Even if you’re super at budgeting and count every penny, you could be falling victim to a financial trap. Some of your money habits that feel wise (or even harmless) could be actually sabotaging your bank account. Read on to discover some eye-opening ways you may be wasting your money.
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Buying Premium Gas
Some people think that buying premium gas is better for their car, but often, that’s not true. Premium gas is meant for high-performance engines — like an eight-cylinder pickup truck or a sports car — which means that your typical passenger car doesn’t need it to perform efficiently. Plus, it won’t benefit a standard engine if you do buy it, as reported by USA Today. If you’re in doubt of whether you should fill up with premium, look up the recommended type of gas for your vehicle in the owner’s manual.
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Buying Unneeded Insurance
All kinds of insurance exists, but many times, you don’t need it. Before buying any type of insurance, research it to see if it’s worth your money or not. For example, rental car insurance may be a waste of money if your auto insurance policy or your credit card already offers coverage.
Also, if you have a vehicle that’s not worth much, it’s likely a waste of money to pay full-coverage premiums — especially if you have a sizable deductible, according to Forbes. For example, if you total your car that’s worth $4,000 and you selected a deductible of $2,500 to keep premiums low, you’d receive $1,500. You’d be better off saving the money you pay toward premiums in a high-yield savings account if you’re planning to keep the car for a few more years.
Paying Interest on Buy Now, Pay Later Plans
One of the big advantages of buy now, pay later (BNPL) plans is to avoid the interest that credit cards charge. However, depending on your credit, some BNPL plans may charge for financing. For example, if you opt for monthly payments with Affirm, you could pay up to 36% in interest, per their website. So if you make a large purchase that takes several years to complete, you’re really wasting money. You’d be better off saving the money to buy what you want and paying for it in cash.
Paying Convenience Fees for Instant Transfers
If you frequently use money transfer apps, such as CashApp and Venmo, you may have become blind to instant transfer fees. These fees can cost you 0.5% to 1.75% of the transfer, depending on the app you use. For example, for every $100 transaction sent from the app to your debit card, you’ll pay up to $1.75. While it may not seem like much per transaction, it can add up. Instead, consider using Zelle, which is generally fee-free between registered users, according to their website. However, if Zelle isn’t an option, consider doing a standard bank transfer — which is free but can take one to three days to complete, per Apple.
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This article originally appeared on GOBankingRates.com: 4 Surprising Ways You’re Wasting Your Money
