5 Money Mistakes That You Probably Do not Even Realize You Make – The Motley Fool

Surprise! You probably make a lot of mistakes on the money, and they can cost you – like hundreds or thousands of dollars.

Here is an overview of five common and expensive money mistakes that many people commit. See how many applications you are concerned about and how much money you may be able to keep in your pocket (or in your retirement accounts) by changing your habits.

Error # 1: being unaware of recurring charges

This error is easy to commit because it involves largely hidden expenses. Unless you have the (good) habit of regularly checking your credit card bills, you probably will not notice that certain amounts are billed to you regularly – and often unnecessarily. (Worse, many automatic monthly fees also increase over time, which most people do not notice.)

For example, you may have stopped going to your local gym three years ago, but you forgot to cancel your membership, so you paid out more than $ 40 a month. Over three years, this would be $ 1,440. Similarly, you may pay $ 150 or more to your cable company each month, despite the streaming you broadcast. Cutting the cord in favor of paying for some cheap streaming services could save you $ 100 a month – $ 1,200 a year. You can even pay for subscriptions going to a previous address!

Mistake # 2: Staying at work too long

You may think that you have done well to stay in your current position for many years, but to maximize your income, you may want to consider moving on.

according to Forbes"By working for the same company for more than two years on average, you will earn less during your lifetime of about 50% or more."

People of the human resources management company Automatic data processing studied data on 24 million workers and found that workers' wages had the highest increases when they had been in their jobs for at least two but not more than five years.

Another benefit of looking for jobs to increase your income is that it can also increase your Social Security benefits as they are based on your income history. By earning more, you can probably accumulate more money for your retirement.

Mistake # 3: Do not ask for an increase

Job-hop is not for everyone, though. Some simply do not have the guts to do it, or they can just really like the work that they have. You can aim to earn more in your current job by doing a simple thing: ask for an increase.

A recent PayScale survey found that almost 70% of people who requested a pay raise at work had some sort of increase. (And in fact, only 37% of the workers surveyed had bothered to request an increase.)

Mistake # 4: Do not review your insurance regularly

Go ahead and congratulate yourself if you have all the insurance you need – covering your health, your life, your car, your home and even your apartment if you are a renter. But you're not finished. The insurance is not a thing to define and forget if you want to reduce your costs.

Ideally, you should spend an hour or two each year contacting various insurers to review your coverage for each type of insurance and get new quotes. Shopping regularly for better rates can potentially save you hundreds of dollars a year. Insurers use different formulas to determine their rates, and formulas can change over time. Different insurers could offer the best offer depending on the year. Also keep in mind the reputation of an insurer and do not move to another one that is not rated very well.

Another way to save on insurance is to group your fonts. An insurer can give you a discount on all your policies if you are covered by two or more policies. Also think about increasing your franchise. The higher your deductible, the lower the monthly premium. (Just make sure you can afford to pay the deductible if you need it.)

According to Quadrant Information Services, increasing the deductible of your car insurance from $ 250 to $ 500 will save you about 7% on average. Raising it to $ 1,000 can save you 9%, while a $ 2,000 deductible can make you lose 16% of your premium on average. Of course, these are averages and some people will be able to save even more. It is therefore an economy strategy that deserves to be explored.

Mistake # 5: Do not do estate planning

Finally, the last common and costly mistake many people make is to delay estate planning. We must all be attentive to this, and not only when we are nearing retirement. Even if you are still in your thirties, it makes sense to prepare a will, as well as a durable power of attorney for finances, a living will and a power of attorney for health care (sometimes called a power of attorney for care health). Even young people may be suffering from temporary or permanent disability and many people die decades earlier than expected. By putting these documents and arrangements in order, you will save a lot of trouble and potentially a lot of money for your loved ones. Also ensure that your listed beneficiaries are up-to-date for all your financial accounts.

The more you avoid financial errors, the more money you can keep in your pocket or in the trunk of your retirement.