The Three Silliest Money Traps – And How to Fix Them

The money traps I’m about to list are not earth-shattering secrets, nor do they contain any particularly sophisticated financial techniques. In fact, it’s precisely because they’re so simple and commonplace that I feel they must be stopped stat. Why should we continue to let these silly, daily money goofs drain our wallets?

The Problem: Recurring online fees billed to your card

Who hasn’t been guilty of this? A few years ago, for example, I was searching for a new job and decided to spruce up my resume by using a “free” online service. The catch, of course, was that I needed to input my credit card and cancel within 30 days for it to be truly free.

But human beings goof up (or get plain lazy) and forget to cancel these subscriptions. In my case, it cost me $35 a month. The worst part is that I didn’t even catch it until four months later, when I was almost $150 in the hole. Yep, that’s a month’s worth of $5/day savings down the drain for nothing.

The Solution:Sure, the simplest solution is to never, EVER use your credit card for anything other than immediate, one-off purchases. (Remember that magazine subscription or skin care product you ordered at an amazingly low introductory rate? How about when you forgot to cancel it on time and the price suddenly spiked?)

But, again, we’re merely human. To prevent such a mistake, try doing one or both of the following:

Set a calendar or budget reminder for one payment period BEFORE the free/special price period ends. You’ll usually need at least one payment cycle’s worth of advance notice to have it stopped on time.

You can also try calling your credit card company and asking them to authorize a maximum spend of only as much as you intend to pay. Not all card companies will agree, but it’s a very effective backstop.

The Problem: ATM Fees

Yes, we all know using other banks’ ATM machines are a real financial “duh!” moment. But that doesn’t stop us from doing it occasionally (or even often) out of convenience. If you do this a few times per month, it can cost hundreds of dollars per year.

The Solution:

You can do a few simple things to minimize this occurrence — I actually recommend doing them all.

First, if you don’t already have a debit card, get one — you can often use it in lieu of cash, thereby minimizing your need for paper dollars.

Next, many grocery and drug stores allow you to get cash back on purchases. Although you’re usually limited to $40 at a time, it adds up if you shop for food and essentials regularly. In fact, I rarely use ATMs anymore thanks to this.

Finally, get in the habit of withdrawing more cash at a time when you are at your bank or ATM. If the thought of carrying around tons of twenties sounds unappealing, try storing some at home until needed or asking for larger bills (and later breaking them).

The Problem: Small Impulse Buys

You know the drill – you’re in the check-out lane and get tempted by whatever kick-knack is in front of you. Or, you’re at the drug store and end up buying cheap cosmetics and toiletries you don’t really need. Though these things aren’t expensive, if you engage in the habit regularly, it can drain you of hundreds –or thousands — of dollars per year.

The Solution:

The psychology behind impulse buys is simple: It provides your brain’s reward centers with a quick, easy thrill. Subvert that impulse in the following ways.

One of my favorite techniques is giving myself an alternative reward that doesn’t cost any extra money. When I’m tempted by an impulse buy at the drugstore, for example, I’ll spritz some perfume from a tester on my wrist or pop a piece of gum or mint. Both increase my brain’s feelings of happiness or satiation and blunt my impulsiveness.

Other tricks include having recent impulse buys on you — such as that cheap lipstick you recently bought – as a way to remind yourself that you don’t need anything else. Or, try walking as quickly through the store as possible in order to minimize extra purchases. The extra rush will keep you focused and you’ll be moving too fast to notice impulse buys, anyhow.


Do you have any ideas on stopping your silly money mistakes? Share them in our comments section below!