Today’s consumer is much more savvy then consumers of days gone by. One of the reasons is that the Internet allows us to see and compare prices and services much more easily than ever before. That being said, there are still plenty of financial mistakes that many people make that are costing them loads of money. Most of them are easily corrected however and it is for this reason that we put together our blog today, to show you, our dear readers, what some of these mistakes are and what you can do to avoid them. Enjoy.
One huge mistake that many people make is avoiding going to the doctor and skipping annual physicals and dentist appointments. This is not only a classic money mistake but also a classic health mistake as well and one that should definitely be avoided. For example, in the last five years there has been a 16% increase in emergency room visits for dental problems. This could easily be avoided by seeing your dentist the recommended twice a year and, when you consider that an ER visit costs approximately $6500 as opposed to 2 visits to the dentist that cost approximately $600., it doesn’t take a rocket scientist to figure out which choice is best.
Having a yearly physical and getting your eyes checked at least once a year are also vitally important to making sure that any small problems that you may not know about with your health are detected before they become big problems. Not only is it much more economical to treat a health problem when it is small it is also much safer.
Many people like to lease their cars and, for the most part, there’s not a lot wrong with doing so financially. The problem comes when a person has a change in their life or in their job during the time that they’re leasing the car and suddenly find themselves driving it quite a bit more. Since most lease arrangements have a yearly mileage of 10,000 to 12,000 miles per year with a charge of $.10 per mile over that limit, a person stuck in a lease may suddenly find themselves paying a huge amount of money to drive their car.
Another big mistake that many people make is that they don’t put enough money away for retirement. In fact, there are many people who put absolutely nothing away for retirement, a mistake that will undoubtedly leave them in a situation that is financially difficult someday. The fact is, with the tax free contribution limit at $17,500 and many employers matching contributions up to 6% of your salary, not taking advantage of this retirement opportunity means leaving a huge amount of money on the table. Even if you are self-employed there are plenty of ways to take tax-free advantage of your money using retirement plans and these plans should definitely be part of your financial planning.
Not having a last will and testament or doing it yourself is a financial mistake that lots of people make. While it’s true that hiring an attorney to draft even a simple will can easily cost $500 or more, the fact is that without a will much of your money and other assets will be lost to court and legal fees. A great example of this comes directly from the Supreme Court of the United States. Supreme Court Chief Justice Warren Burger, a man that you would think would have an incredible amount of legal experience, famously decided to write his own will. When he passed, because of the fact that his will was badly written, his family ended up spending nearly $500,000.00 to get everything sorted out. (If that isn’t example enough for you then frankly we don’t know what will be.)
Many people make the financial mistake of buying health insurance that has the lowest premium. While we will readily admit that having so-so health insurance is better than having no health insurance at all, the fact is that people who purchase health insurance with the lowest premiums usually end up paying more annually for them due to co-pays and costs that aren’t covered. In the end, the premiums may be cheap but the annual cost makes up for it, saving you absolutely nothing.
The last mistake on our list today is using the cheapest moving company when you’re moving long distance. This is a mistake that many people make because they just don’t know how the moving industry functions. The fact is, a moving estimate is just that, an estimate. Most larger, well-known moving companies will send a moving salesman to your house to estimate the cost of your move, including how much weight will be moved and how many boxes that you will need to pack everything. Once your move is finished the actual amount of boxes used and the actual weight of your shipment will be determined and your final price will be based on those specific numbers. If you picked the lowest price but it was the lowest because the estimated amount of weight and boxes were too low, you may be in for a big surprise when you’re moving truck arrives at choose new home.
Think of it this way; if you go to a deli and ask for 16 ounces of Swiss cheese but the attendant gives you 18 ounces instead, you will definitely be paying for 18 ounces (unless you ask them to take 2 ounces away). With moving it’s the same thing. If they estimate that your weight will be 5000 pounds and that they will need 50 boxes and the weight ends up being 5600 pounds and they use 72 boxes, you will need to pay for the extra 600 pounds and the extra 22 boxes. It’s not unfair per se but it can be one heck of a financial surprise when they arrive with the bill. When you factor in that many moving salespeople will underestimate the amount of weight and packing that you have in order to make it appear as if their price is better, you realize how dangerous it can really be to choose the lowest priced mover.
Are you making any of these financial mistakes? If you are we hope that we’ve given you enough advice to be able to stop and set your financial ship straight. Knowing what kind of mistakes you are making is half the battle, the other half is knowing what to do to stop making them. We hope we’ve provided that information and we invite you to come back and visit us sometime soon for more excellent information on all things financial. See you then.