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Watch Out for These 3 Financial Traps

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Watch Out for These 3 Financial Traps

Watch Out for These 3 Financial Traps
February 16
18:09 2019

Even well-intentioned people who plan and budget well make mistakes. You might think you’ve covered every scenario, but you probably have a financial weakness, a sort of Achilles’ heel that can at least bruise your financial well being.

When it comes to finances, it’s important to hunt for ways you might get tricked. It’s not even important if these are the kinds of mistakes you can afford to make — you should know where your dollars go no matter how solid your finances are. These three budget-busting mistakes can hurt your pride, even if your bottom line can handle it.

Little financial mistakes can pile up. Image source: Getty Images.

1. A discount isn’t saving money if you don’t need the item

My 15-year-old son wanted to go to the outlet mall recently, and that’s often a recipe for disaster. Sometimes the prices are low enough that I find myself coming home with things I don’t need. Last time, for example, I bought a new wallet — something I generally only do when the old one has worn out — because it was 80% off, even though my current one was in good shape.

This time we found a rain jacket for my son at a sports apparel chain. It was $17, marked down from $65 — a good deal, but still a waste of $17 if he didn’t need it. In this case, however, my wife had actually taken my son looking for a new rain-appropriate light jacket, so this was a case of saving money on a planned expense that filled a need. (The same could not be said of the 2-for-$30 T-shirts I bought for myself at the same store.)

Which purchases you need to plan for and which can be impulses varies based on your financial state. I’m lucky enough that a few T-shirts won’t impact our cash flow, but buying a computer or TV on a whim because of the discount might.

2. Paying for something you never do

I’m often guilty of buying a coupon for something I think I should do. Maybe it’s a boxing lesson, admission to a museum, or some other positive activity. In theory, because I’ve spent money on the coupon, I should be more inclined to actually use it. In reality, that has not proven to be a motivator for me (yes, I’ve done this more than a few times).

Only spend money in advance for activities you know you will do. It’s better to pay a little more when the time comes then it is to spend money on your best intentions that never come to be (and you feel more guilty paying for a boxing lesson you never take than just not taking a boxing lesson).

3. Ignoring coupons

I’ve never been good with coupons, and I forgive myself when it comes to saving a few dollars grocery shopping. In some cases, however, I’ve ignored 10% off deals on things like replacing our air conditioner and major car repairs.

In some cases the vendor has given me the deal anyway. At other times, I’ve left big money — maybe hundreds of dollars — on the table because I never bothered to look for whether there was a coupon or a way to save money by uttering a phrase at the counter.

Be vigilant

It’s important to know how you spend your money and where you might be prone to making a mistake. If you can identify those areas, you can avoid them. That doesn’t mean you’ll never make a dumb purchase (I have two pounds of toffee purchased on a deal website headed my way to prove that), but cutting down on silly mistakes and avoiding financial traps most of the time can leave you better off in the long run.

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