3 Ways Regular People Lose Money Without Realizing It

Managing your money is a chore. But it’s a chore that all people have to do if they want to stop living hand to mouth, get out of debt, and/or grow wealth. When most people start out on the path of personal finance, they have a lot of problems to correct. It’s not at all uncommon for folks to be hemorrhaging money for a variety of reasons. Eventually (hopefully) most of these problems will be corrected. Debt will be reduced, spending will be brought in line with a sound budget, and savings and investment will start to accumulate. But there are further details over and above these basics of personal finance. People lose money in all sorts of ways, and some of them are very sneaky or subtle.

One class of money loss is from insurance or services that have been signed up for without the knowledge of the individual.

The biggest worldwide example of this phenomenon is Payment Protection Insurance, or PPI. A PPI Claim is typically registered because a person discovers that they are being charged for this form of insurance (insurance against the possibility of non-payment of a mortgage or other large loan) without their knowledge. If this sounds like an isolated event, it has happened to many thousands of people in the UK, where large class action lawsuits are seeing millions of pounds returned to people across the nation. These sorts of schemes aren’t that uncommon. To figure out if something like this is being drafted from your account, check your bank statements every month. Take note of any unfamiliar payments and see that they’re taken care of with your bank or credit card company.

Another way that people are making payments they don’t realize is with unannounced price increases from service providers.

In the United States, it’s not uncommon for the major ISPs to raise their prices without much notice, after a certain amount of time has gone by. After having payments automatically drafted from an account for many months, the average consumer simply doesn’t notice that the price has suddenly increased by $20. Because that’s $240 a year, it’s well worth it to take this up with your ISP or other service provider. In most cases, they’ll be able to give you a price that works for you. You’ve got to keep an eye on those guys.

Another way that people pay money without realizing it is through forgotten subscriptions.

It used to be that cable and magazines were the only subscriptions that most people had. Today you can subscribe to just about anything you can name: razors, toilet paper, even clothes. Some people sign up for a lot of these things, or for services like internet identity protection, only to forget that the subscription even exists. Again, check your bank statements and look for any drafts that are unfamiliar. By saving yourself monthly automatic drafts, you can save hundreds of dollars a year.

As stated above, these are ways to start investing in a fine-tuned personal finance life. By saving money every month, you can save lots of money a year, and that’ll add up and make a difference in your life.