Money Mistakes You May Be Making

Not considering how many hours (not dollars) something costs.

You work hard for your money and like most of us, have probably lost track of how many times you’ve gone above and beyond to help a co-worker or put in overtime to finish a project. You see a $400 coat you like and feel like you deserve it after all the hard work you’ve put in.

It’s not that you don’t deserve to reward yourself, because you do! However, before you spend that money, think of the item in terms of how many hours after tax you must work to buy it.

Let’s say you make $20/hour after tax. That means the coat will cost you 20 hours (or half of a work week) to buy. Do you have the cash and feel like it’s still worth it? Go for it, treat your self. But if 20 hours seems like a hefty investment, it’s best to hold off.

Withdrawing money from an ATM that isn’t your bank.

Say you’re out at a restaurant or bar with some friends and you want to split the bill, but you don’t have cash. Lucky for you, you spot one of those no-name, generic ATMs in the corner so you don’t have to leave and find a bank. Hold on, full stop.

Although you might be okay with paying the ATM fee, your bank likely charges the same fee, or more on top of that (if it’s not Oklahoma Central Credit Union, where all TransFund machines in QuikTrip and OnCue are free). This means if you withdraw $60, you might pay $2.50 for the ATM and up to $5 to your bank. You essentially just paid 12.5% of immediate interest.

Plan and withdraw money from your bank or your bank’s ATM. Locate an Oklahoma Central ATM. Or forgo the cash altogether and use your debit card!

Paying bank fees.

Even though your bank only keeps a fraction of cash on hand, the remaining money is essentially virtual dollars, some banks charge a fee just to keep those virtual dollars in a checking account.

On top of this, a lot of checking accounts charge a fee when you send a money transfer, have less money than their minimum limit, and use your debit card more than a particular number of times per month.

If you find that any of the above applies to you, check out Oklahoma Central Credit Union's Carefree Checking where there are no service charges, no minimum balance, free bill pay, and more.

Not thinking of pay-per-use.

You want a new black shirt. There are two choices.

1. The $10 shirt: It’s made of low quality material and you know it’ll fade, stretch, or get a hole after four washes.
2. The $40 shirt: It’s produced with high quality fabric and the stitching doesn’t look like it’s about to unravel. It lasts 50 washes before it starts to lose shape.

The $40 shirt is a better investment because it costs $.80 per wear (potentially 50 washes), while the $10 shirt is $2.50 per wear (potentially only 4 washes). The same principle applies for items like cocktail dresses, shoes, electronics, and tools.

To get around this, buy items you can use more than a handful of times – it’s more economical and friendlier to the environment.

Paying credit card interest or fees.

A credit card can be a useful tool. Some offer reward programs like cash back, grocery points or travel discounts that can make using the card worthwhile.

Credit card interest rates can be incredibly high, and not paying off your balance every month can start a downward spiral into crippling debt that can destroy your finances and your credit score. The way to prevent this? Pay your balance off in full every month.

Something else to look out for? Pesky annual fees. There are plenty of free credit cards, so it’s hard to justify a $20-$200 annual fee just to carry a piece of plastic. Check out Oklahoma Central Credit Union’s Visa Bonus Rewards Card, no annual fee and you earn points on each eligible purchase.

Agreeing without asking for better terms.

Negotiating can be uncomfortable. One study showed that only 37% of men and 26% of women felt confident negotiating.
There are two easy tactics that can be used without much stress:

1. Call three or more businesses and ask for a quote. You may be surprised how the same offering can be priced differently.
2. Just ask! Sometimes it’s as easy as saying “Do you think you can give me 15% off?”

What’s the worst that can happen? You either get a yes or a no.

Not thinking in terms of lost opportunity.

We’ve all heard the “Skip your $3 coffee each work day and you will save $15 a week, which is $60 a month, or $720 a year.”

But what other $720 thing or experience are you missing out on because it went toward coffee? That money could pay for a laptop, a vacation, or it could be the start of a down payment on your dream home.

Delivery fees, pre-packaged fruits and vegetables, and eating out are all things that are convenient in the moment but can keep you from experiencing other things or reaching your goals.

You don’t have to make these changes all at once but making one to two changes at a time will add up. As you begin to make these changes and see your savings build, look for ways you can save for your future.

It’s never too soon to start looking at various savings accounts, such as Money Markets, Certificate Accounts and IRAs. For a comparison of what each one has to offer, check out our Savings Comparison Guide for features of each type of savings accounts or contact a Member Financial Representative at Oklahoma Central Credit Union - 918-664-6000, select option 8.

Posted - July 17, 2017