12 Everyday Money Tasks You've Been Doing Wrong

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You handle a lot of routine money tasks, and like most people, you probably haven't thought much about that routine. But these "routine" tasks are repeated over and over and can result in a lot of wasted money if not done efficiently. Here are some everyday money tasks that might be tripping you up:

1. You Pay Your Bills Before You Pay You

What's wrong with paying your bills first? If you pay your bills first, you only get to keep whatever is left for yourself — which may be little or nothing. If you pay yourself first, you can ensure that you save and invest enough meet your goals, and then pay everyone else. What's the difference? First of all, putting money in savings first means it's a priority, and that's a powerful reminder that you are in control of your financial destiny. Second, leaving the money that doesn't go toward bills in easily accessible accounts let's you feel as if you have "extra" funds in your budget to spend on small purchases. When you save it first, you don't see it, so you won't spend it. Out of sight, out of mind works for saving instead of spending, too.

2. You Are a Rebel Without a List

If you go shopping without a list, you are likely to forget to buy things you need, and you're also likely to buy things you don't need based on what is on sale or what looks good at the time. A shopping list is especially helpful for groceries so you can buy all of the ingredients for meals you plan to make during the week. Using a list saves extra trips to the store, or dining out when you find you don't have anything to eat at home.

3. You Check Your Balance to See if You Can "Afford" Something

Checking to see how much money you have in your checking account — or even worse, your available credit card balance — to see if you can afford to buy something is a recipe for disaster. You are almost certain to spend more than you can really afford. Using a budget to plan expenses is the right way to see if you can afford something. If you can't afford something right now, you can set up a budget to allow you to save up.

4. You Do the Minimum

Making minimum payments on credit cards and other loans is expensive. You will end up paying a lot of interest that provides no benefit to you. For example, making minimum payments on a $3,000 credit card debt could take you 16 years to pay off and cost over $3,600 in interest alone! Paying more than the minimum will allow you to wipe out credit card debt much faster and save you lots of money on interest that you can use to get ahead.

5. You Self Medicate With Retail Therapy

Some people go shopping as a fun activity or to help deal with depression or stress. "Retail therapy" is a very expensive way to achieve a short-term impact. Plus buying things you don't really need wastes the resources it took to manufacture and distribute the items, and the items take up space in your house. There are lots of constructive activities that are less expensive and avoid the problems that come with recreational shopping.

6. You Are Stuck With Checks

Writing checks is an inefficient way to pay for things. It takes time to write out a check, and you can make mistakes such as making it out to the wrong payee, misdating the check, or writing illegibly and having it rejected. Plus, you have to manually balance your checking account to keep track of checks you have written but have not yet cleared. Instead, use autoplay, electronic payments, and credit cards to make payments whenever possible.

When I receive a check as payment, I use an electronic banking app on my phone to take a photograph of the check and deposit it instantly. This eliminates the possibility of losing the check and I avoid making a special trip to the bank.

7. You Don't Use Coupons Right

Some people think coupons are too much work and don't bother to use them at all. I take a low-impact approach to get the most benefit from coupons with the least time and effort. I hang on to coupons that will work on things I buy anyway. Coupons only work if you have them with you when you go shopping, so I put the good coupons in my wallet or in a small organizer that I keep in my car. You can get more impact from coupons by stacking them — use both a store coupon and a manufacturer's coupon on the same item to save even more.

8. You Are Overpaying

Lots of people overpay for things they buy every day. Buying snacks and drinks at a convenience store or vending machine is likely to be about twice as expensive as buying the same items at a grocery store. Buying coffee at a coffee shop instead of brewing it yourself costs about three times as much. With a little planning and effort, you can have the same items for much less money.

9. You Don't Match

I get this comment about my clothes a lot, but in this case I am talking about 401K matching funds. Many employers offer matching retirement investment funds. This means that for every dollar you put in, your employer will put in a dollar for free. If you are not getting the maximum company match, you are leaving free money on the table every payday.

10. You Aren't Bargaining Hard

There are a lot of situations where a little bit of bargaining can go a long way. When purchasing vehicles or used items, there is often a lot of room to bring the price down if you are willing to risk having your offer rejected. Sometimes even prices at retail stores be negotiated— I have talked my way into using expired coupons or getting an additional discount if there is something that looks wrong with an item I am interested in. I have also taken items back to get a price adjustment after an item has gone on sale.

11. You Buy Stuff You Want

I guess buying stuff you want is better than buying stuff you don't want, but you should really focus on buying stuff you need. There are lots of things I have wanted to buy but avoided. For example, in recent years I really wanted to buy a recumbent bike, a new computer, and a stool for my wood shop. I decided to ride my old bike, keep using my old computer, and I found a free stool for my shop. These were all things I wanted but didn't need, and I saved a lot of money by not buying stuff I wanted.

12. You Are Buying Your Broker a Big Yacht

You may not realize that you are paying your stockbroker or investment company every day to manage your retirement funds and other investments. Over the years, the difference between a 1% annual fee for an actively managed fund vs. a 0.1% annual fee for an index fund adds up to a lot of money. Check the fees you are paying on your investment accounts and move to less expensive options that have significantly lower fees.

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