Thrifty Thinking: Money Traps

Kiplinger.com recently ran an article about money traps. I had a chance to interview one of the editors about some of the small ways people waste money.

1) What are some of the most surprising ways people waste money when they think they're making good decisions?

 

(a) Carrying unnecessary debt is one of the biggest ways to waste money. For those who are guilty of mismanaging their credit and getting charged various fees, a quick way to help rectify this is to get a rewards card that actually pays you back. You’ll want to use this type of card for everyday things like buying gas for your car or groceries. The key here is to make sure you pay your card balance in full each month to be able to earn rewards perks, such as getting cash back, earning frequent flyer miles or discounts at various retailers.     

 

(b) With couponing being so big these days, using them unnecessarily is common for many people. This oftentimes leads to consumers looking to get deals for the sake of getting a deal, and not because they actually need a specific item. Of course, if you actually need the item, that’s great. However, if you’re using coupons on things you don’t really need or plan to use in the immediate future -- but rather to have that “I’m getting a deal” sense of fulfillment -- you’re simply spending extra money that you otherwise would not have.  

 

(c) You never want to go shopping – whether it’s at the mall or the grocery store -- without knowing ahead of time exactly what you need. That’s a surefire way to spend more than necessary. A good way to help avoid this is to take an inventory of the items you already have and those that you need ahead of time. This applies to just about any type of shopping that you might do.

 

2) Why should consumers be worried about "small leaks" in their finances?

 

While small leaks in your budget might not seem like a big deal initially, they can add up over time and seriously impact your ability to save. You should always be aware of how much money is coming and going from your bank account. Online budgeting tools, such as Mint.com, help you to do this by linking your bank and credit card accounts, and keeping track of your spending and saving habits with very little effort on your part.

 

3) What should consumers consider when looking at whether or not to bundle telecommunications bills?

 

If you’re paying separate bills for services, such as cable TV, home phone or the Internet, it might be a smart choice to bundle those together with a single provider, if possible. There’s a good chance you’ll get a discounted rate and it’s much easier to pay one bill, rather than three separate ones. Another plus side is that should you ever have any technical or billing issues, there’s just one number/company to call for help.

 

4) How can people make sure they're saving money when shopping online?

 

An easy way to score some extra money off when buying something online is to simply do a quick Google search to see if there are any online-only discount promo codes that you might’ve missed, before checking out.