5 costly mistakes we all make

Watch out for these silly money mistakes we all make!

Even though I’m the editor of the best financial website in the world (aka lovemoney.com), I have been known to make the odd costly mistake.

Taking out a fixed rate mortgage back in 2007, for example. Making a £10 claim on my home insurance (which then pushed up my annual premium by £350). Accidentally leaving my mobile phone in my jeans, and putting my jeans in the tumble dryer.

Despite the fact that I consider myself to be pretty financially savvy, the list goes on....

Of course, I’m not alone. In fact, new research by Microsoft has revealed that the total cost of such silly mistakes comes to around £4.4 billion each year.

So which mistakes should you be particularly aware of? And how can you avoid the costs associated with them?

#1 mistake: Breaking or losing a mobile phone

According to Microsoft, 26% of us have broken or lost a mobile phone in the past year.

Not only do you have to fork out for a replacement phone in this situation, you are also legally responsible for all the calls made on the phone until the moment you reported it lost or stolen. This could potentially add up to thousands of pounds in costs!

The obvious way to avoid this nightmare is to keep your phone safe – especially when you are abroad, as that is where bills can mount up the quickest in a short space of time. If you are in any doubt as to the whereabouts of your phone, call your provider immediately and ask them to place a block on your phone so that outgoing calls cannot be made. If you find it again, you can easily get it removed.

It’s also well worth registering your mobile phone details at immobilise.com. It’s a free register which is used by the UK police forces to identify the owners of lost and stolen goods. Write down the IMEI (which stand for International Mobile Equipment Identity) code somewhere safe as well. This is a 17 or 15 digit code that is unique to your phone, so it will allow you (or the police) to identify your phone if it is lost or stolen. To find out the IMEI code, type * # 0 6 # on your mobile.

#2 Forgetting to return a DVD or library book

One in five people have made this mistake in the last year. On DVDs in particular, the penalties can quickly mount up, leaving you wishing you’d bought the stupid disc in the first place.

It seems to me there are two easy ways to avoid this. The first is to ditch the library and go online. For example, if you join a DVD lending site such as lovefilm.com or Tesco DVD rental, you’ll get up to two DVDs a month for £3.99 (which is similar to the typical cost of borrowing two DVDs from a library), and you can keep them for as long as you want, with no late fees.

The second is to find an easy way of reminding yourself. Most mobile phones allow you to set yourself reminders in the calendar section these days, and some email providers (such as gmail) offer this free function as well.

#3 Mistakenly putting diesel in a petrol car

Don’t laugh – it’s estimated that 150,000 drivers put the wrong fuel in their car each year. That’s one driver every three and a half minutes. And as the cost of putting this right can be in the region of £200, it’s an expensive mistake to make!

To avoid making it yourself, even if you feel a bit stupid doing so, you could put a sticker on the inside of your petrol flap or on the cap, stating the type of fuel in big letters. That way, whenever you come to fill it, you’ll read a not-so-subtle reminder.

If you do put the wrong fuel in, don’t turn on the engine or start the ignition. According to the AA, this will circulate the contaminated fuel and increase the risk of the damage. Visit the misfuelling section of the AA website for more help.

#4 Locking house keys inside your home, and car keys inside your car

Around one in 10 of us have made this mistake, and it can be vastly expensive, especially when it comes to cars.

I’m speaking from experience here – while on a roadtrip with my father around the States a few years ago, we accidentally locked the keys in our hire car in a desert in the middle of California, cheerfully called Death Valley. We waited five hours for the locksmith to arrive in the baking heat - and the call-out fee alone cost more than £1,000.

There’s a simple solution: get a spare made, and keep it safe. Assess the weak spots of your car – can you lock the front doors from the inside (i.e. from the back doors)? If so, take care never to do this unless you have the keys in your hand. And sign up with a reliable car breakdown service that includes this sort of cover at a reasonable price (shop around for the best policy, then go through a cashback website to get a further discount).

If you do find yourself locked out, don’t attempt to break in yourself. You could cause permanent damage to your vehicle!

#5 Losing a wallet or a purse

Again, one in ten of us have made this mistake recently. Not only do you lose any cash you had in there, but you have to go through the hassle – and the anxiety – of calling up all your different credit card/debit card providers to cancel them.  

Plus any membership/loyalty cards you have in there need to replaced. And what about photos of loved ones? When my mother had her purse stolen, the thing she regretted losing the most were the irreplaceable photographs of my grandparents she kept in there.

One way to avoid this particular sort of pain (if you don’t want to stop carrying the photos) is to scan them in and upload them onto a photo gift website, where you can buy card sized reprints.

As for your cards, simply write down a list of all the numbers and contact details for each card provider and try to keep it up-to-date. Remember, the earlier you can report the crime, the quicker the card provider can shut down the card and protect your money.

If you don’t want the hassle of cancelling each card individually, opt for a card protection service. A typical plan costs £35 a year and allows you to register your cards with a single body, which then deals with your providers for you. So you will then be able to cancel all your cards with a single phonecall. The best policies include locksmith cover if you lose your keys and allow you to spend up to £200 replacing your handbag or wallet.

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