Money & Career

Six spooky financial traps to avoid

There’s nothing that scares me more than losing my hard-earned cash. The idea that I might be taken advantage of or that my money is somehow being wasted, well, that's more frightening than any Halloween story. Here are six money-suckers to avoid

red coin purse with hole

Masterfile

There’s nothing that scares me more than losing my hard-earned cash. The idea that I might be taken advantage of or that my money is somehow being wasted, well, that’s more frightening than any Halloween story. Here are six money-suckers to avoid:

1. Not having a will
Dying without a will means extra costs and hassles in settling your estate. It can leave your family financially burdened, possibly without access to the money they need to pay administrative bills, and cause them more emotional stress. Even scarier? The provincial government has the right to decide how your assets will be inherited and even more frightening, who will take care of your kids. Be proactive and get a will today. Find tips on how to do it here

2. Takeout hell
If you routinely buy your lunch or bring takeout home for dinner, then you could be spending hundreds of dollars a month — that’s thousands of dollars a year! That’s all well and good if you have money to burn, but if you prefer to spend your money elsewhere, cut back on your grab-and-go food expenditures. Here are some tips on how to avoid that money-eating monster.

3. Late charges
They are a procrastinator’s nightmare. If you end up paying your credit card, cable or phone bill even a few days late you will end up wasting your money on late fees. Avoid this trap by making sure you pay every bill as soon as it comes in or by setting up automated bill payments from your bank account.

4. Overpaying for insurance
A scary and true story: I was talking about home insurance with someone I know who owns a house twice as big as ours and his is on a huge lot. He told me he pays about half what we do every month for home insurance! We’re now reviewing our policy to make sure we’re getting a competitive rate and that we’re not over-insured. From life insurance to car insurance, shop around and make sure you are getting the best rate you can.

5. No emergency fund
Your roof just blew away in a storm and since you don’t have any money to cover the cost of a repair, you’re now in debt. An emergency fund is your safety net to avoid the financial impact of scary surprises like job loss, big home repairs or health emergencies. Make sure you have a financial cushion so that you’re not in the red if something unexpected occurs. Here are a few tips for building an emergency fund.

6. Credit report skeletons
There could be some financial skeletons lurking in your past that you didn’t even know were there, from missed payments to loan defaults. There could even be mistakes on your credit report that are dragging your score down. Check your credit report through one of Canada’s three major credit bureaus: Equifax Canada, TransUnion Canada, Northern Credit Bureaus Inc. If you see any errors, make sure you clear them up. That way when you go to apply for credit, you won’t get any spooky surprises that could see you turned down.