We’ve all made some minor mistakes with our money. Maybe you splurged on an expensive dinner, and had to trim your grocery budget for the week. Or you just HAD to have that purse in the window at Bloomingdales. Yes, these things can put a crimp in your bank account, but you’ll probably recover from them relatively unscathed. On the other hand, some money mistakes can cost you BIG TIME, even though they seem small. Here are a few things you shouldn’t do, EVER. We got these from Real Simple magazine.
- Missing a mortgage payment, or sending it in late. Why? Because one late payment can knock 100 points off your credit score overnight, which will affect your ability to get the best interest rates on car loans, credit cards and so on. So what should you do if you’re strapped for cash? April Lewis-Parks, director of education for Consolidated Credit Counseling Services, says if you’re unable to make your payment, call your lender right away. They have hardship departments that may work out another payment arrangement for you for six months. Don’t risk getting behind and losing your home.
- You keep longer-term money in a basic savings account. If you do this, your money will earn around 2% interest, and that won’t be on par with inflation, which averages about 3%. So, only leave $2,000 to $3,000 in a basic savings account for immediate needs, and put the rest in a money-market mutual fund. According to financial advisor Kathryn Nusbaum, these accounts are fundamentally secure. They also have a better chance of surpassing inflation and making more money than a traditional savings account does. For example, if you put $20,000 in a money-market mutual fund as opposed to a savings account, you’ll end up with an extra $7,000 dollars after 10 years.
- You wait too long to submit a health insurance claim. You and your doctor could BOTH be stiffed by the insurance company, and your doctor could demand the whole fee from YOU! So, know your insurance company’s filing deadline. If the doctor’s office was late filing and tries to collect the entire fee from you, pay your co-insurance and dispute the rest with your doctor. If they filed late – they should absorb the difference.