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The Financial Laziness That Cost Me £1,200 Last Year (And Probably You Too)




God, I hate admitting this.

But I've been throwing money away like confetti at a wedding, and the worst part? It's entirely my own fault. We're talking proper, hard-earned cash here – the kind you work overtime for, skip lunch for, stress about when the bills come in. And I've been handing it over to banks and insurance companies like some kind of financial charity case.

The thing is, I'm supposed to be good at this stuff. I'm literally paid to write about money for The Sun. Yet here I am, confessing that my own financial laziness has probably cost me over a grand this year alone. My mate Dave texted me last week: "Mate, you're like a mechanic with a broken car." He's not wrong.

Listen to the Content

Why Your Bank Loves Your Laziness (Spoiler: It's Not Cute)

Listen, I get it. Shopping around for financial products feels about as exciting as watching paint dry in slow motion. There's forms to fill, websites to navigate, phone calls with people who sound like they're reading from a script written in 1987.



But here's what really winds me up – banks are counting on this exact feeling.

They've built entire business models around our collective inability to be bothered. Your current account provider offers you insurance? Course they do. Mortgage? Absolutely. Investment platform? Why not! It's convenient, innit?

Except convenient usually means expensive. And expensive means you're basically funding some banker's third holiday home while you're trying to figure out how to afford your own rent.

I was moving house last month (nightmare doesn't even begin to cover it), so naturally I had to sort out home insurance. HSBC, my bank for the past eight years, quoted me £489 annually for a bog-standard three-bed semi.



Five minutes on Money Supermarket later? Same coverage for £236.

That's £253 I nearly threw away because I couldn't be bothered to click a few buttons. Embarrassing, really.

The Monthly Payment Trap That's Bleeding You Dry

Here's something that'll make your blood boil – paying monthly for insurance instead of annually is like volunteering to pay extra tax. The interest rates some of these companies charge for the privilege of spreading payments would make a loan shark blush.

I know, I know. Not everyone has £500 sitting around to pay insurance upfront. But if you can manage it, even if it means eating beans on toast for a week, you'll save yourself a proper chunk of change.



Same logic applies to mortgages, by teh way. If you're still with your original lender because switching seems like hassle, you're probably overpaying by thousands. NatWest wanted to charge me 4.7% on a £250,000 mortgage. Lloyds offered 4.32% for the exact same deal. That's £1,143 saved over two years just for filling out some paperwork.

And that's not even the best rate out there – some brokers can get you down to 3.72% if you know where to look.

£280 Billion Sitting There Doing Nothing

This one actually made me angry when I read it. AJ Bell found that there's £280 billion just sitting in current accounts earning absolutely nothing. Zero. Zilch. Nada.

Meanwhile, inflation is running at 3.5%, which means that money is literally shrinking in value every single day.



Your high street bank's savings account? Probably paying around 1.2% if you're lucky. That's like trying to fill a bucket with a massive hole in the bottom. On £5,000, you'd earn a whopping £60 in interest while losing £175 to inflation. Brilliant.

But stick that same money in a decent savings account paying 4.77%? You're looking at £239 annually. That's nearly four times more for doing literally nothing except opening an account somewhere else.

My £500 Investment Platform Disaster

Right, confession time. Remember how I said I should know better? Well, here's proof that even supposed experts can be complete muppets sometimes.

When I opened my first Stocks and Shares ISA back in 2019, I went with my bank because... well, because they were there. Seemed logical at the time. What I didn't realize was that they were quietly nicking 0.25% of my entire investment every quarter, plus trading fees, plus management charges.

On a £10,000 investment, that's £25 gone in the first three months alone. Then they'd take another chunk, and another, and another. By the end of the year, I'd handed over nearly £500 in fees for the privilege of them looking after my money.

I feel stupid now, but platforms like Trading 212 and InvestEngine charge absolutely nothing for the same service. Zero annual fees, zero trading charges. Even the fancy platforms like Interactive Investor only want £4.99 a month.

The maths is embarrassing when you work it out properly.

Stop Being a Financial Pushover

Look, I'm not saying you need to become some sort of comparison website obsessive who spends their weekends hunting for the best deals on everything. But spending an hour every six months checking if you're getting ripped off? That's just common sense.

Your bank isn't your friend. They're a business, and their job is to make money from you, not for you. The sooner you accept that, the sooner you can start keeping more of your own cash.

Before you start investing though – and this is important – make sure you've got at least two months' salary sitting in an easy-access savings account. Emergencies happen, boilers break, cars die... you need that safety net.

But once you've got that sorted? Stop letting your current provider take you for a ride. It's 2025, not 1985. Switching is easier than ever, and your future self will thank you for it.

Trust me on this one – I've learned the hard way.


Frequently Asked Questions

How does inflation affect the value of money?

Inflation refers to the general rise in prices over time, which erodes the purchasing power of money. As inflation increases, each unit of currency buys fewer goods and services, meaning that the value of money decreases in terms of what it can purchase.


What are the risks associated with investing in the stock market?

Investing in the stock market involves several risks, including market volatility, economic downturns, and company-specific factors that can lead to losses. Investors may also face liquidity risk, where they cannot sell an investment quickly without incurring a loss. Diversification and thorough research can help mitigate these risks.


What is the importance of financial literacy?

Financial literacy is essential for making informed decisions about budgeting, saving, investing, and managing debt. It empowers individuals to understand financial concepts, evaluate risks, and navigate complex financial products, leading to better financial stability and long-term wealth building.


What are the main functions of money?

The primary functions of money are as a medium of exchange, facilitating trade; a unit of account, which provides a standard measure of value; a store of value, allowing individuals to save and transfer purchasing power over time; and a standard of deferred payment, enabling credit transactions.


What is the definition of money?

Money is a medium of exchange that facilitates transactions for goods and services. It serves as a unit of account, a store of value, and a standard of deferred payment, allowing individuals to compare the value of diverse products and services.


How can I improve my credit score?

To improve your credit score, make timely payments on all debts, reduce credit card balances, avoid opening unnecessary credit accounts, and regularly check your credit report for errors, disputing any inaccuracies. Maintaining a mix of credit types and keeping old accounts open can also be beneficial.


What are credit scores and why are they important?

Credit scores are numerical representations of an individual's creditworthiness, calculated based on credit history, payment behavior, and debt levels. They are important because they impact the ability to obtain loans, credit cards, and favorable interest rates, affecting overall financial health.


Statistics

  • According to a survey by the Financial Industry Regulatory Authority (FINRA), about 66% of Americans could not correctly answer four basic financial literacy questions.
  • In 2020, the average retirement savings for Americans aged 60 to 69 was approximately $195,000, according to Fidelity.
  • A report by Bankrate indicated that only 29% of Americans have a written financial plan.
  • According to the Bureau of Labor Statistics, the average American spends about $1,500 per year on coffee.
  • Research by the National Bureau of Economic Research found that individuals who receive financial education are 25% more likely to save than those who do not.
  • According to the Federal Reserve, approximately 39% of Americans do not have enough savings to cover a $400 emergency expense.
  • According to a Gallup poll, 56% of Americans report that their financial situation is better than it was a year ago.
  • As of 2021, the average American household had approximately $8,400 in credit card debt, according to Experian.

External Links

ssa.gov

bankrate.com

bls.gov

finra.org

smartasset.com

nfcc.org

kiplinger.com

mint.com

How To

How To Manage Debt Wisely

Managing debt wisely involves understanding your financial obligations and creating a structured repayment plan. Begin by listing all debts from smallest to largest, including interest rates and minimum payments. Consider using the snowball method, where you focus on paying off the smallest debts first, which can provide motivation. Alternatively, the avalanche method prioritizes debts with the highest interest rates to minimize overall interest paid. Make consistent payments above the minimum on your chosen debts while maintaining regular payments on others. Additionally, consider consolidating high-interest debts into a single loan with a lower rate, which can simplify your payments and reduce interest costs.