Being a savvy consumer isn’t easy, and even the dedicated coupon-clippers among us have made some head-smacking blunders. No matter how smart we are, we’re still human and we make mistakes.
It’s okay; most us don’t handle our money perfectly, but you know what they say – fooled me once, shame on you; fooled me twice, shame on me. So here’s a list of the top ten consumer mistakes – and how you can fix them and do better from now on.
Don’t go grocery shopping on an empty stomach
1. Impulse Buying
You know what we’re talking about – going shopping while hungry or upset, or buying ourselves new clothes, gadgets or other things to brighten our mood.
Yes, shopping can actually be a fun activity – but won’t you enjoy it even more, knowing you can afford it and aren’t wasting money? So, make sure to eat before you grocery shop. If you’re stressed, do a workout, watch TV, or talk to friends instead of buying things.
Keep your bills organized
2. Being Disorganized
Do you lose your bills and forget to pay them on time, thus incurring late fees and charges? Such a needless drain on your wallet!
Invest one afternoon in selecting a place to keep and organize your bills. No, you don’t need a fancy wood desk or anything. Really, all I use is one drawer; I mark the amounts and due dates on the outside of the envelope, then arrange the bills by due date. You could just as well use a letter holder if you’re afraid you’ll forget the bills when they’re in a drawer.
Buying in bulk is cost saving but don’t go overboard
3. The Myth of Bulk Buying
Warehouse clubs (and supermarkets and discount stores) make a fortune convincing us that it really pays to buy two dozen paper towels or ten bottles of aspirin at once. Well, sure – if you really don’t shop much. But it’s all too easy to fall into the trap of succumbing to the exciting bulk buy of the week, every single week – and that really adds up.
Yes, the unit costs are lower with bulk buying, but it can tempt you to overspend. Better to buy smaller quantities in that case. Especially be careful with overbuying perishable food. No point in stocking up on fruit, vegetables or milk if you end up throwing it out.
Beware of marketing temptaions
4. Being a Marketing Victim
It’s a dog-eat-dog world out there. Retailers will do everything they can to tempt you to spend. After all, that’s what they’re in business, to make sales. Let the buyer beware!
For example, it’s common for supermarkets to “feature” an item by placing it on display at the end of the aisle or near the registers. Many customers assume this means the item is on sale. Not necessarily so!
Calculate your monthly mortgage payments before you buy
5. Getting Too Much in Hock for Your House
This was a factor in our mortgage crisis and recession – people got larger mortgages than they could really afford, or signed up for adjustable or balloon rates. Before you buy that pricey home, check out Google’s mortgage rate shopping page and calculator, to get an idea of your payments and get the best deal.
And don’t buy at the top of your range. If you’re already struggling with a mortgage, figure out whether it’s time to sell, take in a roommate, or look for a better paying job.
Don’t spend hours just to save a few bucks
6. Being Penny Wise and Pound Foolish
Don’t get us wrong, coupon clipping is a good thing – but are you spending hours just to save a few bucks a week? Consider whether you could do better to spend those hours working freelance or part time, to pick up extra money.
Beware of reward credit card interest rates and loyalty programs
7. Not-so-rewarding Credit Cards and Loyalty Programs
Did you know that reward credit cards typically carry an interest rate about two percentage points higher than non-reward cards? If you normally carry a balance on your card, then that “free” airline ticket is not so free after all. And how about those loyalty programs at coffee shops and such? You’re likely to buy more coffee, more often, to get that not-so-free reward.
Simply ask “Can you offer something more affordable?”
8. Not Knowing When to Bargain
Not everyone enjoys dickering. But sometimes all you need to do is simply to ask the seller “Can you do better on the price?” or “I’m afraid my budget won’t cover that, can you offer something more affordable?” This technique is helpful especially with larger items such as cars, furniture or appliances.
All it takes is a few clicks to find the best rates
9. Not Shopping Your Insurance
Gosh, this is so easy nowadays…a few clicks online to compare rates. Yet many people still don’t do it, and are paying too much. Even if you have an independent insurance agent, don’t assume they will shop the market to get the best prices for you.
Watch out for too-good-to-be-true deals
10. Being a Sucker
Yeah, we all think we’re not suckers…but some of the smartest people out there can get snowed by too-good-to-be-true deals. If you’re not sure of a seller’s reputation, try the Better Business Bureau. And if you’re purchasing services, such as professional or business services, the best referral is by word of mouth. Ask your friends, neighbors and coworkers to recommend your next auto mechanic, dentist, lawyer or accountant.
Photo credit via Flickr (s_jelan, Ruben Swieringa, Jeffrey Beall, Covet Chicago, I-5 Design & Manufacture, james.thompson, jpmalth, JudeanPeoplesFront, reallyboring, russelldavies, klabusta)