Losing money is painful but how much have you unknowingly paid out in the last year or so?
I can be quite forgetful but I’m not alone. With the day to day pressures of work and family it can be easy let money slip through your fingers. I recently did a audit of my finances and quickly realised that, over the past year, I’ve let about £1500 pounds simply ‘disappear’. Here are a few of the blackholes that sucked up my money and what I did to put my finances in order.
Expired Direct Debits
When it comes to making repeated payments, direct debits are fantastic. I have a number of them set up but I haven’t always tracked where my direct debits are going. Looking through my bank account, I notice my home insurance policy for my old mortgage was still being paid out even though the policy had been cancelled about 6 months prior. The grand total I’d unwittingly paid out was just under £500! In the current economic climate I dare anyone to say that losing that amount of money means nothing.
The first thing I did was to go through my paperwork and make sure that I no longer needed the insurance policy. Once confirmed, I simply deleted the direct debit. But it didn’t end there. I’d paid out quite a lot of money so it was time to see if I could claim it back. I called the insurance company and explained the situation. The lady on the phone was very helpful and took me through the process of getting a refund. Two weeks later the money was refunded to my bank account. It’s always worth chasing things like this up – if you don’t ask you don’t get.
Why is it so easy to let things get out of control. The phrase, “I’ll fix it tomorrow” recently cost me a lot of money. Abou 4 months ago I noticed water dripping from the ceiling in my living room. It wasn’t a huge amount and didn’t go anywhere near any of the power sockets or electrical goods. After a quick look round the attic I noticed a couple of tiles out of place. Instead of doing the sensible thing and caller the roofer straight away, I left it for about three days. Actually, I didn’t call him on third day. Instead, half of my living room ceiling came down. Cue a bill for £600 to put it right!
This one is pretty easy – get it fixed straight away. I know it’s easy to grumble about paying out a couple of hundred pounds for preventative work but it beats paying out £600 for repair work. If you’re considering claiming on your insurance – be careful – some insurers won’t pay up if they find that you already know of an existing problem and did nothing. To make matters worse, they could even revoke your insurance policy. This action on their part could leave a black mark against your name making it harder and more expensive to get cover from another provider. In the most extreme situations, you could find yourself liable for damages or injuries to other property or people.
This is one of the biggest money killers I’ve come across and I’m sure I’m not the only person guilty of it. Basically, it all boils down to being just a little bit greedy. I had a nice little 24 inch TV. Not flat screen, just a plain old box (remember those?). There was nothing wrong with it. The picture and sound quality were fine. The problem was that I’d seen a very nice flat screen television and I decided that it was a must have. I have to point out that this flat panel TV was nothing special – made by LG and only cost about £270 in the sale. So I bought it and send my trusty CRT to the charity shop. Was it worth it? Not really. I’d bought on impulse and ended up with a television with a bigger screen and some fancy connectors that I haven’t used to this day!
Calm the lizard! Many of our big purchases are based on impulse. It doesn’t matter how many times you write down the pros and cons you’ll probably still ending up buying your next big purchase because of some subconscious trigger. I’ve done it several times but, hopefully, I’m a little more savvy now. Once I’ve weighed up the cost, advantages, etc I stick to my guns. With this in mind, can anything go wrong? Yes; there’s always a crafty salesman waiting to pounce. Buy the bigger, more expensive model and get all these funky incentives… STOP! You’ve made your mind up. Don’t give in. If you don’t need it don’t buy it (or your wallet will end up a lot lighter).
I do like to think I’m pretty money savvy but, as you can see, it’s easy to get caught out. Whatever you do, however you do it, don’t do it!