Common money mistakes and how to avoid them

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When it comes to managing money most of us will admit to making the odd mistake now and again, but make too many and you could soon be out of pocket. Here, we highlight some common money mistakes made by Australians and teach you how to avoid them in the future.

  • Sticking with the same car insurer each year

You may be tempted to accept your insurer's renewal quote each year, but by comparing car insurance prices and switching to another provider could save you hundreds of dollars. RateCity's Bi-Annual Car Insurance Comparison revealed that consumers could save as much as $700 by comparing quotes online.

  • Regularly using a credit card

Australians racked up a new debt record of almost $50 billion in May, withdrew $2 billion via cash advances in the year to April and wasted $1.3 billion in credit card fees in 2010. If you're delinquent with debt, start by keeping an eye on your balance to avoid going over your limit, never miss a monthly repayment and avoid cash advances at all costs.

  • Not keeping track of transactions

Using foreign banks' ATMs, paying account-keeping fees and unintentionally overdrawing accounts are easily avoidable, but costly mistakes. Read through statements and switch to accounts with low or no fees and you're likely to find big savings.

  • Not saving as much as you should

There is lots of competition between banks, which are offering some great saving rates to attract new business at the moment. Look for a high-interest option which rewards regular deposits and has low fees.

  • Sticking to the big banks

It's easy to be guided by clever advertising campaigns when making financial decisions and so the major four banks, with their big advertising budgets, may be front of mind. But the smaller institutions are hungry for your business too and offer some of the most competitive rates on the market to get it, so shop around.

  • Perpetually in the red

With a growing number of online transactions made in recent years, many requiring a credit card for payment, it's easy to forget that real money is being exchanged. Before swiping, establish a repayment plan and pay down all debts during interest-free periods.

  • Paying your mortgage monthly

Depending on your provider, increasing your monthly mortgage repayments to fortnightly could save you tens of thousands of dollars over time. Check with your lender and start paying more today.

  • Don't have roadside assistance

Roadside assistance will set you back around $80 per year, yet many motorists drive without it. This service typically covers breakdown towing, flat battery assistance, emergency fuel supply and key retrieval; all handy features on the road. Some car insurance providers offer this service as an add-on to your policy.

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