By Felicity Duncan.We all make plenty of mistakes when it comes to our money. After all, we're only human, with all the perceptual biases, cognitive quirks, and behavioural limitations that entails. But there's one mistake that – in my opinion at least – is the worst of the bunch..This mistake costs us all a small fortune and encourages bad behaviour on the part of our financial counter-parties, like banks, fund managers, and insurance companies. In that way, it erodes the performance of the financial industry as a whole, as well as our personal financial performance..___STEADY_PAYWALL___.On the plus side, unlike some of our deeper perceptual biases, which are very difficult to fight, it's also a mistake that we can fairly easily overcome..The mistake is a simple one: inertia. We humans have a tendency, once we've made a decision such as choosing a bank or a favourite brand of toothpaste, to stick with it without further thought. It's usually only when disaster strikes that we revisit our choices, and by then we've already paid the price for our intellectual laziness..Inertia and us.All humans are subject to the desire for inertia. Making active decisions is very cognitively demanding. We have to invest time and energy in identifying and weighing alternatives, and then we have to actively make a choice and deal with the emotional consequences of doing so..Therefore, we try to limit our active decisions. We drive the same route to work, order the same meal at our favourite restaurant, and buy the same brand and type of toothpaste whenever our current tube runs out..When it comes to toothpaste, of course, inertia is not much a problem. There may, conceivably, be a brand out there that's better than the one you're using. But the marginal benefit of slightly better toothpaste is probably lower than the cost of figuring out which type that is..When it comes to our finances, however, inertia can be a costly mistake..Consider, for example, this fact: According to Hippo.co.za, of the 16 million South Africans with cash savings, nearly 6.5 million have chosen to put this cash into bank savings accounts that pay below-inflation interest rates..Read also: Money tips: How to avoid going broke in a fast-paced world – Dawn Ridler.I can imagine how this happens. You have a savings account, and whenever you have some spare cash, you automatically pop it into that account. Every now and then you see some interest income on your account statement, and you feel generally good about it all. The impact of inflation is slow and insidious, so you probably don't notice that the value of your savings is actually slowly declining every year. Switching accounts or choosing a different type of savings vehicle is a complicated task, so you just allow the situation to continue on autopilot..This has two very bad effects. First, you slowly lose money, which is obviously very serious. But equally important, the bank gets away with paying you low interest. Instead of being forced to compete for your savings by offering a good interest rate, the bank gets to hold onto your money and – in a sense – slowly steal it. This makes the entire banking system worse..Read also: Unshackling from money problems: First steps to financial freedom.This situation plays out in a hundred ways. Every month, you pay your bank charges without seriously reviewing how much you're spending and how much you could save by switching. You pay for an insurance product or a service you don't need because cancelling it is too much trouble. You tell yourself it is "only" a few hundred or a few thousand rand and that it won't make a difference in the grand scheme of things. And all the while, you get poorer while the financial industry gets lazier and less competitive..Fixing the problem.Happily, inertia is an easy problem to fix..All you need to do is commit to a regular review of your financial life. I like to do it twice a year – at my birthday and at Christmas (which works out to every six months, as I'm a June baby). Once or twice a year, sit down and review all of your accounts, insurance policies, savings plans, and financial products. For each one, work out how much it costs you and then ask yourself if it's really something you need. Spend a few hours online comparing the costs and benefits of rivals. Then, if it's appropriate, commit to switching or cancelling any accounts or policies that don't financial sense for you. If that seems overwhelming, you can just commit to making one change every six months..Please note that I am not advocating trying to time the market, which is something no rational being should attempt. Rather, I'm saying that you should make sure that you are spending and investing your money in ways that will benefit you long-term. If you have money in a low-interest savings account, consider moving it to something that offers you better potential returns. If you're spending a fortune on current account fees, see if it makes sense to switch banks..Fighting your own inertia will not only help you save money and achieve greater financial success. It will also help make the financial system leaner and better for everyone.