The Most Common Money Saving Mistakes

18 November 2014

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In our exuberance and unbridled enthusiasm to save money, I'm not afraid to admit that some of us go a little overboard. Frugal is one thing, but some of us are cheap beyond all rationality. I'm talking to the point such an approach actually begins to cost us money.

Below, you'll find a number of ways that trying so hard to save money can often be a fool's errand and self-defeating prophecy.

D.I.Y. Home Repairs

Some home repairs are easy and worth doing yourself. For example, fixing a minor hole in the wall is no problem, according to eHow and most plumbing issues can be easily taken care of, thanks to this little guide from Life Hacker, but there are absolutely some repairs you should never do without a professional because it can end up costing you much more than you save not to. Not to mention, some of these jobs can be pretty dangerous and not worth the risk.

HowStuffWorks.com goes through their Top Five Home Repairs You Should Never Do Yourself and they include electrical work, thanks to the danger of live wires and potential to screw up your home's circuitry and turn it into a fire hazard, roof repairs, on account of potentially falling off, gas appliance repairs, since you could blow up your home, asbestos removal, due to the long-term health effects, and plumbing repairs, where you actually have to weld pipes and reroute the plumbing system. Oh, and did we mention water damage can cost thousands of dollars if it's not caught in time?

Everything for a Dollar All the Freakin' Time

Some people swear by the dollar store like it's a divine miracle, which is fine if all that you're buying there are items of no consequence. However, if you find yourself picking up electrical appliances, such as extension cords, lamps and other things that typically come with safety standard labels, watch out because these products could be counterfeit and those labels could be fake.

The last thing anyone needs is overloaded electrical wires and appliances causing fires in their home. Plus, we've all had the experience of buying something from the dollar store and having it break right out of the package. Also, make sure you check those expiration dates on any food or over-the-counter medication you buy for a dollar because some of those items are known to be past their expiry and best before dates.

Beware of B.O.G.O.

Sometimes things are just free with no strings attached – like when McDonald's locations in Connecticut gave away free fries – but often “free” comes at a price. This especially true when you have to spend money to qualify for a free offer like in the case of “Buy One, Get One Free” deals or, the ever popular, “Free Shipping for Orders Over __ Amount of Dollars”

Free does things to our emotions because we think it has no downside and it makes us feel good, so, as a consequence, free often makes us reject what is actually a better deal.

Behavioural economist Dan Ariely, author of Predictably Irrational, found that when given a choice between a free $10 Amazon gift card or a $20 Amazon gift card costing $7, most people chose the $10 gift card for free, even though the $20 gift card is the better value.

“You actually get a $13 gift certificate for free, but this is camouflaged by the question. That word ‘free’ just shakes all rationality out of us,” says an article discussing Ariely's 2006 study.

So, be careful with “free” -- it may not be free at all.

The Dollar Menu

We know: “It's only a dollar, what harm can it do?” Well, it turns out quite a lot in the long run. Money saved during frequent trips to McDonald's, and other fast food joints, should probably be banked since you're going to need it later for your inevitably skyrocketing medical expenses. Not to mention, time you could be spending doing other things than managing your health.

A report from The Conference Board of Canada, evaluating healthcare spending among industrialized nations, says that obese people in the U.S. spend $1,400 more a year on their health than a person who is not obese.

Stockpiling

We've all seen them, those Costco shoppers who buy vats of mayonnaise and a lifetime supply of toilet paper, or those bargain hunters and extreme couponers who get toothbrushes and toothpaste for next to nothing. Both buy up so much at these stores that their garages start to look like a No Frills. Oh sure, they say they donate most of it to charity and give it away, but does it really save money?

Not when you buy so much you have enough food and toiletries for multiple lifetimes, so much that you can't possibly use it all. Every time you're unable to utilize all of your stockpile effectively, this is unequivocally money down the drain. Plus, did you ever think about how much time and gas it takes just to go hunting for bulk bargains?

What kind of money saving mistakes have you made? Tell us in the comments.

Photo credit: SnaPsi Сталкер

2 comments

  • Shawn M.
    Owning gigantic pet eyeballs is a mistake, too. They're notoriously expensive to feed and clothe.
    • Eva W.
      I wouldn't suggest it.

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