11 Financial Tricks You Shouldn’t Fall For This April Fool’s Day

Even if you think you have a strong handle on your money, there are tricky financial mistakes lurking everywhere. And sometimes, you don’t even know you’re falling for them. It’s a classic case of, “you don’t know what you don’t know.” 

I’ll uncover some of the costliest financial tricks you might be falling for, plus show you exactly how to fix them.

Assuming your checking account balance is growing

11 Financial Tricks You Shouldn't Fall For - Assuming your checking account balance is growing

Interest rates have been low for quite some time. While that’s good news when you need to borrow money, those rock-bottom rates aren’t helping your money in the bank. Don’t just deposit cash into your regular checking account and assume you’re going to earn significant yields.

Instead, keep just enough cash in there to cover around two months of living expenses. The rest should go into a high-yield savings account so that your balance actually grows on its own. 

Paying for more insurance than you actually need

Overpaying for insurance is an easy financial trick to fall for. After all, the more your house or car is protected, the better — right? This isn’t always the case; in fact, it’s entirely possible to overpay. To make sure your coverage is the right amount, shop around (at least every six months) to compare insurance rates. Consider using an online comparison platform like Policygenius to get multiple insurance offers with just one application form.

Also look for easy discounts, like bundling home and auto policies. You can also lower your premiums by opting for a higher deductible, especially if you don’t expect to make frequent claims on your policy.  

Waiting until you make “real money” to invest

11 Financial Tricks You Shouldn't Fall For - Waiting until you make

Don’t get trapped into thinking that investing is only for high earners. In fact, the earlier you start investing with any amount of money, the longer you’ll be able to take advantage of long-term compounded growth

In fact, there are a couple of benefits you’ll enjoy if you start investing now, rather than waiting to earn “real money.” First, even your small investments will grow exponentially and could eventually earn more than you actually contribute. Another advantage is that you set up the habit of investing and have your accounts ready to go to increase your amount as you earn more. 

Finally, you’ll gain a better understanding of market cycles. Investing with smaller amounts at first gives you more experience on how you like to invest without risking as much. Plus, you’ll start to see how the market can drop and rebound, giving you a better long-term outlook on your portfolio. 

Only making minimum credit card payments

It may seem like you’re staying on top of your finances when you make your minimum credit card payment each month, but in reality, it can take years to pay off your balance if you only pay the minimum. Plus, the total cost of interest could amount to hundreds or even thousands of dollars. That’s not even counting any additional charges you add to your card as time goes by.

Look at your total credit card debt and devote as much money as you can to making extra payments each month. Then you can start diverting money to better financial goals rather than seeing that balance continue to grow as new interest is charged each month. 

Missing payments for bill due dates

11 Financial Tricks You Shouldn't Fall For - Missing payments for bill due dates

Forgetting to pay your bills on time may just seem like a bad habit, but it actually carries several potential financial consequences that can eat away at your ability to save. First, you could quickly accrue a late fee each time you forget to pay a bill on its due date. Some companies may have grace periods, while others may charge the fee as soon as the next day. 

Another negative impact of missing your payments is the damage it can do to your credit score. This typically applies to loan and credit card payments. Creditors don’t report payments on your report until they are 30 days past due. But after that, you’ll keep accruing negative entries for each 30-day period the bill goes unpaid. All of those entries cause greater damage to your credit score. 

Overspending on “buy now, pay later” purchases

Online point of sale loans can be attractive, especially when you go to checkout your cart and discover you can spread out payments over the next several weeks. And while this feature may be good for some people when used strategically, it can also lead to trouble if you don’t pay attention to how much short-term debt you’re accumulating.

Avoid splurging on things that you can’t afford in full. Also carefully track multiple balances you owe, or commit to only making one “pay later” purchase at a time. 

Dipping into your emergency fund for non-emergencies

11 Financial Tricks You Shouldn't Fall For - Dipping into your emergency fund

Having an emergency fund squirreled away is a great achievement, but it can be extremely tempting to dip into the extra cash for non-emergencies, like going on a shopping spree or holding yourself over until your next paycheck. 

Move that money to an account at a different bank than your normal checking so that it’s more difficult to access. That will help you be more disciplined in reserving those funds for true times of hardship, like an unexpected emergency room visit or car repair. Also, remember to replenish your emergency fund anytime you use that cash so you’re prepared for the next unexpected event. 

Underestimating the cost of homeownership

Buying a house can be a great financial move, especially since property values tend to appreciate over the long-term. But switching from renting to homeownership isn’t always a smooth transition. There are a lot of extra costs you’ll encounter, like closing costs at the time of purchase, plus ongoing expenses like maintenance and repairs, taxes, and homeowners insurance

When getting mortgage quotes from a lender, look at the total monthly payment amount, not just the principal and interest. Also, expect to put away at least 1% of the value of the home each year to go towards home maintenance projects. 

Letting your health insurance benefits go to waste

11 Financial Tricks You Shouldn't Fall For - Letting your health insurance benefits go to waste

Hopefully, you have health insurance. If you do, you may be missing out on some common benefits. Annual wellness visits are usually included in your coverage so definitely take advantage of this yearly perk. Also, look for holistic treatments that may be covered by your plan. Many policies cover things like acupuncture, chiropractic care, and massage therapy. Check to see what’s included in your plan and how many visits are covered each year. 

Keeping the same interest rate for your loans

Taking out a loan and never thinking about interest rates again can cause you to pay a lot more than you need to. Interest rates are constantly changing and you can refinance your loans, including your mortgage, auto loan, private student loans, or personal loans, to potentially get a lower rate. 

Keep a list of your current rates on all of your balances, then track interest rate news every month or two. Refinancing a loan does often come with some type of cost, so it’s not something you actually do every month. But if you notice a big rate drop compared to what you’re currently paying, that’s a trigger to do some more digging into whether a refinance could save you money.

Living in financial limbo

11 Financial Tricks You Shouldn't Fall For - Living in financial limbo

A final financial pitfall to avoid is only thinking about your most short-term money issues, like paying your bills this month or making that minimum credit card payment. Instead, think about your mid-term and long-term goals and identify steps to help you achieve them. 

Maybe it’s reworking your budget to pay off your debt more aggressively. Or maybe it’s finally enrolling in your company 401(k) so you can kickstart your retirement savings. Make a step-by-step financial plan, then start checking off those action items one at a time.


Managing your finances is no joke, which is why it’s important to always look for ways to maximize your money. Stop falling for these tricks and instead set yourself up for a rosy outlook across all of your accounts.

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