Saving money is something that everyone wants to do, but there are some pitfalls to saving that can actually cost you. Many of these mistakes are the result of trying to save money fast, or ignoring that the best way to save sometimes involves spending to avoid a big expense later.
Here are nine money-saving mistakes to avoid:
Mistake #1: Buying too much at the dollar store
Dollar store purchases can turn out to be money wasters, not money savers. While the price may seem cheap, some items may be expired or even unsafe. Shoddy goods can damage your home, cause a fire, or simply break easily. Carefully check any dollar store purchases to ensure that the item is not expired and seems sturdy.
Mistake #2: Fast food
While eating fast food is certainly cheaper than most other dining out options, you pay for a fast food habit in the long run with an increased risk for obesity and illness related to a high fat diet. While most people will eventually face medical costs, medical expenses for those with obesity are significantly higher than for people of a healthy weight.
Mistake #3: The buy-one, get-one deal and other promotions
Businesses sponsor promotions for only one reason: to get you to buy their products. Keep that in mind when considering promotional offers. Promotions or discounts on items that you would not ordinarily buy or use will probably cost you money, not save money. Especially avoid promotions that require signing up for an ongoing charge or membership fee after a promotional period ends. Most people forget to cancel their memberships after the trial period ends.
Mistake #4: Buying in bulk
Many people try to save money by buying in bulk at a warehouse store like Costco or Sam’s Club. While buying in bulk can mean that the per unit cost is less, you really only save money if you are going to use all of the product. If you do not eat all 10 pounds of potatoes before they spoil, you likely spent more money per potato that you ate than if you had bought your potatoes at the grocery store. Worse, warehouse stores encourage impulse buys of unneeded items along with bulk purchases.
Mistake #5: Too much do-it-yourself
In some areas, an inexperienced person can make drastic mistakes that end up costing a lot of money to fix. For example, avoid doing your own estate planning or plumbing unless you have some understanding of the field. In other areas, businesses are so efficient that there is not much to be gained by doing it yourself. After purchasing your own oil and oil filter, you may end up spending just as much as if you had paid a quick oil change place to do the job, for example.
Mistake #6: Cutting small out-of-pocket expense, but forgetting big expenses
For most people, their biggest expenses are their regular bills. However, when it comes to cutting costs, regular bills are often the last place they look. For example, it would take a great deal of coupon cutting to equal scaling back the cable bill by $20 a month.
Mistake #7: Leasing cars
A car’s lease payment may be less than the monthly payment on purchasing it, but that doesn’t mean you are saving money. In general, leasing is the most expensive way to own a car because after making three years of payments, you have nothing to show for it. On the flip side, after finishing with your last car payment after buying a car, you still own the car, which you can either resell or continue to drive.
Mistake #8: Skimping on important car maintenance
If you own a car, skimping on your car’s regular maintenance will end up costing you in the long run. By all means, use the cheapest oil change you can find, but don’t skip your oil change all together. Don’t avoid buying new tires when it’s necessary either, as bald tires are dangerous and can cause you to lose control of your car.
Mistake #9: Buying secondhand
While buying used goods is often a good way to save money, a lower price is never a better option if you can’t properly assess the conditions of the item. Purchasing a used car that has been inspected by a professional is a good idea, but buying secondhand items off of craigslist that have no way of being verified for quality is a bad idea. When buying secondhand, go through a reputable dealer, or make sure there’s a way to verify the quality.