Five money mistakes that are costing you THOUSANDS – and how to fix them today

From not checking your bank balance, to paying too much credit card interest and not claiming benefits that you’re entitled to, there are a whole host of money mistakes you could be making

Managing your money has never been more crucial

The cost of living crisis is squeezing all our wallets and is leaving us looking for ways to make our money stretch further.

But some very simple mistakes could be costing you thousands of pounds without you even realizing it.

For example, when was the last time you went through your bank statement with a fine-tooth comb?

Do you know how much interest you’re paying on a credit card?

These are all things that can be easily fixed – and possibly leave you much better off as a result.

Here are five money mistakes that you could be making right now… and what to do about them.

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Mistake one: Not going through your bank statements

You should aim to review your bank statements every three to six months, to check you’re not making any unnecessary payments or spending too much.

For example, you may find you don’t really watch Netflix anymore, or you haven’t ordered anything with Amazon Prime in a long time.

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Perhaps you’ve spotted a trend and realize you’re spending too much on takeaway coffee or fast food.

Going through your finances also allows you to see exactly how much money you have going in and out, meaning you can budget and put something into savings or an emergency fund.

How the energy bills crisis affects you

Mistake two: Not getting the best interest rates

If you have savings, make sure your money isn’t languishing in a low interest account that does nothing for you.

Savings rates are on the way up again, with the top easy-access account from Chase paying 1.5%. The next top players are Cynergy Bank and Zopa which each offer 1.2%.

If you’ve not got a lot of savings, then both Virgin Money and Nationwide do offer better rates, but only up to a certain amount.

The Virgin Money M Plus account pays 2.02% up to £1,000, while the Nationwide FlexDirect account gives 2% up to £1,500.

If you can afford to lock your money away, the best one-year fixes right now are from Charter Savings Bank and Kent Reliance, each paying 2.05%. For both accounts, you have to deposit £1,000.

For a two-year fix, the top player is SmartSave Bank, paying 2.37% and with a minimum deposit of £10,000, or a five-year fix with PCF Bank will give you 2.41% with a minimum £1,000 deposit.

Mistake three: Not switching debt to 0% interest

If you have credit card debt, pricey interest rates will likely keep you paying it off for a longer amount of time.

See if you can move the debt you owe over to a 0% interest balance transfer card.

This is where you shift the money owed on one card to a new one that comes with a 0% interest-free period.

At the moment, the longest 0% balance transfer card is from Virgin Money, offering 34 months interest free, with a 2.7% fee.

You may not necessarily need the longest length card to pay off your debt, so it may pay you to go for a shorter deal with less or zero fees.

Only those with good credit ratings will get the top rates, and you may not always get the advertised rate.

Use an eligibility calculator first to check what you’re likely to be accepted for without damaging your credit score.

And crucially, don’t make any new spends on these cards as you’ll likely start to be charged interest until you pay it off.

Mistake four: Not making the most of first time buyer schemes

Getting your foot on the property ladder is no easy task, but there are schemes out there specifically to help first time buyers.

For example, there are Lifetime ISA (LISA) accounts which give savers a free 25% cash boost from the government.

You can only save up to £4,000 in a LISA each year, meaning the maximum bonus you can pocket is £1,000.

There is also the Help to Buy equity loan scheme, where savers can buy a property with a 5% deposit and the government will lend you up to 20% of the property price.

The maximum you can borrow in London is 40%.

You’ll have to start paying interest on the loan after five years, at a rate of 1.75%, so keep in mind this added cost to your repayments.

You can see more first time buyer schemes here.

Mistake five: Not checking your benefit entitlement

Up to seven million households are missing out on £15billion a year worth of benefits, according to debt charity Turn2Us.

Many people automatically assume they’re not entitled to anything, but Martin Lewis’ MoneySavingExpert says it is worth the check if you’re household income is below £30,000.

In some cases, those with a household income of £50,000 could be entitled too – for example, if you’re a single parent with a high rent.

It only takes ten minutes to check your entitlement online. Some of the most popular benefit calculators include Turn2us, Policy in Practice and entitled to.

To find out your eligibility, you’ll need to answer questions about your employment, income and living arrangements.

You’ll need to answer as accurately as possible in order to get a correct figure.

Once you’ve found out if you’re likely able to make a claim, you’ll then need to physically apply for the benefits.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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