Saving money can be addicting, but sometimes efforts to save money actually end up wasting money in the end.
It is something we have all done. But we can learn from our mistakes!
Here are some ways your efforts to save money may actually be costing you.
Trying to DIY
There are a lot of ways to save money, and DIY is certainly a money saver for many things. However, if you don’t know what you are doing, that remodel, fix or installation you try to do on your own will not only take longer, but you could end up spending more to have mistakes fixed and redone the right way. Dealing with plumbing or electrical or load-bearing walls requires skilled knowledge or you risk significant damage to your home.
Do-it-yourself things to avoid can also include complicated paperwork or legalities. If you have tax situations beyond the average person or that are stretching your skills, you will probably save more money (and potentially avoid penalties) by hiring a professional to do your taxes.
It feels great to find a great deal or to pay pennies on the dollar for the same things others pay a lot for. But often, buying cheap means buying temporary.
Cheap clothes often don’t fit well and wear out more quickly. For small kids that don’t care about fit and will outgrow their clothes in a few months, it’s not such a big deal. But if you want shoes to last more than a couple months and that wardrobe staple to survive several seasons, you should pay for better quality.
One year we tried a less expensive/lesser known brand of shoe for my son, as he’d grown out of the stage of being especially rough on jeans and shoes. But even at that, the cheaper shoes fell apart after 3 months and we were back at the store paying for a better brand.
For another example, if you are going to be making smoothies frequently, it really is worth it to pay more than $25 for a blender. We tried it and it was just frustrating to use and the motor burned out quickly. Paying for better quality and power was definitely worthwhile for us and isn’t wasting money.
Other items you needn’t buy top-of-the-line, but don’t want to go cheap include appliances, painting supplies, and mattresses.
Have you ever put off doing some routine maintenance? Maybe you skip doing maintenance on the lawn mower and end up having to replace it because you didn’t change the oil when you should have. (Not that I would know…)
When money is tight and schedules are packed, it is tempting to skip basic maintenance tasks. Failing to maintain your vehicle and home can lead to large repair bills down the road which is not how you want to be wasting money. Try setting up reminders in your calendar for different tasks such as changing the oil, cleaning the dryer vent, or getting that tune-up. You will save money in the long run by not skipping the small stuff.
Buying or stocking up things because they are on sale
Advertisers really know how to work consumers. How many times have you seen a BOGO sign and picked up an extra item, even if you don’t really need it? If something goes on sale you normally use, great. Stock up on only as much as will reasonably use before expires. Otherwise you are wasting money on buying something you normally wouldn’t, and it is money down the drain.
Trying to save on gas
Have you ever driven out of your way to save a few cents on gas? If so, chances are you may have lost that savings by just driving there.
Let’s say you live close to gas station A, drive by it frequently, and gas is $2.50/gallon there. But, you’ve heard gas station B, that is 25 miles away, has gas for $2.25/gallon. Your vehicle gets a whopping 19 mpg and will hold 20 gallons.
At gas station A, there is no extra mileage involved, so $2.50*20 = $50 for a tank. Gas station B you need to account for gas used to get there and back. So, the math is $2.25*20+((50/19) *$2.25) = 45+5.92 = $50.92. You’ve actually lost money, and probably even more because of the additional wear and tear on your vehicle from those extra miles. And you also lost all the time driving there and back.
“But wait!” you say. “I was going to that mega-store with the cheap gas anyhow.” If that is true, then the trip wasn’t really out of your way. Otherwise, you are justifying spending even more money at the mega-store as a reason for the trip for cheap gas.
Paying in installments
We’ve all seen the late night or even online ads where you can buy this great new product and pay with an easy installment plan. Usually, if you do the math you will see that these payments at up to significantly more than a one-time payment. The smaller hit to the monthly budget ends up costing you more in the end.
Buying more to get free shipping
Have you ever done this? I almost did the other day. I wanted a new pair of jeans (on sale!), and my daughter is outgrowing her clothes, so I also added a dress to the cart that was on clearance. If my total was $50 or more, I could get free shipping. Alas, my total was under $50.
So do I spend more money on things we don’t need in order to get free shipping, or pay shipping which would cost as much or more than the extra items needed to bump it up to free shipping level?
Sometimes the math will let you know. Other times, like for me, you decide you can wait a bit longer before buying. Or maybe even drive to the store and avoid shipping altogether.
Paying extra for perceived quality
Just as you don’t want to waste money by buying items that are poorly made, you also don’t want to waste money by buying expensive items for their perceived quality.
An example is a dutch oven. You will find people raving in forums about how well their Le Creuset French oven handles roasts and stews, and how it is worth every penny its price tag. But the budget friendly Lodge Dutch oven is rated very well and the price point is easier to swallow (I have the blue one!).
It is possible to find quality items without overpaying. The high end product may be great, but if you are trying to save money, it may be possible to find a similar quality item for less.
Have you done something to save money that was actually wasting money in the long run?