Spending less is always a good thing, isn’t it? Well actually, the answer may sometimes be no. In certain circumstances, being cheap can cost you big money down the road.
Many times when people act frugally they forget the hidden ways that cutting corners today can cost you money tomorrow. So you don’t fall prey to the pitfalls of being frugal, watch out these 10 ways your thrifty habits can backfire.
Buying Cheap Food
Your waistline and your health will benefit from fresh foods and if you’re flexible in your eating habits, you can still enjoy good food without going over your grocery store budget.
Fresh meat, vegetables and dairy products are more expensive than their pre-packaged counterparts, but nutritious food is worth the added expense.
Slashing Your Budget Too Much
While you may not miss items you cut from your budget initially, underestimating your expenses will ultimately cause your master plan to fail.
For example, shaving your grocery store budget too much may work for a couple weeks until you have run out of staples and need to make additional trips to the store to re-stock.
If you love to clip coupons you probably do it for the savings at the register. Unfortunately, if you get too extreme with your couponing, you could end up with a stockpile of items you’ll never really use.
Remember, it’s not that good of a deal if you buy 4 and get the 5th free. Only coupon for items you’d buy anyway and never purchase more than you can use before the sell by date.
While it’s tempting to opt for the bare minimum level of coverage on your insurances to save money on premiums, it may not be the right way to save money for you.
If an emergency comes up or if you get into a car accident, you’ll be looking at huge out-of-pocket costs and enormous deductibles that will void your savings and put a strain on your budget.
Skipping Yearly Checkups
When it comes to health, an ounce of prevention is worth a pound of cure. While skipping your yearly checkup seems tempting today, the sacrifice to your health may not be worth it.
The same applies for all your family members and don’t forget the dog either.
Buying Cheaper Big-Ticket Items
If you need to spend money on something expensive, it’s best to just get a good model and get it over with. By getting the cheaper alternative it will end up costing you in the long run.
Take a car for example, buying a cheap car will save you money today, but could cost you more in the long run than a good car because of repairs and maintenance costs.
Likewise, buying a cheap TV from an unknown brand can end up costing you more because your set may fail prematurely. A warranty won’t matter either if the company’s already out of business.
Putting Off Car Maintenance Or Repairs
Routine maintenance is required to keep your car running at its best. It’s also helpful for catching small problems that you may not notice on your own. When fixed early, most small car issues won’t become catastrophic issues down the line which means you’ll save money.
By saving money on delaying that rattling noise or small leak, you could possibly be ignoring a major issue and you could put yourself in danger as well.
Shopping At A Warehouse Club
Warehouse clubs are great for businesses and people with large families, but for a lot of people the bulk sizes aren’t realistic. When shopping at a warehouse store, always look at the use by date and figure out if you can realistically use the item before it expires. If you can’t, the bulk pricing may not be such a great deal after all.
Increasing Your Deductibles
While increasing your deductible on your homeowners or auto insurance will lower your monthly premiums, it’s a risky proposition. In the event you need to file a claim the cost of the high deductible will be a hard pill to swallow.
For example, if you have a $2,000 deductible on your auto insurance policy then any fender bender or broken dash will all be your responsibility to fix.
Using Daily Deal Sites
Daily deal websites like Groupon or LivingSocial offer huge discounts on services, products and events. At least at first glance they do. Often times, a deal advertised at 50% off isn’t what it appears to be. The seller has simply inflated their “retail value” up by 50% and you’re really not getting a good deal at all.
But even if the offer truly is a good deal, by using these sites you can easily spend hundreds of dollars a year on things you weren’t planning on spending on at all. All this just so you don’t pass up on a so-called great deal.