Everyone makes money mistakes because it takes a lot of work to stay on top of all the moving parts that come with managing money. When I started to manage my money as an adult, I had to be very organized and try to ensure that I wasn’t missing any important details with my money matters.
A huge part of that is taking care of my banking relationships- figuring out which banks I want to bank with, what financial products I needed and how they fit in my overall financial picture. This leaves room for lots of errors and mistakes, today we will dive deep into the more common money mistakes people make and how to avoid them.
Not Negotiating Better Interest Rates
Many people miss out an amazing opportunity to get cheaper rates because they simply don’t negotiate.
Negotiating the best rates is very important because it can help you to borrow for less on most credit cards, lines of credit and other credit products. It’s as simple as asking this question: “Is this the best rate that you have?”
Also, know your credit score beforehand and research the best rate for your credit score in the market. You can find your credit score using Credit Karma and avoid this banking mistake.
If your credit score is higher, you should be able to get a very competitive rate. If your credit score is lower, you may not be able to get the best rate, but you can still ask and see what the bank can do for you.
Not understanding their Financial Situation
Another big banking mistake to avoid is not knowing what your financial situation is before you choose the right bank.
Organizing your finances is critical in helping you to understand what financial products will best suit your needs. It will let you know what you need to prioritize – like a new bank account or a new investment account that brings in passive income.
Now, always do your research and be aware of the different financial products that are in the market. When you do this, you will understand what the interest rates are, what differentiates them which will help you choose the one that works for you.
Not asking about Bank Fees
A huge banking mistake people make is opening a new financial product without asking about the fees that are attached to that product. Bank fees or Management fees for investing products are a source of income for banks and are sometimes not disclosed upfront, so always ask and understand how much it will cost you over time.
Different bank fees include: ATM fees, overdraft fees, transfer fees just to name a few. The last thing you want is to lose a significant amount of money to fees because you are unaware of a fee that is attached to your account.
Conclusion
Your banking relationship is a serious part of your financial life and should not be taken lightly. By avoiding these money mistakes, you will be in a position to equip yourself to get the most of your banking and set yourself up for success.
What other money mistakes are you making with your banking?
Thanks for these tips! The banking fees can really be a shocker.
Hi Amy,
Absolutely, banking fees are a real shocker and they can get exorbitant which is why it is critical to read the fine details.
Thanks for stopping by!
HI Jo,
I used to be a culprit of not negotiating better interest rates, especially with credit cards but I know better now and I always do. If the bank is not willing to negotiate there is another one with a better option.
Great article.
Hi Tina,
I am so happy that you are negotiating better rates and advocating for yourself. You also make a great point – shop around until you find what you need! Thanks for reading❤️
Great points! Fees are a big one!
Thanks Tim – fees will always make you pay more than what you need to spend on your banking! Thanks for reading!