9 Dangerous Financial Assumptions to Avoid

We all have bad habits.

We leave our laundry on the bathroom floor. We bite our nails. We swear a little too often. We hit the snooze button four times in a row.

But perhaps the most dangerous? Bad money habits.

Money habits can be difficult to break. Heck, sometimes they can be difficult to recognize just because they’re so ingrained in our day-to-day lives.

But now’s the time to pinpoint these dangerous financial habits — and break them — so you can stop missing out on a whole bunch of money.

1. You Leave Your Money in a Savings Account

You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice.

But maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, .09% is nothing these days.)

But a debit card called Aspiration lets you earn up to 5% cash back and up to 11 times the average interest on the money in your account.

Not too shabby!

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

2. You Don’t Put Aside $1M For Your Family

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school? Now’s a good time to start planning for the future by looking into a term life insurance policy.

A lot of us assume our savings are enough. Or that this is something to worry about later, because right now, you don’t have the time or money for that. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $16 a month. The peace of mind of knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

3. You Don’t Put $5 in the Stock Market

Take a look at the Forbes Richest People list, and you’ll notice almost all the billionaires have one thing in common — they own another company.

But if you work for a living and don’t happen to have millions of dollars lying around, you’re probably assuming this is totally out of reach.

That’s why a lot of people use the app Stash. It lets you be a part of something that’s normally exclusive to the richest of the rich — buying pieces of other companies for as little as $1.

That’s right — you can invest in pieces of well-known companies, such as Amazon, Google or Apple, for as little as $5.

The best part? When these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.

It takes two minutes to sign up, plus Stash will give you a $5 sign-up bonus once you deposit $5 into your account.

4. You Keep a Low Credit Score — For No Reason

We get it. It’s so easy to dismiss your credit score. There’s nothing you can do about it anyway, right? Eventually it’ll take care of itself.

But as soon as you go to buy a home, take out a car loan or even open a credit card, you’ll immediately regret these assumptions.

The truth is, your credit score plays a large role in some of your biggest financial decisions, but it doesn’t have to be that difficult to get it on track, thanks to a free website called Credit Sesame.

Within two minutes, you’ll get access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).

James Cooper, of Atlanta, used Credit Sesame to raise his credit score nearly 300 points in six months.* “They showed me the ins and outs — how to dot the I’s and cross the T’s,” he said.

Getting your free credit score takes less than two minutes.

5. You Assume You Already Know Everything

When it comes to handling your money, it’s important to continue learning. It sounds cheesy, but it’s all too easy to assume you already know everything you need to know.

Instead, push yourself to learn more about investing, saving and budgeting through websites, podcasts and books.

Here are a few of our recommendations (besides The penny Hoarder, of course):

• “How to Money” podcast
• “The Total Money Makeover” by Dave Ramsey
• “The Side Hustle Show” podcast
• “Rich Dad, Poor Dad” by Robert Kiyosaki
• “The Money Nerds Podcast”
• “The Richest Man in Babylon” by George Samuel

6. You Keep Wasting Hundreds on Homeowner’s Insurance

You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy.

This isn’t something you actively think about. You just know you’re required to have it, so you’re stuck with it forever, right?

Wrong. The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying.

In fact, it saves users an average of $690 a year — or $57.50 a month. It’ll even help you break up with your old insurance company. (You’re allowed to cancel your policy at any time, and your company should issue you a refund.)

And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.

Just answer a few questions about your home to get started.

7. You Haven’t Canceled Your Car Insurance

People love to tell you to shop around. “You should be getting three different quotes to get the best price on car insurance,” they say.

Sure, this sounds like good advice. Here’s why it’s wrong: Comparing only three companies isn’t nearly enough. We suggest comparing dozens. But who has time for that?

A digital marketplace called SmartFinancial will do it for you. You could be getting rates as low as $22 a month — and saving yourself more than $700 a year. 

It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side. Yep — in just one minute you could save yourself $715 this year. That’s some major cash back in your pocket.

So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.

8. You Leave Behind $225 Every Month

No matter who you are or what your budget looks like, it’s always nice to have some extra income. But how are you going to do that without a raise?

Well, what if we told you a research company would pay you to watch cooking videos on your computer?

It’s too good to be true, right?

But we’re serious. InboxDollars will pay you to watch short video clips online. One minute you might watch someone bake brownies and the next you might get the latest updates on Kardashian drama.

All you have to do is choose which videos you want to watch and answer a few quick questions about them afterward.

No, InboxDollars won’t replace your full-time job, but it’s something easy you can do while you’re already on the couch tonight wasting time on your phone. It’s possible to earn up to $225 per month watching these videos.

It’s already paid its users more than $56 million.

It takes about one minute to sign up, and you’ll immediately get a $5 bonus to get you started.

9. You Pay More Than $5/Month for Cell Service

Many of us assume we’re just stuck paying $100-plus for cell phone service each month, but there are actually plenty of discount options out there — that really do work.

How long have you been with your current company? Probably a while, right? Which means you’re probably paying way too much.

But we found a discount wireless company called Tello Mobile that offers plans starting at just $5 a month. How much are you paying now? Exactly. Imagine cutting that to just $5.

Tello recently switched to a nationwide GSM network, which means improved 4G LTE/5G coverage, faster data speed and a more stable network. It lets you choose a wireless plan based on how many minutes and how much data you want, and you can even use Tello’s coverage tool to see how strong its network is where you live. More than 7,000 customers have given it an excellent rating on Trustpilot.

Plus, Tello is super flexible. It lets you choose the plan that makes sense for you. Plans are priced based on how much data and how many minutes you want. For example, a family of four can get 2GB of data each, plus unlimited talk and text for just $56 a month total. Free hotspot and unlimited texts are included in every plan. Plus, there are no early termination or activation fees, no contracts or phone-exclusive plans and no tricks of any kind.

It’s easy to get started and see how much you could save. Tello makes it simple to switch and even keep your phone number. No need to even leave the house — you can do everything online. You can bring your own GSM phone or buy a new one through them. See how much you could save.

Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder.

*Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.

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