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Paying bank fees
Bank fees are inevitable but why are you throwing money away here? These are charges that slip away from us and the money you spend may be more than you have to pay.
If you don’t like the rates you receive – find another bank that suits your pocket. Gone are the day where you have a relationship with your banker, so the loyalty no longer exists. You might be able to negotiate a better deal if you have been a long-standing client. Talk to your bank and see what they say. Don’t push too hard though, they will not listen if you do that.
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Paying credit card or over draft fees
Buying on credit (or over draft) is never a brilliant idea but sometimes necessary. The key word there is “sometimes”. This means that it is a temporary solution. One of the most expensive way to run a business is in over draft. You pay heavy bank charges for this action that could be put to greater use elsewhere.
If you find it necessary to go down this road for finance, make sure you have a timeline to pay back the money as fast as possible. This could potentially save you a lot of money in the long run. Staying “in the black” will also help your credit history with the bank although they will not be in a rush to get it back.
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Latest cell phone
We all like that latest gadgets. We all know that, but this has got its limits. Do you really need the cell phone contract with the 1000 minutes and the 25GB data? You are more interested in the phone that is available than the money that you will spend on it.
At the end of the contract with your service provider, if your phone is still working 100%, don’t buy a new phone. Rather take a package suited to your needs and keep the phone you have and love. NOTE: If you are hard wearing and you limp to the end of that contract, get a contract but think before you run for the latest and greatest.
There are many businesses and business owners that have multiple contracts. This does not make sense financially. If you require your staff to have a phone, rather give them an allowance to use their own phone than buying them one.
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Credit limit
DO NOT increase you credit limit EVER. If a supplier or bank allows you to spend on credit with them, keep within that limit. Don’t let them extend it. This is a sure-fire way to get into trouble financially. If you extend the credit, you are running into more debt that you may not be able to get out of.
If you see that you are eligible to have more credit, say NO. No one can extend your limit without your permission and the necessary credit checks on your business. You are only liable for the credit that was approved by the lender and that you agreed to.
Are you throwing money away in one of these 4 ways? Tell us which one and if there is another way you can tell us!
The article was updated in February 2023