The Biggest Waste Of Your Money

The economy might be recovering, but plenty of us
still feel a bit broke and few of us have money to
burn.
So why are so many of us wasting our cash? And
when I say us, I mean me.
I recently realised that a credit scoring service has
been taking money from my account even though I
have not actually used it in (whispers) three years.
Credit checking services are useful but I have been
accessing mine elsewhere and not used this one
since the company asked for a copy of my marriage
certificate, which I forgot to send.
That’s £10 a month I have been paying for three
years. That’s £360 I have wasted because it slowly
dripped out of my account without me really noticing.
£360!
Now, before you rush to the comments to tell me I’m
an idiot, I’d like to point out that I am not alone. A
worryingly high number of us waste cash by failing to
cancel services and subscriptions we no longer need.
Around 3.6 million Brits are paying unnecessary bills,
with the average victim forking out an extra £70 a
month in unnecessary and forgotten direct debits,
suggest research carried out last year by price
comparison website moneysupermarket.
Here are some other examples of when we pay for
things we don't use
Gym no-shows
Almost half of gym members don't go, wasting
around £350 a year each, according to to research by
thinkmoney. And 19% of UK adults pay for a gym
subscription, yet more than one in ten of them
admits that they hardly ever go.
Most of them say they ‘plan on going soon’, but
others simply haven’t got round to cancelling or feel
too guilty to cancel.
"Rather than simply cancelling their contract or direct
debit it seems that most of us have convinced
ourselves that we will go to the gym – starting
tomorrow!" said Thinkmoney’s Ian Williams.
"It makes sense to review all the direct debits leaving
your current account at least once every few months
and check that you really are using the things you are
paying for."
Pointless phone contracts
The moneysupermarket research showed that 17% of
people pay for a phone contract they don’t need. For
some, that’s because they’ve allowed a contract to
drift on even after they’ve taken out a new one.
However, plenty of people were wasting cash in a
less obvious way by continuing to pay full price for a
phone contract after they became eligible for
renewal. That means they were paying extra even
though they had already covered the cost of their
handset. Others simply paid for more texts and
minutes than they really needed.
Useless utilities
Could you be paying for services that you no longer
use? The moneysupermarket research showed that
one in five people admit still paying unnecessary bills
for utilities they never use. I suspect that’s what my
£10 monthly charge would come under.
Unnecessary insurance
The same research showed that 16% of people are
paying for insurance they don’t need. Before you
scoff and say that you aren’t, it’s worth checking
whether you’re paying for insurance that you already
have.
After all, many packaged current accounts include
perks such as free breakdown or mobile insurance,
so it’s worth double-checking that you aren’t
spending money on insurance you don’t need.
So what can you do?
Don’t assume that you’re safe and that everyone who
forgets a direct debit has more money than sense.
The research proves that this is a relatively common
phenomenon – direct debits make paying bills easier,
but they also make them easier to forget.
Here are some tips for staying on top of your direct
debits, and avoiding unnecessary payments.
• If you spot a relatively small amount leaving your
account each month then don’t delay chasing it up
and cancelling it – these payments might be small but
they soon add up to an amount that will make you
kick yourself.
• When you sign up for a free trial that rolls into an
ongoing contract, make a note in your calendar or set
an alarm on your phone to remind you to cancel it
before you automatically subscribe.
• Think seriously about your monthly commitments.
Is it worth paying for that gym membership or
magazine subscription if you don’t use it? Consider
scrapping any expenses you’re not that committed to.
• Find out your rights. Don’t just cancel a subscription
without checking whether or not you’re allowed to
escape the contract early; you don’t want to pay
penalties on top of the wasted money.
• Spend some time each week or month looking at
your current account. If you don’t recognise the
incomings and outgoings then find out more.
What do you think? Are direct debits a help or a
hindrance? Do people who forget to cancel
subscriptions simply have more money than sense?
Have your say using the comments below.