We know you are a smart person because you're listening to this podcast.  However, we all fall into money traps.  What is your money trap?

Via Forbes – Nancy Anderson

7 Common Money Traps Even Smart People Fall Into

Buying things on sale.

You may wonder why buying things on sale is a mistake! You might even ask me, “Wasn’t that one of the smart money moves you outlined in your smart spending post?”

Sales actually can be a huge money waster.  No matter what the price is or what a great bargain you got, if you purchased something you aren’t going to use, you just threw away your money.

I’ve purchased so many “bargains” at department stores or discount stores over the years that either weren’t really my style or didn’t go with anything else I had in my closet. Don’t make that mistake!

Tip — Ask yourself, “Would I be this excited about this purchase if it weren’t on sale? Would I buy this at full retail? Will I use this — a lot?”

Then and only then decide to make the purchase.

Buying stupid things.

Have you ever purchased an ashtray on a stand since you thought it might make a good planter? How about a bonsai or a macrame hammock? Have you ever bought a convertible sports car (which was way too small) followed by a sedan (which was way too big)? I have.

The plant stand went to charity, the bonsai died, the hammock rotted in the rain and the cars were sold and replaced with more sensible models. However, I’d love to have the money back from all the illogical and strange purchases I have made over the years.

Tip — Hold onto your wallet. Since we are all human, we are going to make mistakes, it’s part of life. Just try your best to limit them by having a criteria for purchases — especially big ones.

Throwing money at problems you can’t solve with money.

Do you know what makes your skin glow? Though I am not a dermatologist, I have found that exercise, spending a few minutes in the steam room at the gym, drinking a ton of water, getting a good night’s sleep and drinking nutrient-rich carrot juice works wonders for the complexion. Does an expensive skin cream help? Maybe, maybe not.

When you are feeling low, tired or sad, does online shopping make you feel better? Maybe. But so does calling a friend, walking around the block and petting your dog.

Tip —  Stop and think if you are trying to solve a “problem” with a purchase. Ask yourself if there are other things you can do instead throwing money around.

 

Not spending when you have an opportunity.

Why work so hard if you aren’t going to spend your money on what can add great value to your life? A few years ago, some dear friends of ours were married in a fifteenth-century cathedral in Alicante, Spain.

Guess who wasn’t there? Us!

At the time, the expense of the trip hindered us from going. In hindsight, it would have definitely been worth it.

Tip — Spend money on the important things

Not maximizing points and rewards.

When I used to travel for business, I had all the hotel and airline points a girl could want. Now, I enjoy sleeping in my own bed every night, but miss my points, bonuses and discounts.

I could get them through a rewards credit card instead. By not putting purchases on a rewards credit card, I’ve missed out on free airline tickets, hotel nights and gift certificates.

Just be sure to pay off the balance each month so you aren’t paying finance charges to get points!

Tip — If you are disciplined enough to pay off your balance every month, charge your purchases on a robust rewards credit card to take advantage of points or cash back.

Not setting up automatic savings outside of your 401(k).

Common advice is to pay yourself first, but that’s easier said than done.