Tim Lemke* says it’s important to focus on financial details because each day we have the potential to lose money simply because we’re not paying attention.
They say the devil is in the details.
When it comes to your finances, this can certainly be true.
Each day, we have the potential to lose money simply because we aren’t paying attention.
We pay too much for items because we don’t notice how much they cost.
We lose money in fees or other charges because we don’t read the fine print on documents.
We may think this lack of attention to detail costs us just a dollar here or there.
But this carelessness can ultimately represent a great deal of money lost over time.
Let’s examine the ways that being detail-oriented can improve your financial situation.
You’ll know a good deal when you see it
If you pay close attention to what items cost, you’ll know when you see a good deal.
Even if you are not shopping for a specific item, take time to look at its price.
That way, when the time comes to make a purchase, you’ll have a sense of whether you may be overpaying.
If you are keenly aware of pricing, you may learn which retailers consistently have the best deals and which stores to avoid.
Depending on who you buy from, you may be able to automate this process by setting up price alerts via email or text.
You’ll notice when a cashier makes a mistake
I used to work as a cashier at an office supply store, and I was not particularly great at it.
At the end of the day, I often learned that I had made mistakes when giving change to customers.
Few customers ever noticed the errors, so it was their loss.
When you pay cash at a store, be sure to count your change before you leave.
Take care to remember which bills you used to pay.
If the math doesn’t make sense to you, don’t be afraid to let the cashier know.
In addition, be sure to review your receipt to ensure you weren’t accidentally charged more than once for an item.
You’ll know whether you’re paying too much to invest
When we invest, we often pay attention to prices and the basic return on investment.
But do we know how much money fund managers takes out as expenses?
Are we cognisant of what commissions we pay each time we trade?
These costs can take away several percentage points from our overall returns, potentially costing us thousands of dollars over time.
To get the maximum return on your investments, it’s wise to examine their overall rate of return with fees and expenses included.
You’ll see the ‘catch’ when there is one
Congratulations! Your pay-TV company just gave you free HBO.
But did you notice that it’s only for three months, and then you’ll be charged the full monthly fee?
Is that ‘free’ mobile phone really free, or did they roll the cost into your monthly bill?
Whenever a deal appears to be too good to be true, it usually is.
Read the fine print on anything you sign and be aware that rarely is anything truly free.
You’ll know what’s covered by insurance
Several years ago, the basement of my home flooded after our sump pump failed during a heavy rainstorm.
I assumed the damage would not be covered by insurance because I had not purchased extra flood insurance.
But, in reading the fine print of my policy, I learned that there was a special provision that covered me in the event of a failed sump pump.
If I had not taken the time to read the policy carefully, I may have been on the hook for thousands of dollars in renovations.
Insurance policies are complicated.
You may think you’re covered for certain things when you aren’t.
You may be covered for things you aren’t aware of.
Always be sure to read your policy so that when bad things happen, you feel confident that you’re properly insured.
And be sure to update your insurance plans if your life circumstances change.
You’ll notice errors in your credit report
Even if you have no intention of borrowing something, it’s good to review your credit reports when you can, because they may have incorrect information about your finances.
Your credit reports may also show you’ve been the victim of identity theft.
By conducting a detailed review of your credit reports, you can ensure that lenders have the most accurate picture of your financial situation.
You’ll be billed correctly
Have you ever been to the car mechanic and received a multi-page, itemised list of the work performed?
Have you ever been billed by a doctor’s office and seen a list of unfamiliar charges?
Sometimes, bills can show a lot of charges that you weren’t expecting.
It’s best to review these bills and identify each charge.
If you don’t understand something or an item seems unfamiliar, don’t pay the bill until you get an explanation.
You should never pay a bill without reviewing the charges first.
You know you’ll be paid correctly
If you have your pay cheque direct deposited into your bank account, you may not look at your pay slip regularly.
But your pay cheque is worth reviewing each time, just to be sure that you’re being paid the correct amount.
It’s also important to check if taxes or super contributions are being deducted correctly.
Checking pay cheques is especially important for hourly or freelance workers who may have inconsistent income.
You will pay the right amount of tax
Taxes are annoying, but they are a necessary part of living in a society.
And it’s crucial to be organised and detail oriented when filing them.
Mistakes on your taxes could end up in you paying too little tax, resulting in penalties.
Or, you could end up paying too much tax if you’re careless.
When claiming deductions, be sure to have proper documentation to justify them so you avoid getting in trouble.
* Tim Lemke is a personal finance writer and Content Manager for the US Chamber of Commerce Foundation.
This article first appeared at www.wisebread.com.
