Here are a list of some very common mistakes we've all made (or are about to make) and how to prevent them.
Ignoring Time Limits on Introductory Offers. It appears your new cable/satellite provider was very generous and offered you a free sports channel for six months. How thoughtful of them. Flash forward about seven months and you get an overdraft notice from your bank. Impossible, you think. You've been very good about watching those balances. How did that happen? Somehow you translated six months to mean forever and not only did you get hit with a $49.99 increase in your bill, you also got hit with a $30 overdraft fee, too. Oh, the pain. If you leave it alone, your soccer habit is going to cost you $599.98 your budget isn't prepared for, not including all the overdraft fees and hiccups that will cost you.
The fix: Make a notation on your calendar/ budget app for the fifth month. That will give you a little buffer for anything unexpected. Choose to add it to your budget or to cancel the Soccer Channel. Either way, you've given yourself time to figure out your next move and prevent any injury to your wallet.
Ignoring Your Natural Financial Instincts. My good friend Hammond is very careful with his money. He can tell you to the penny what's in the bank. Back in the day, checkbooks were balanced and statements were reconciled. Eventually, it all went awry and Hammond had a few overdrafts as well as one or twelve late notices from his credit card issuer. The reason? He hates (as in H.A.T.E.S.) online banking. Paying with a debit card and then checking the balance later didn't come naturally to him. He isn't the kind of person who scans over emails looking for bills to pay. It would take him a week or longer to round up all the stray receipts and compare it to his online balance. 'I feel like a dinosaur,' he complained, 'but I still use a checkbook register to record everything.' Once he started using the tools he felt comfortable with, things improved. Hey, I'm not knocking it because he hasn't caused an overdraft since President Clinton was in office.
The fix: Figure out what works for you and stick with it. This step often takes a little thought to figure out what is most comfortable for you. Mobile alerts, spreadsheets, old timey bank ledgers, online services, etc. Stop using methods that rub your financial fur the wrong way.
Taking too Long to Pay off Balances. Those 0 % offers are pretty tempting until the time runs out and you're hit with interest fees that back date to the original purchase. For the uninformed, seeing all that interest just suddenly appear on your statement can make you feel positively ill. It's incredibly painful to your wallet and you end up feeling like an idiot for falling for the oldest credit card trick in the book.
The fix: This one takes a little bit of focus and a few minutes. Whether you've charged a new purchase or taking advantage of a balance transfer option, take that amount and divide it by the number of months until the interest kicks in. Don't forget to include some kind of time buffer to account for due dates not coinciding with pay dates.
Not Making Those Returns/Exchanges. I committed this crime just a few days ago. I made a purchase and discovered the item didn't suit my purpose. Did I mention the part where it was a cash transaction and I've thrown the receipt away? Can you say 'you ought to know better?' Sometimes it's just a matter of scheduling. Maybe you're too busy to drop off that return to the post office. And who has time to go back to the store for the refund, anyway? You are now the proud owner of useless stuff and as a reward your bank account is much smaller.
The fix. You are going to just have to bite the bullet and make yourself more accountable. But have no fear, it's not hard. Keep your receipts in a single location until you know you'll be keeping the item. Bundle your errands so make sure the post office trip isn't out of your way. Put the package in your trunk the night if your prone to forgetfulness.
For me the most irritating financial hiccups are the unnecessary ones that I've created all by myself. With a little forethought and a small amount of time management, many of our financial headaches can be completely alleviated.
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