If you're trying to spend less so you can save more, there might be some obvious mistakes you're making with your money. For example, you're likely losing a lot more than you're making if you're gambling at the casino every week. And you're certainly not doing your finances any favors if you're dining out for lunch and dinner every day.
But there are plenty of other ways you might be losing money that aren't so obvious. Here are 15 mistakes you're making that you might not realize are costing you a lot.
1. Being Financially Disorganized
One of the biggest money mistakes people make is being financially disorganized, said Kathleen Grace, a certified financial planner and managing director at United Capital. This can end up costing you a lot of money, she said.
For example, if you’re not keeping tabs on your accounts, you could end up paying bills late and getting hit with late fees. If you’re not tracking your spending and trying to get by without a budget, you’ll end up overspending.
Fortunately, there are plenty of financial apps — such as Mint and Prosper Daily — that can help you keep tabs on your accounts and spending, and send you alerts when bills are due or you’ve exceeded your budget.
2. Leaving Money From Your Employer on the Table
If your employer offers a workplace retirement plan such as a 401k and will match employee contributions, you’re making a mistake if you’re not contributing enough to the plan to get the full match. “It’s free money,” Grace said.
Typically, employers will match 50 cents to every $1 contributed by an employee up to a certain percentage of pay — usually 6 percent, according to 401kHelpCenter.com. However, one in four plan participants miss out on receiving a full match by not saving enough, leaving an estimated $1,366 of free money on the table, according to research by Financial Engines, an independent financial advising company that provides investment advice for workplace retirement plans.
3. Letting Investment Fees Eat Into Your Savings
One of the most costly mistakes you can make is not understanding the true cost of your investment portfolio, said Elliot Weissbluth, CEO of HighTower. That’s because there are fees on your workplace retirement savings account that eat into your returns and reduce the amount of money you’ll have for retirement.
Weissbluth offers this example: If you have $25,000 invested and are earning 8 percent annually but are being hit with a 1 percent fee on assets, that fee will leave you with $73,624 less in your account after 30 years. He recommends visiting AmericasBest401k.com to check the fees on your workplace retirement plan to see whether it’s cost effective. You can talk to your human resources department if you’re not happy with the fees your plan charges.
If you’re saving outside a workplace plan through an advisor, make sure the person you’re working with is a fiduciary — a professional who is legally bound to work in your interest, Weissbluth said. Otherwise, you’ll pay more fees with a non-fiduciary who is more focused on selling you products.
4. Taking a Loan From Your 401k
If you need cash, borrowing from your 401k might seem like a good option because it is your money, after all. However, it can be a costly option, said Andrew Meadows, vice president of brand and culture at Ubiquity Retirement + Savings.
You’ll have to pay the loan back with interest and fees, according to Ubiquity. If you don’t pay your loan back by the deadline, you could face penalties and an income tax liability in the thousands of dollars, Meadows said. Plus, by taking out a chunk of your nest egg, you’ve lost out on tax-deferred earnings.
5. Losing Flexible Spending Account Money
Taking advantage of a flexible spending account offered by your employer is a great way to set aside pre-tax dollars into an account to cover out-of-pocket medical costs. However, you have to use all of the money in your account by a certain date each year or lose it.
Brandon Hayes, a certified financial planner and vice president of oXYGen Financial, sees people forgo FSA funds because they don’t spend them in time. If you contribute the maximum of $2,550 but only spend half of it, you lose up to $1,275.
“You’ll want to check your company-provided FSA rules to be certain you don’t lose money you’ve saved for healthcare purposes,” he said.
6. Letting Your Credit Score Slide
One of the biggest mistakes when it comes to credit is not paying attention to your credit score. Lenders look at this number to decide whether to let you borrow money and at what rate.
“For large loans, like an auto or home loan, having a low credit score could mean you could pay thousands more in interest over the life of the loan compared to someone who has an excellent credit score and was able to secure a lower interest rate,” said Sandra Bernardo, manager of consumer education at Experian.
For example, someone with good credit who got a five-year car loan with a 4 percent rate would pay $2,232 less over the life of the loan than someone with an 8 percent rate, according to Experian. You can get your credit score at Experian.com, TransUnion.com, Equifax.com or myFICO.com. If your score is low, make sure you’re not making common mistakes that hurt your credit.
7. Carrying a Credit Card Balance for Years
If you’re carrying a balance on your credit card rather than paying off what you owe each month, you could be paying hundreds — or thousands — of dollars in interest on your debt.
For example, if you have a balance of $1,000 on a card with a 15 percent interest rate and pay just $25 a month, it will take you more than four years to pay it off. And you’ll pay $395 in interest on top of the $1,000 you charged.
“That’s just throwing money down the drain,” Grace said.
8. Spending More to Save More
Waiting for items you need to go on sale is a good way to save money. But some sales tactics used by retailers can end up leading you to spend more.
Retailers often promote deals such as "buy two, get one free" or "buy more, save more,” knowing that most people perceive a better value with higher dollar figures, said consumer expert Andrea Woroch.
“Although $10 off $50 and $20 off $100 are the same percent savings, most people would prefer to save $20 since that seems to be the better deal,” she said. “Be smarter than that, and don’t allow those seemingly bigger savings influence you to buy more than you need.”
9. Buying Big-Ticket Items at the Wrong Time of Year
Don’t make the mistake of buying a big-ticket item such as an appliance or TV on impulse. You’ll save big if you time your purchase right to take advantage of the sales cycle.
For example, you can save 40 percent or more on refrigerators, washer/dryer sets and other major household appliances by buying them during Memorial Day, Labor Day, Presidents Day and Black Friday sales, said Brent Shelton, an online shopping expert with FatWallet.com. That can translate to savings of $150 to $500, he said.
10. Letting Emotions Trigger Your Purchases
Some people shop when they’re feeling sad, while others spend as a reward when they’re feeling really good about themselves. “Allowing your feelings to fuel buying decisions will result in endless impulse purchases and wasted money,” Woroch said.
Learn to recognize your spending triggers and how to cope with your feelings in other ways. “For instance, go for a run to let off steam or bake a favorite dessert to celebrate when you feel like rewarding yourself,” Woroch said.
11. Not Considering a Mortgage Refinance
With mortgage rates as low as they are now, it could be a mistake not to refinance if your current rate is higher.
“The cost of not refinancing today and waiting can cost you tens of thousands of dollars over the life of the loan,” Hayes said. “At the end of the day, it’s not too hard to get through the underwing process with mortgage lenders thanks to the quick accessibility of digital files, tax returns and necessary financial information.”
12. Paying for Memberships You’re Not Using
“Is it really necessary to have Apple Music, Pandora and Spotify at the same time?” Hayes said. “Although these monthly charges aren’t substantial, they can add up over time.” So, limit yourself to avoid overspending on duplicate services.
Or, maybe you’re paying $99 a year for an Amazon Prime membership but aren’t taking advantage of the benefits to make your membership worthwhile. Or, do you have a gym membership you’re not using but haven’t gotten around to canceling?
“I believe that putting a health and exercise component into the budget is very important, but just make sure you are using your monthly services,” Hayes said. “Otherwise, it can be a waste.”
13. Forgetting to Rebalance Your Portfolio
If you’ve made the effort to establish an asset allocation strategy for your portfolio — in other words, the right mix of stocks and bonds to reach investing goals — you have to make adjustments when the markets fluctuate so you can stay on target. This is known as rebalancing a portfolio, and it generally consists of buying investments that have underperformed and selling investments that have outperformed, said Paul Jacobs, a certified financial planner and chief investment officer of the Palisades Hudson Financial Group’s Atlanta office.
If you don’t rebalance, “your portfolio may become dramatically different than you intended and lead to losses that could have been avoided,” he said. “For someone starting out and wary of becoming overwhelmed, rebalancing once a year is a good starting point.”
14. Forgetting to Comparison Shop Your Insurance
It’s easy to get busy and forget to take the time each year to make sure you’re getting the best deal with your insurance coverage, Grace said. But if you don’t compare prices, “you could throw away a lot of money,” she said.
Customers who reshop their auto insurance policy and switch companies save an average of $356 on their annual premiums, according to the J.D. Power 2016 U.S. Insurance Shopping Study. You can get quotes and compare offers from several insurers at TheZebra.com, InsuranceQuotes.com and CarInsurance.com.
15. Renting Instead of Owning a Home
You’ve likely heard that renting is like throwing money away because you’re not building equity and don’t own anything at the end of the day. However, there’s another reason you might be losing money by renting: Renting is more expensive than owning in 42 states, according to a study by GOBankingRates.
For example, the median monthly rent in Florida is $1,695, but the monthly mortgage based on the median home list price in the state is $1,297. Over a year, you’d pay $4,776 more to rent.