FALLING into the same money traps costs a fortune.
From paying for unused subscriptions to running out of money mid-month, it’s easy to keep making the same mistakes.
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With Groundhog Day falling today, February 2 – the day that highlights how life can get stuck on repeat made famous in the Bill Murray movie – it’s time to break the cycle.
Instead, take action to tackle the most common mistakes we all make.
Vix Monro, money coach and co-founder of the Mad About Money app, says: “People slip up repeatedly through lack of knowledge, acting on impulse and falling back on convenience.
“Taking back control gives you a great feeling and will put money back in your pocket.”
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Here are five common financial pitfalls – and ways to jump straight over them.
Avoid the subscriptions trap
Brits spend around £500 a year on subscription services.
Nearly half sign up to a plan with an introductory offer with the intention of cancelling it as soon as it ends, found Vision Express.
But this doesn’t always happen.
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Vix says: “People think they might use it one day or get lured in by free trials and forget to cancel.”
Turn detective to track down all your subscriptions lurking in bank accounts, credit cards, services like PayPal, on your phone bill, and other online services like Apple Pay or Google Pay.
List them all and work out which to cancel.
Vix says: “If you don’t use it, lose it. And even if you do use it, could you downgrade to a cheaper deal?”
Be wary of free trials, where the company charges you as soon as the try-out period ends.
Vix says: “I try to avoid them altogether in case I forget to cancel before they start taking money. That’s what the companies rely on.”
If you are tempted, set an alert on your phone for a day or two before the trial ends to make sure you cancel.
Impulse buying
We’re all tempted by an email screaming “huge savings!”.
Our emotions take over and we end up wasting money on things we don’t need.
Shoppers make seven big impulse purchases per year on average, spending around £185 a year on buys they later regret.
Half surveyed for credit provider Vanquis said they spend impulsively because they enjoy treating themselves.
Vix says: “We do it to lift our mood or see it as a reward, and online shopping makes it so much easier to fall into this trap.”
Break the habit by making sure you have a watertight spending plan for the month, week or even for each day, then you’ll know how much you have left over for treats.
Instead of heading straight for the online checkout, leave it in the basket and go back 48 hours later.
“Ask yourself if you still really want it?” says Vix.
“On a scale of one to ten, how much joy would it bring you? If it’s not at least a nine, walk away.”
If you’re still craving a boost, keep a box of cheap treats at home – lovely bubble bath, a magazine or a favourite book.
Turn to that instead of your wallet.
If you know the impulse trap will get you in the end, set aside a small amount of money that you can spend on a personal pick-me-up, but don’t go over that limit.
Staying loyal
Sticking with the same provider for car or home insurance, broadband, phone or breakdown cover will cost you.
By not moving your loyalty, you miss out on new customer deals with other providers.
Vix says: “People like the convenience of not having to weigh up different quotes and providers.
“They worry it’s going to be a real hassle to switch, but there are websites that make it really easy.”
You could save up to £580 a year just by switching your car insurance, according to MoneySupermarket.com.
Make sure you know what is going out of your bank account and when it will auto renew.
Set a reminder so you don’t forget.
If you do miss the date and find yourself receiving your new policy details, you have 14 days to cancel or haggle for a better deal.
Running out of money
If each week or month sees a big fat gap between your account hitting zero and your next payday, break the cycle.
It comes back to having a spending plan, says Vix.
She added: “After you’ve taken out your essentials like mortgage, rent and bills, look at what is left and divide it into ‘pots’ for the rest of your expenses.”
That means allocating a set amount for food, takeaways, clothes and other things.
Breaking it down will put you in control and stop you overspending.
Find the best system for you. You can set aside cash in envelopes for each or open a free bank account that allows you to put money in different pots available with some TSB, Virgin Money, Starling and Monzo accounts.
Vix says: “Personal finance is personal, so find the right method for you.”
Falling foul of fees
If you frequently miss a credit card payment, incurring a late payment charge and also adding extra interest, it’s time to take action.
If you think the charges are excessive or unfair, you may be able to challenge them.
But avoid them wracking up in the first place setting up alerts and regular payments.
Vix says: “Automation is your friend. Automate payments for every bill that you can.
“Set them up to all come out on the same day, soon after you get paid, so maybe on the first day of the month.
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“That’s an easy date to remember, so you can sort out any non-automated bills on the same day too.”
Once you’ve got that sorted, you won’t miss payments and you’ll know how much money you have left for the rest of the month.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories.
