EVERYDAY MONEY WASTERS  How to Plug the Leak That cost you thousands

Dear Readers-

I found this very interesting article in a Woman’s Day magazine on how to plug the leak on everyday money wasters and thought you might get a lot of information and some good tips from it. It was written by Mary Hunt.

What would it feel like to check your bank balance and find a pile of money? It could happen, and it doesn’t have to involve getting a second job or convincing your family to fast two days a week. Stop wasting money on the nonessentials and you just might see your bank account grow.

Little things that addup

BUYING FROM AN AD ON TV

Face it; Infomercial products are often overpriced and hardly ever turn out to be as wonderful as you imagine. And risk-free trial periods? Don’t believe it. You’ll most likely have to pay the return shipping costs plus a restocking fee—if you ever get around to it.

Plug the leak   When you are tempted by an Infomercial product, look up the item on eBay. You’ll be shocked to find dozens at a fraction of the price, because that is where many returned ones get unloaded. Ask yourself, why so many returns? By then the Infomercial and the impulse should be over.

How much can I save?  How about two easy payments of $49.95? Plus shipping and handling.

IMPULSIVE CRAFTING 

Remember those beading materials that you bought because you were sure you would love it? They are now sitting in your basement or garage. Or the scrapbooking collection that seemed so perfect when you attended a home party? Did it even make it out of the bag?

Plug the leak  Instead of jumping in with both feet, check out a new hobby by signing up for a class. A few sessions will tell you how committed you are. If you decide it’s a go, visit eBay.com, amazon.com/auction and overstock.com/auctions. You will be amazed what you will find on sale from others who were overzealous and bought the whole kit and caboodle.

How much can you save   Yarn to knit a sweater can cost $75.00 or more and that scrapbooking kit costs about $115.00.

BRAND LOYALTY 

Sure, we all have our favorite brands, but paying double for things that don’t really matter adds to one big waste of dinero.

Plug the leak   Opt for the store or generic brand when it makes absolutely no difference – for flour, sugar, salt spices, eggs and meat. For other items such as detergent and pain relievers, read the labels and check ingredients. The generic alternative could be exactly the same and cost half the price.

How much can you save   Generic or store brand items are at least 25% cheaper than their name brand equivalents.

FAT CHECKING ACCOUNT 

Keeping a tidy $5000.00 balance in your checking account might give you a sense of security, but you are wasting money if you are not earning interest on the balance.

Plug the leak   Talk to your bank representative about attaching an online savings account. Now you can move money back and forth as needed.

How much can you save   Keeping $4000.00 in the savings side at 4.20 APY will put $168.00 in interest in to your account annually. (This amount will vary depending on what interest rate your bank or Credit Union pays.)

Mindless wasters

FAILURE TO RETURN  

It doesn’t fit right, the color is wrong, but who has time to trek back to the store? You do. Failing to return shopping mistakes can cost you hundreds.

Plug the leak   If you still have the receipts for all the NWT (new with tags) you’re harboring, try to get a refund. At least try for store credit.

How much can you save     I recently pocked $165.00 by returning a couple of shopping mistakes that had slipped my mind until I began writing this column.

PILING ON LATE FEES  

If you are a late payer, you know we are not talking about chump change. Late fees on credit card accounts, mortgages, car loans and property taxes are so high they’ll take your breath away.

Plug the leak   I’ve said it before, but it is worth repeating – instead of paying at the last minute, call the companies to have your bills systematically paid. Or use your bank’s online bill-paying service. If you do incur a late fee, call immediately. Some creditors will waive the fee if you have a good payment record.

How much can you save   Credit card companies charge as much as $39.00 for paying late. Plus the added amount of interest incurred before the payment reaches them. The typical fee on a mortgage: 15% of the amount due. Ouch!! If your payment is $1200.00 a month that can be as much as $180.00. Talk about OUCH!!

THAT GYM MEMBERSHIP

Want to make sure you never exercise? Sign up for a gym membership and pay $39.00 a month for the privilege.

Plug the leak  Call immediately and see what it will take to cancel the membership. Then work out for free in the great outdoors. Gardening, swimming, etc. If you can’t cancel, see if you can switch to a month to month plan.

How much can you save   $468.00 or more a year.

CREDIT CARD PROTECTION

Paying for credit card theft insurance borders on the ridiculous. You just don’t need it. If your card is stolen, by law the most you will be liable for is up to $50.00 for unauthorized charges made to your account. Some banks waive that and issue you a new card and number. Equally needless is credit card disability insurance that promises to cover your payments if you get sick or disabled. While you monthly payments might be covered, interest will continue to accrue, so the debt will pile up. The company just puts your payments on hold and the balance continues to grow while you are sick or disabled.

Plug the leak   First figure out if you are already paying these silly fees. They’ll appear as “Loss Protection” or something close to that on your statement, and the fee is likely to be $6 – 7.00 per month. If you see it, call and cancel. Ask for a retroactive refund if it is not something you requested.

How much can you save   Approximately $6.95 a month or $84.00 annually.

EXTENDED WARRANTIES

Statistically, if the item is going to fail, it will happen early on. Which means the manufacturer’s warranty will cover it. The cost of an extended warranty, which is basically a service contract, it is mostly profit for the retailer. Since extended warranties are claimed so rarely, the profit margins on them run as high as 40 to 80 percent, according to Consumer Reports.

Plug the leak   Open a special bank account and deposit the money you would pay for an extended warranty there instead of in the salesperson’s pocket. Now if the item fails (and remember, it probably won’t), you have the money to cover repairs. And when all is well, you get to keep the money.

How much can you save  I kept the $495.00 they wanted for an extended warranty when I bought a big-screen TV eight years ago. It is still working perfectly and the warranty period has long since expired.

SERIOUS OVERSIGHTS

Not taking your employer’s match   I’ve said it before but it is so important, I’ll say it again. If you are eligible for your employer-matching 401(k) (chances are good here) but your are not signed up, you are throwing away thousands of dollars. And while you’re at it, sign up for a flexible spending account. You ask your employer to deposit a specified amount of your pre-tax earnings in that account; you can use that money to pay for various expenses, depending on the type of account you have.

Plug the leak  Call HR (Human Resources) immediately to find out if you are eligible for your matching 401(k). If yes, sign up and contribute at least the percentage your company will match, more of you can afford to do so.

How much can you save   One young lady (unnamed) just signed up for her company 401(k). Her employer’s contribution to her account (that’s free money) will be $998.00. Even if she only got that same amount every year (doubtful, since it is based on annual salary) at 5% growth, that free money in her account will grow to $142,634.00 by the time she retires.

BUYING TOO MUCH IN BULK

It’s easy to get carried away cruising up and down the aisles at the warehouse club. But the truth be told, if it’s more than you can reasonably use before the stuff turn stale, rotten or passes its expiration date, you are throwing away money.

Plug the leak   Determine how much you really need and then consider the price. If you must buy in large quantities, invest in a vacuum sealing machine or large freezer for storage.

How much can you save   When you buy things in bulk, you can easily save 50% of the full retail price. But you will lose 100% of whatever you pay if it lands in the garbage.

WRONG CELL PHONE PLAN

If you are constantly going over your minutes every month or coming in way under, your plan is costing you way too much.

Plug the leak   Call customer service for a quick review of your last few bills and figure out together which plan would be best. Then every few months, ask yourself if the plan is still right for you.

How much can you save   Over paying by even $200.00 per month is $240.00 a year.

PAYING FOR STORAGE

If you’ve got so much stuff that you need to pay to store it, it’s pretty likely you’ve got too much stuff.

Plug the leak   Take the plunge and unload everything you don’t use or need. Turn what you can into cash at websites like Craigskist.com, eBay.com or Half.com. Have a garage sale. Give things that are still serviceable to the Goodwill, Salvation Army or another charity in your area. Ask for a receipt, the donation amount you can take off on your taxes. Check out a Freecycle.org in your area.

How much can you save    A small storage unit can cost $600.00 a year. A larger unit can cost thousands.

BUYING A NEW CAR

So many of us know it, but we still don’t pay attention: The minute you drive a new car out of the dealership, it can lose up to 20% of its value.

Plug the leak   Give the used car market a fair chance. Rental agencies sell late model, low mileage vehicles at greatly reduced prices. Rental agencies also maintain their cars well, oil changes, etc. Many dealerships offer certified used cars at good prices. A great source for bargains, autotrader.com.

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