The Finance Blogger

35% of Consumers Make this Money Mistake

money mistakeHow many automatic payments are you making every month? If you don’t know you’re not the only one. Over 35% of consumers do not know how many automatic monthly payments they make each month. This is a common money mistake.

These automatic payments are for subscriptions to magazines, membership services to gyms, automatic renewals for coffee shop memberships and more.

They often start associated with the service as a free trial. Many consumers forget to cancel it at the end of the free trial and they receive unexpected charges as a result. This is a pretty standard approach for many company’s who are trying to grow their business.

It turns out that generation X members are the most likely to have signed up for auto pay programs. Parents are more likely than none parents to be enrolled in such programs. Even people with higher education and income levels are more likely to be enrolled then those with lower incomes or education.

Why are people making this money mistake?

We are all inundated with offers of two months or three months free on some service. All we have to do is sign up and provide a credit card. The company that we’re dealing with is hoping that we will forget that we signed up for in the first place.

By the time we notice this recurring monthly payment, at the very least one or two months have gone by. If we don’t check our accounts on a regular basis it could be six months or year before we notice. At 10 or $20 a month this can add up to two or $300 a year. That’s a lot of money in my book.

If we have several of these it would not be long before we’re spending $1000 a year and not even realizing that we’re getting these recurring services. In fact we may have forgotten all about them. With so many people falling into this trap it is no wonder that companies take this approach.

Take a few minutes right now and examine all of the transactions that have taken place in all of your accounts over the past three months. Follow up on any that you don’t recognize. If there are recurring charges being deducted from your account, check to make sure that this is something that you really want.

You could save yourself $1000 a year without any problem. You could have enough money to go on a three or four day trip!

For more financial money mistakes to avoid, click here.

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