One of the reasons I was so bad with my finances in my twenties was because I was lazy. Yep. I lost so much money over the years, and all I needed to do was spend a little time getting myself organized. And even now, I still find myself slacking off sometimes with my finances. Being lazy and not thinking ahead still costs me money.
For example, over the past two weeks, I’ve gone to five Vancouver International Film Festival events. When I saw a movie I thought was interesting, I would buy a ticket at full price – even though I was well aware that if I held off and figured out how many films I actually wanted to see, I could have bought a five-pack of tickets, saving me $5 off the total cost. Sure, it’s just $5… but have you seen the title of my blog? How hard would it have been to get myself a little more organized? I’d be better off by $5, and it probably would have only cost me 2 minutes of my time.
About 8 years ago, I bought my first laptop computer. It came with a $75 mail-in rebate. All I had to do was photocopy my original receipt, and fill in a little information card. I had THREE MONTHS to do it, and I just didn’t. It sat on my desk because I was too lazy to do anything about it. Even though back then, $75 was kind of a big deal for me.
I had a nice conversation with a friend over the weekend about how he thought being passive about his finances has caused money to slip through his fingers. He seems to be doing all the right things – contributing to his company’s retirement plan (which offers a generous match – free money!), owns a rental property, and is frugal on a daily basis… but he hasn’t taken the next step to set up his own retirement accounts outside of his employer’s offering. It’s not because he doesn’t have the money to start, it’s because he has been passive about learning how to do it. Part of it is intimidation for sure… but the information is all available online. It’s just a matter of making it a priority.
Being financially lazy happens all the time to all kinds of different people, and that got me thinking about all of the ways being lazy has cost me in the past. I cringe at the thought of how much money I’ve lost over the years. :|
Not saving for retirement (or monitoring your accounts)
Time is money, and the longer you wait to save for your retirement, the harder it will be to catch up. I once read on CNN that said if you start saving at age 25, and put aside $3,000 a year in a tax-deferred account for 10 years – and then you stop saving completely – by the time you reach 65, your $30,000 investment will have grown to more than $472,000 (assuming an 8% annual rate of return).
Now if you put off saving until you turn 35, and then save $3,000 for 30 years, by the time you reach 65, you will have set aside $90,000 of your own money, but it will have only grown to about $367,000 (assuming the same 8% annual return). That’s a huge difference, and it’s something that most of us know about, but perhaps aren’t making a priority.
I’ve been contributing regularly into my retirement accounts since 25, but have not kept on top of monitoring my accounts. I used to monitor them religiously, tracking and charting my daily progress. It was a little obsessive. Now, I just have my contributions auto-deducted from my account. What I need to be doing is rebalancing my portfolio every year.
Not using rebate sites when shopping online
It surprises me how many people don’t use free sites like Ebates or Great Canadian Rebates before making purchases online. It’s so easy to take that extra step to click through to your favourite online stores by using one of those two websites – and you can save a pretty large amount of money. I saved $35 on my recent Intrepid Travel booking, stores like Sephora often have 8% cash back offers, and during big events like Black Friday, these online rebate stores start offering double cash back with some merchants.
Over the years with Great Canadian Rebates, I’ve earned $1,465, and with Ebates I’ve earned $72. Granted, some of that has been through referrals, but a significant portion has been money saved on purchases.
Forgetting to mail in rebate offers
I’ve done this at least twice in my life. Once was with that $75 mail-in rebate on the laptop that I mentioned at the beginning of this article, and another one was a $50 mail-in rebate for a Palm (remember those?). Filling out those rebate forms takes less than 10 minutes… and if you’re too lazy for something like that, you’re a sucker. Companies love it when people walk away from free money, and it still makes my blood boil that I was one of those people.
Waiting until the last minute to pay bills
This happened to me a few times last year. I wasn’t on top of my bills while I was away, and ended up paying a little bit of interest due to two late payments on my cell phone. It was only a few dollars, but it was something completely avoidable.
Failing to comparison shop
These days, I probably take comparison shopping to the extreme, but it wasn’t always like that. And not everybody shares my enthusiasm for trying to get the best deal. I remember when Nic rented a Porsche in Germany so we could drive on the autobahn. When I asked him what other companies were charging for a similar rental deal, he got a little sheepish and admitted he didn’t look to see if he had gotten the best price. He just saw it, and booked it.
I hate not knowing I got the best price for something, so I’m a bit relentless when it comes to comparing prices. Once I online stalked a pair of boots for 8 months until I finally found an acceptable price ($100 off).
Passing on price adjustments
A lot of places offer a time frame where you can return an item for a refund or get a price adjustment. Sometimes that price adjustment can be quite significant. A few years ago I remember buying a top from Banana Republic at full price. Two days later, they had a sale for 40% off all regular priced items. I had my receipt in my purse still, so I walked in and got a refund for the difference. Price adjustment time limits can vary, so make sure you read the fine print on your receipt. Some places are generous and offer a 30-day window, but others are shorter (Banana Republic’s was 14 days).
Not asking for change back (or tipping too much)
We’ve all done this: you’re in a cab or you’re out for food, and you can’t break a bill or you decide to round up your total to make it an even number – knowing that you’ll be giving a much bigger tip than necessary. I used to do this all the time, and I’m still guilty of it from time to time.
A few weeks ago, I went to a cheaper salon and got my hair done. After tax, my hair cut came to less than $40, so I handed over a $50 bill and left it at that. I would normally tip my hair dresser $8, but she works at a much nicer, fancier salon. The tip I left this hair dresser was more than 25%, and was definitely a bit excessive.
Related: How much do you tip?
Not trying to negotiate a better deal
It never hurts to ask. You’d never buy a home or a car without negotiating the price first, would you? I always make sure to ask for a better price on apartment rentals, hotel rates (especially as a group booking), cell phone plans, car maintenance, and especially with purchases on sites like Craigslist. I expect people to haggle, so I can only assume everyone else expects it as well. Even just $5 or $10 off is better than nothing.
Nervous about it? Try being around an expert haggler to see how they act and what they say when they’re trying to negotiate a deal. My boss is an expert at it. I remember we were negotiating the purchase of a big item for the marketing department. The original quote we got was for $80,000. I managed to get the price down to $73,000 and was certain they wouldn’t go any lower, but once he got on the phone? He was able to wiggle his way down to $65,000.
Related: A beginner’s guide to haggling
Taking taxis instead of transit
On my trip to Toronto last month, I debated whether to take transit or a taxi from the airport into downtown. Most of my trips to Toronto have been business-related, so I’m often able to get full refunds for my taxi rides. This time around, I was tired and didn’t want to deal with the long commute (and walk) to where I was staying. But I did it anyway. For just $3 and an hour of my time, I was able to get downtown. A one-way taxi ride, including tip, would have cost me closer to $70.
In Europe last year, I only recall two times where I took a taxi – once when we were in Geneva late at night and needed to get to the French border where we were staying, but public transit had stopped running. The other time was in Istanbul (again, very late at night) when we severely underestimated the time it would take to walk from the train station to the apartment where we were staying, and the owner was waiting up for us to let us in.