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Are your finances on autopilot?
Friday, June 15th, 2012

Miss Money Beeby April Lewis-Parks

Most people operate under the mindset, “If it isn’t broke, don’t fix it.” This can be a great way to set a routine that works for you and keep to a schedule that helps you avoid forgetting about responsibilities, but when you apply this mindset to your finances, you may be missing out on opportunities to improve yourself and bolster your savings account.

There are several signs that you may be losing out on chances to improve your finances. If you answer “yes” to these points, it may be time to revamp your approach.

1. You don’t open your credit card statements
If you just blindly pay your minimum balance each billing cycle without opening your mail, you may not even be aware of recent changes that have hit your account, such as interest rate increases. This can result in you paying a higher rate and spending more money on interest charges. Instead, pick a day to look over your statements and contact your lender to try to negotiate a lower rate. This can help slash how much interest you pay and help you put more money into savings each month.

2. You’ve had the same service providers for years
There is something to be said for loyalty. But when staying with the same company forces you to miss out on money-saving opportunities, it may be time to say goodbye. Many people who have carried the same insurance, cell phone, cable or electricity provider for years don’t question the prices they are paying. However, these service providers may introduce new affordable packages and other providers may have lowered their prices. In addition, as your credit standing improves, you may be in line for more affordable insurance rates. Take some time to contact your providers and find out if you qualify for better packages. Shopping around may also alert you to better offers that may be available.

3. You follow the same budget each month
As your financial circumstances change – i.e. you pay off your credit cards, get a raise or accomplish a savings goal – your budget should change. Sticking to the same budget each month does not allow you to allocate your resources properly. If you’re used to having a certain amount of spending money each month and you find yourself with a windfall, inadequate planning may prompt you to spend it on shoes when it could be used to accomplish other goals.

There are certain times you should put your finances on autopilot. Following a strict timeline of paying your bills is one example. Taking a day to review your credit card statements or credit report is another.  When it comes to your budget and financial planning, it can be helpful to assess your standing every month to determine if changes need to be made.

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