Everybody feels lazy from time to time but when it comes to your money, having a slacker attitude could cost you quite a bit. If you’re somewhat of an underachiever where personal finance is concerned, taking a look at where your biggest money leaks are may motivate you to turn things around. Here are five ways you could be shrinking your bottom line without even realizing it.
Find out now: How much do I need to save for retirement?
1. You Don’t Pay Attention to Your Credit Score
Your credit score carries a lot of weight. Not only does it determine whether you qualify for loans or credit cards, but it also shapes how much interest you pay on what you borrow. Not taking the time to check your score or build your credit can cost you in more ways than one.
For one thing, you could be denied new credit altogether. If you need a loan and the bank won’t help you out, you may have to turn to a high-priced payday lender to get the money you need. Even if you can get traditional financing, chances are you’re going to pay a lot more in interest if you have a poor credit history.
2. You Throw Away Money on Fees
While most people view big expenses like their mortgage or insurance as the biggest drain on their income, the smaller costs can chip away at their earnings, too. Fees from banks and other accounts are easily overlooked, but they can nickel-and-dime you to death if you’re not paying attention.
If you’re just skimming your bank, credit card or investment statements each month without looking at how the fees break down, there’s a good chance you’re shortchanging yourself. Letting your bank account slip into overdraft, for example, may not seem like a big deal, but it can cost you $30 to $35 for each returned item. That’s why it’s a good idea to keep a close eye on your balances.
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3. You Don’t Shop Around
Shopping for bargains is easier than ever thanks to the Internet. You can compare prices online, download coupons and promo codes and score even more discounts using mobile apps. If you’re too lazy to do any of that, you’re likely going to end up paying more for the things you buy.
4. You’re Not Organized
Developing a system for keeping track of your bills and managing receipts for deductible expenses takes time. But your wallet will thank you for making the effort. If you don’t know when your bills are due, you might get hit with a penalty. If you’re late on a credit card payment, you could see your interest rate spike up to the default rate, which on average is nearly 30%.
The cost can be even higher if you’re not prepared at tax time. If you don’t have receipts or other paperwork to back up your deductions, you’ll miss out on the chance to write off those costs. Even losing one deduction can have a big impact on what you end up paying the IRS.
5. You Settle for Less on Your Savings
Stashing away an emergency fund for rainy days is a smart move. But letting your savings languish in an account that’s earning a low rate of interest isn’t. Opening up an online savings account or setting up a certificate of deposit may require a little more work than just parking your cash in a traditional savings account at your local bank. But the tradeoff is a better interest rate.
Related Article: Top 5 Reasons to Have an Emergency Fund
Ditching your lazy ways may be difficult to do at first. But it’s a must if you’re tired of your money trickling away. Once you start taking a hands-on approach, you might see those lost dollars and cents find their way back into your bank account.
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