Is there a wrong way to save money? Maybe not, but there is a wise way to save.
Everyone loves saving money, cutting back, and reducing expenses. However, sometimes there is a tendency to focus on the wrong things. While you’re busy feeling good about reducing little costs here and there, every once in a while you neglect the larger picture. Here are some examples:
1. Saving money by not going to the doctor for regular check-ups (those $20 copayments can add up!) or taking the bare minimum health insurance plan, but having to pay a large sum in an emergency. (This goes for any necessary insurance, not just health.)
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2. Saving money by taking advantage of tens of thousands of dollars in 0% credit card balance transfer offers to gain a few hundred dollars, but being offered a higher mortgage percentage rate because of the temporary decrease in your credit score, costing thousands.
3. Receiving the 15% discount for opening a store credit card, but paying the balance off slowly, adding interest fees (and possibly late fees).
4. Locating the gas station with the lowest gas prices, but driving 20 minutes out of the way to save $0.05 per gallon, or, looking for the lowest gas prices but buying a vehicle with poor gas-mileage.
5. Saving several hundred dollars by not hiring a tax accountant to review complicated situations, but later owing the IRS thousands in fees and penalties.
7. Buying the least expensive clothing and shoes, but having to replace the wardrobe frequently because of poor quality.
8. Parking and “just running in” without feeding the meter a quarter, but returning to find a parking ticket attached to your windshield.
9. Spending hours completing online surveys or writing pay-per-posts for a few bucks each, while your time could be better spent improving skills to land a better job or developing a winning business plan.
10. Haggling for lower prices at a garage sale, but buying a new car to put in your own garage.
Updated March 8, 2018 and originally published October 13, 2006.