Some financial blunders are obvious, such as buying luxury items you can’t afford. Others are harder to spot. it’s possible to buy something you think is a good deal at first, and then find it was actually more costly than you imagined. Here are a few financial mistakes that can seem like good ideas until you look at the total price tag.
Some stores try to get customers to rent furniture for a monthly payment that seems affordable, often with the promise that you’ll own the item after a couple years. The problem is that this arrangement is expensive in the long term. The Washington Post reported that renting furniture this way can amount to paying more than 100 percent a year in interest. In fact, you can end up paying thousands of dollars more than an item’s usual sale price, and if you aren’t able to keep up with the payments, the furniture will be repossessed and you’ll lose a significant amount of cash. Instead of renting, look for affordable furniture in thrift shops and garage sales or on sites like Craigslist and Freecycle.
Buying Identity Theft Insurance
Another financial mistake is buying identity theft insurance. Companies claim they’ll pay you for losses you incur if your identity is stolen, but what they don’t tell you is there are already laws in place to protect you. For example, Kiplinger reported that if your credit card information is stolen and used fraudulently, the most you can be required to pay is $50, and usually, credit card companies don’t make you pay it. There are steps you can take to protect yourself from identity theft, such as requesting free credit reports, and there’s no need to go through an insurance company or credit monitoring service.
Buying Over-the-Counter Medications in Bulk
You may have heard that you should buy things in bulk to save money, and that’s often good advice. However, it depends what you’re buying. Certain products can actually be more expensive if you buy in bulk, such as over-the-counter medications. U.S. News & World Report explained that if you buy bulk quantities of medications, they’re likely to expire before you can use them up. Then you’ve wasted money on medications you have to throw out. A better idea is to buy smaller amounts of generic medications, which are less expensive than comparable brand-name products.
Buying Expensive Exercise Equipment
Sometimes people buy exercise equipment, then don’t use it regularly or find that it doesn’t improve their health as much as they expected. The Federal Trade Commission advised consumers to look at the full cost of any equipment they see advertised, including fees, delivery charges, and taxes, and to beware of ads that claim a fitness product will make you lose weight easily. In most cases, people can meet their fitness goals with relatively affordable products like running shoes and hand weights, and there’s no need to order a special machine.
Researching can help you avoid these and other financial blunders. Before making a purchase, look for alternative ways to get the items you need. Then, choose the option that provides the best value.