Published on July 15, 2015 8:37 am, by Beck Cofrancesco
It’s easy to get complacent with our everyday banking needs, especially when times are good.
The hassle to change banks, paperwork and time involved means we put it firmly on the bottom of our money to do list. It’s painful! It’s why most of us are guilty of committing these 7 everyday banking mistakes.
1. Too many accounts (including credit cards)
Unless you’ve scored an amazing deal where bank fees and charges don’t apply to you, having too many accounts is wasting your money on fees and charges.Those small amounts really add up, and it’s an area that really shows up when you start to pay close attention to where your money is going and where you can be saving.
What you can do about it?
Simplify your banking accounts by writing down what your banking needs are. Work out the best accounts to fulfil that.
2. Using other bank ATM’s and worse – the ones found in pubs and clubs
Two dollars may not seem like much at the time, but if you’re placing convenience over money smarts you’re probably throwing money away. And, I’ve noticed there’s a trend in pubs and servos to charge you more for the privilege. The highest I’ve seen is $5.50!
You’re paying extra for your money when you don’t have to.
In 2014, Australians paid about $630 million in bank fees! What a waste.
What you can do about it?
With a little planning you can kiss bank fees like this one goodbye.
Plan out your money needs and get out one lump sum that will last you through the week and if that fails – wear flats and walk the extra 500 metres to the nearest bank atm.
3. Only using the big 4 banks
There are benefits in using the big four banks (ANZ, CBA, WESTPAC, NAB) but don’t ignore the little guys. They are likely to have better deals as they don’t have the marketing pull of the bigger players, and are often small and nimble enough to release new, innovative everyday banking products that may suit you.
4. Chasing interest deals all the time
It’s tempting to be lured by deals of higher interest or lower interest transfers for credit cards, but there can be a trap. We’re all for shopping around to get the best deal, but make sure you do your homework. Sometimes entry and exit fees, or when honeymoon rates end could turn the move into a costly one.
5. Leaving large sums of money in everyday accounts
The Reserve Bank has set really low interest rates at the moment, so it’s unlikely you’re earning more than 1% for your everyday savings accounts. If you’ve got a large amount of money sitting in a savings account you’re missing out on the power of compound interest.Consider term deposits or online accounts that tend to offer higher rates.
6. Not taking advantage of technology
Online banking and apps have made it easier than ever to manage money. They help you stay on top of your finances when it’s convenient for you and are a great way to keep an eye on transactions.If you’re still lining up at the bank, it’s costing you money in time.
Plus, if you’re getting your statements mailed you could be leaving a banking trail that makes it easier for people to steal your identity – go paperless! Stop the clutter and paper trails and select to receive info electronically (you’ll prob save on the admin fee too).
7. Not reading the fine print
I can’t stress how important this is. Never sign up to a new account or financial deal without reading the fine print or getting someone to explain it to you. It may save you a nasty surprise later on when you try to get out of it, or try and claim.
For example, those 5 year interest free periods sound like a great deal don’t they? Except, if you read the fine print… and you’re one day late on a payment… guess what?? You’re up for all the interest. So that $5000 couch just cost you $8000. Ouch.
If you’ve read all of these tips, it must be you’re already amazingly brilliant with money and just wanted to check you’re not doing anything wrong, or you’ve realised oops….there are a couple of mistakes in here I’m making. Just remember, success at anything starts with the first step….