During your adolescent to teenage years, there were things you needed or wanted that you spent your money on, whether it was allowance money or … As an adult, you look back on those things and wonder why you wasted your money on those senseless things. Well, the reality of wasting money on senseless things is that it’s not just something that only happens during your adolescent and teenage years… making spending mistakes is something that goes with you well into adulthood.
The funny thing about these spending mistakes is that the majority of the times when we make them, we don’t even realize we’ve made them. There are, of course, common money mistakes to avoid… you know, those “in your face” mistakes that you know not to make. But then there are those spending mistakes that aren’t as easy to recognize off-hand… those are the ones that are the trickiest to avoid.
The thing about these unrecognizable wastes of money is that they’re typically not a decision you’ve made on your own by choice. These types of spending mistakes are usually pushed on you by sales reps… they’ll tell you all these reasons why you need a particular product or service, and the next thing you know, you’re paying for volcano insurance even though you live in Florida!
The silver lining in these spending mistakes is that you can breathe easy in knowing that no one is perfect and as a non-perfect human being, you’re going to make mistakes, especially spending mistakes. The important thing is to learn from those mistakes when you make them.
Prevention is Key
As mentioned earlier, it’s hard to tell sometimes that you’re making unnecessary spending mistakes because they’re not as obvious to distinguish. On top of that, you have a sales rep in your face telling you just how much you need a particular product or service… The pressure can be so overwhelming that you just give in and say “okay… I’ll take it!” Even though that little voice in the back of your mind is telling you that you probably made a big mistake.
Well, in life, sometimes you need a cheat sheet for certain things and a cheat sheet for spending mistakes is definitely one that everyone can benefit from but it’s especially beneficial for the spending mistakes that you don’t even realize are spending mistakes. So, to help you in the fight against those “not so obvious” spending mistakes, here’s your cheat sheet to avoid making them.
The “Not So Obvious” Spending Mistakes
Spending Mistake 1: Rental Car Insurance
When you go to order a rental car, the rental car agent will ask you if you want to purchase rental car insurance. In your mind, you’re thinking “I better get some because this isn’t my car”… But the reality is that rental car insurance is very unnecessary.
Depending on who your personal car insurance is with and if you have full-coverage or not, your personal car insurance should still insure you, according to Dave Ramsey, but check with your car insurance company first. Also, a lot of the times, credit cards offer rental car insurance as well so check the card you plan on using to book the rental before you agree to anything.
Spending Mistake 2: Buying New
Subconsciously, we buy everything new without even considering the alternative of buying used. We have it in our heads that new is better but fail to realize that new is also a lot more expensive. There are tons of products you buy used that serve the same functions and services as if you bought it brand new.
For example, did you know you can buy a pre-owned phone and it works and functions just like a new phone? The same theory applies to cars as well… you just have to make sure you’re going through trusted companies. If you’re considering venturing into the world of “used,” do your research on the company. There are certain companies that are, of course, sketchy but there are also tons of legitimate businesses that truly want to give you great quality products at an affordable price.
Spending Mistake 3: Extended Warranties
How many times have you made a big purchase and the sales rep or store clerk asked you if you wanted an extended warranty on it? Probably every single time. You’re typically asked this question when purchasing electronics… you’ll even get asked about an extended warranty for blow-up mattresses too!
The whole thing about these extended warranties is that you don’t need them. You may go to the store and buy a TV and the store clerk may ask you if you want to pay an additional $49.95 for an extended warranty on a purchase you made that was only $150. In your mind, you might be thinking “maybe I should get it in case something happens to it.”
Stop right there… no, you don’t need it. You may not want to pay $150 to replace or fix a certain item but if it does break, you could replace it if you wanted or needed to or you could do without it all together but a lot of the times, these warranties are not worth it and don’t even last long enough for something to happen to the product! So, hold on to your money with this one.