How laziness costs us £1,200
Are you spending £1197.22 a year and getting absolutely nothing in return?
Sometimes our finances can be the last thing on our mind. At the end of a long day at work, you might not have the energy to search for a new credit card or savings account. Would you feel more motivated if you knew your financial apathy could cost £1,200 a year?
No matter how clued up we are on our finances, most of us are guilty of at least one of the following.
Not fighting back against high interest
Imagine you have a credit card debt of £2,500 which you are repaying at £200 per month at 18% interest. By sticking with your current card it would take you 14 months to pay off your debt and you would repay £265.15 in interest.
Switching to a 0% balance transfer card you would clear your debt in 13 months and completely avoid interest – bear in mind you would pay a balance transfer fee. As the current market leader, Barclaycard offers 18 months interest free for a 2.9% fee (£72.50 in this scenario).
Money wasted: Sticking with your current card rather than transferring to Barclaycard would cost you an avoidable £192.65.
Forgetting to fill up
With petrol prices hitting £6 per gallon, motorists are finding it increasingly costly to keep their cars on the road.
What's more, we could be adding to this expense if we buy overpriced fuel at the last minute when we could have bought fuel elsewhere for less.
Money wasted: According to data from First Direct, the average motorist wastes £172.57 a year on last minute fuel purchases.
Not bothering to switch energy providers
Despite price hikes from each of the 'Big Six' energy companies, thousands of people remain on expensive tariffs when they could get a cheaper deal elsewhere.
In the majority of cases, gas and electricity suppliers do not reward loyal customers who stay with the same provider. This means you may well find a cheaper deal by shopping around for a new supplier.
Money wasted: By sticking with a standard tariff instead of a cheap online plan you could miss out on around £300 of potential savings a year.
Forgetting about your nest egg
With high inflation and low interest rates, we all know the economy is not conducive to saving at present. However, many of us are further eroding the value of our cash by failing to shop around for market-leading accounts.
For instance, banks and building societies often offer competitive rates for an introductory period which then plummet after 12 months. If you fail to keep an eye on your savings, you could be unaware your returns have fallen drastically.
Money wasted: Consumer group Which? estimates that the average UK saver could make an extra £322 in interest every year by switching to market-leading accounts.
Staying loyal
And sometimes it isn't laziness that costs us money but a sheer lack of knowledge.
As a general rule, you're almost certainly paying too much for your insurance premiums if you stick with the same company year after year without investigating cheaper alternatives.
Sadly for my mother, she didn't learn this fact until she had wasted hundreds (possibly thousands) of pounds. Having made the classic mistake of taking out home insurance with her mortgage provider, she had remained with the same insurer for decades.
The result of her loyal custom? She was paying just over £300 for her cover. Last week she finally shopped around and found a policy for around £90.
Money wasted: Approximately £210 – probably thousands over the term of the mortgage.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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