds later I realised my colossal blunder and dashed out of the 7-eleven to retrieve my hard earned dollars as fast as my $10 sale ballet flats would take me. But alas! The money was gone. I searched high and low, questioned the old dry cleaning lady standing on the curb with her rail of blinding white shirts, as well as the barista next door, but to no avail.
I mentally beat myself up about this for the rest of the day so by the end of it, I was just plain sad and mad. While not so obvious, there are many more ridiculous financial blunders we make every day, so to make myself feel better by deflection here are five stupid money mistakes you’re probably making, too.
1. Not reading the fine print
This is mostly pure laziness over being a straight out mistake.
People see pretty banner ads with big numbers and percentage signs for cards and accounts that are so attractive that how could they not be a good idea?
But without reading the fine print you’ve no idea what you’re in for and can come out worse off on the other end.
2. Paying for things you shouldn’t
There are some things the world provides you that you simply shouldn’t pay for.
Bottled water is by far up the very top of this list. Say for example, a 600ml bottle of water costs you $2.50 and by all standards people are supposed to drink 2L of water a day, but you’re busy and preoccupied so you only drink 2 bottles.
That’s $5 a day, even if we work on this being only on work days, that equals $25 a week or $100 a month on bottled water. Buy a $10 re-usable bottle from Coles to refill and you’re already on your way to being a smarter, and less wasteful human being.
Other examples are paying shipping for online purchases when many retailers offer it for free, exercise costs – again the gym is good but outdoors is free – and buying books. Be nostalgic for your childhood and sign up for a library card.
3. Spending more than you earn
This pretty much speaks for itself. As a city-residing Gen Y Sydneysider on an entry-level salary I know how difficult it can be to live within your means without the effects of FOMO.
But it’s plain stupidity to think that one day you’ll catch up, one day you’ll earn enough to handle the cost of your lifestyle. This leads to loans and credit cards, which leads to…
4. Believing you’ll pay off your credit card each month
Trust me, unless you use your credit card purely for points and have the mula to pay off what you spend before the due date, this is never going to happen.
The worst mistake you can make is to get a credit card for anything but emergencies and large travel bookings (which you’ve already saved for, because the points really are awesome).
That first ever purchase that you just can’t quite afford but really want and promise you’ll pay back on payday is a slippery slope. Think of it like a financial gateway drug. It’s bad kids, really really bad. Also this is how people drown in credit card debt. K, bye.
5. Not having a budget
I harp on about this a bit, but seriously, none of my friends have budgets. Not to say they’re not all doing fine, but none of us can afford to go ball out on the bar on a Saturday night like we’d like to. Not even close.
Your budget is your monthly money map and you will be lost in numbers without it.
There is very little chance you can do anything but live pay cheque to pay cheque without one, which causes the kind of panic attack inducing anxiety that comes on the 12th of the every month when you realise you have $4 and a pack of gum to feed you for the next 3 days.
If you’re reading this at all you must be some kind of smart, so up your financial IQ a few points by avoiding the stupid money mistakes in life.
Given the first paragraph I get how ironic this may sound (people in glass houses etc), but I’m hoping this means some good will come out of my sheer idiocy. I promise it doesn’t happen often.
Image: Wolf of Wall Street.