I recently read an article that listed “10 dumb little budgeting mistakes you need to stop making”. I think that all of us have made one or more of these mistakes at one point in our lives. I know I have. With the Christmas season right around the corner, I felt I should share it with you.

However, there are a couple of things I would like to add to the list.

The author mentions withholding too much in taxes as a common mistake, but to expand on it, think about this. It’s nice to get that big refund check at the end of the tax season, but since the IRS doesn’t pay interest, essentially you are loaning your money to the government, interest free.

The first thing you need to do is lower your withholdings to a comfortable level. If you are getting a refund of more than $1000, you are withholding too much. Then estimate the difference between what you were withholding and how much you are withholding now. Take the difference and invest it.

Even if you only made $20 from your investment, that’s still $20 you didn’t have before.

The author also mentions negotiating your cell phone bill. Let me add one more thing. It’s common for people to agree to a 2-year contract just for getting a free phone, although people are wising up and it’s less common than it used to be. But consider this. The monthly fees for these contracts are often $20-$40 more than what you would pay for a month to month plan and people think they are getting a steal.

But even at $20 a month, you will have paid an additional $480 over 2 years for your “free” phone. Quality smartphones can be purchased for as little as $100. In fact, I bought my last LG phone for $100 and got a $50 rebate on top of that. It may not be as big as the iPhone or some of the Android models, but it works just as well and has the same features most free phones have. And the monthly fee is only $40 for unlimited everything, all fees and taxes included. It would cost me $60 a month on a contract. I saved $860 overall, $960 minus the $100 I paid for the phone.

To learn some other mistakes you be making, visit the link below.