How to Avoid Frugality That Turns Costly
While saving money is almost always a good thing, there are a few circumstances where frugality can end up costing you money. In the following 10 instances, thrifty ambitions can actually end up backfiring -- and hurting you financially.
1. Buying used baby products. When it comes to cribs, car seats and high chairs, it's safer to spend more than buy the cheapest items you can find. Although baby products are heavily regulated by the U.S. Consumer Product Safety Commission, recalls often occur and the standards on what is considered safe change. The high chair you found at a garage sale or thrift store may look sturdy, but for all you know, it was recalled three years ago because the screws sometimes come loose. Not only could you end up endangering your child, but you might have to buy a replacement.
2. Skimping on footwear. Cheap and uncomfortable shoes not only hurt, but they can lead to blisters and calluses. You want to find a good fit with a high quality shoe to avoid future trips to the podiatrist's office. Cheap shoes also tend to fall apart more quickly. Save yourself money, and buy a quality pair the first time.
3. Buying health insurance with the lowest premium. Of course, it's better to have not-so-great health insurance than no health insurance at all. But if you're comparison shopping between plans, don't automatically select the one with the cheapest premiums, because doing so could end up costing you in the end. If you end up paying more for doctor's visits, or even worse, skipping visits because you don't like the in-network health care providers, then that cheap policy will cost you.
4. Not writing a will. Your decision to forgo a will won't personally cost you a dime, but you could end up leaving a lot less to your family and friends. That's because your estate could go through the court system and lose money in legal fees along the way. Instead, get your affairs in order in advance for the benefit of your loved ones.
5. DIY appliance delivery. Sometimes consumers try to cut corners by transporting appliances themselves if the merchant doesn't offer free delivery. If you can borrow a friend's truck and avoid the delivery and installation charge, why not? Keep in mind that when you pay for delivery, the company is responsible for the appliance until it's installed. If you transport it yourself, and especially if you haven't purchased a warranty to cover accidents, you are taking a risk that you or a friend might drop and damage it.
6. Buying something because it's interest-free for a while. It's tempting to buy something with a zero-interest window, like a "90-day, same-as-cash" offer, in which you're charged no interest if you pay for the product within 90 days. However, many people don't end up saving the money, and they end up paying more in accumulated interest. Instead, just save your money and make the purchase, if you really want it, when you have the cash on hand.
7. Not going to the doctor when you're sick. This is a classic money (and health) mistake. You may have a treatable problem that goes undiagnosed and eventually becomes not so treatable. And it isn't just appointments with your general practitioner. Regular eye exams and dental checkups can shield you from bigger costs down the road.
8. Leasing a car. In the short term, leasing a car might appear to be cheaper than purchasing one. But consumers typically get locked into making lease payments over a certain time period, even if their car needs change. Plus, when your lease ends, the car is no longer yours, so you have nothing to show for those monthly payments.
9. Going with a cheaper mover. Hiring movers at a cut-rate price, at least without doing your homework, can be an expensive mistake. Cheap movers can show up with a truck that's too small or not enough workers to handle all the items. You might even end up paying much more than the initial estimate.
10. Not putting much money, or any money, away for retirement. You don't need a lecture on how important it is to save for retirement. But if your employer has offered to match your contributions, and you leave that money on the table, you're giving up the chance to potentially receive thousands of dollars each year. You may be hanging onto your money right now, but you're definitely losing out in the long run.