We love a good money saving tip. When you’re living on a budget, saving a few dollars here and there can make a big difference. Some money saving tips are pretty sound (like research a product before buying and finding it for the lowest price). Other money saving tips can backfire and end up costing you more in the long run.
This week, April Dykman of Get Rich Slowly wrote about this topic: “7 Money-saving strategies that can cost you more.” While the strategies she discusses can certainly help to save you money, you have to be very careful how you utilize them.
“1. Buying a coupon to save money later.
A great example of this scenario is Groupon or LivingSocial. The deals hit your inbox, and one piques your interest. […] So you buy it, and then you forget about it. The expiration date comes and goes. This has happened to me a couple of times, so my new rule is to only buy Groupons for services that I’d use anyway or places that I already love. For instance, when I’ve bought Groupons to my favorite restaurant, I’ve always redeemed them.”
Groupon and LivingSocial are great. They have some amazing deals and can really save you money, but it will only save you money if you would have spent the money anyway. If you were going to go to a restaurant and spend money there regardless of the coupon, then yes, finding a deal to save you some money is great. But if you are spending money just to get a deal on something you never would have done if you had to pay full price, it’s better to skip.
“2. Buying more to get a discount.
A lot of online retailers will coax you into buying just a little bit more with their discount offers. For instance, if I just purchase $20 more, I can get 15 percent off or free shipping. […] But the problem is that you can spend more money than you would’ve spent without the coupon. For instance, if I need $20 more in my cart to get free shipping, and shipping costs $8, then I’m paying $20 to save $8, which is $12 more than I would’ve paid without the coupon. In fact, I didn’t save; I spent more.”
I (Dawn) am guilty of this one (in fact I just made a purchase last week where I bought two items more than I was planning to get free shipping). When shopping online, shipping can be a huge expense, so it makes sense to want to try to avoid it. But if you are just throwing stuff into your cart to reach that elusive “free shipping” threshold, you may want to stop and think of the cost (Would you really be saving money on the total order? Is the final cost for the items you actually need plus shipping going to be more or less than the “free shipping” amount?
“3. Paying more to invest in quality.
More expensive doesn’t always mean higher quality. […] Expensive isn’t always better. Unless you do a bit of research, you might think you’re paying more to invest in quality, when really, you’re just paying more.”
Do you research. You can more than likely find reviews of different products online that can help you decide what is actually the higher quality product, regardless of price.
“4. Paying less to save money now.
Sometimes it does make sense to pay more. If you’re trying to save money by going with the cheapest item, that can cost more in the long run.”
Again, do your research. While getting a quality item for cheapest price you can is often a good idea, getting the cheapest item available often is a bad idea.
“5. Buying extra to save over time.
Buying in bulk is a good way to save money, but only if you actually use it.”
This is especially important if you are buying perishable food in bulk. Be careful not to buy more than your family can eat before the food goes bad.
“6. Buying something that’s too good of a deal to pass up.
Sales and clearance racks can be deceptive. […] Even though I got a great discount, I wasn’t saving money. Those items would hang in my closet, unworn and unloved. Eventually, I ruthlessly cleaned out my closet and got rid of those sad reminders of how much I’d spent on those great ‘deals.’”
People often buy items off the sale or clearance rack that they didn’t set out for. You went to the store for a winter jacket and came home with a summer shirt because it was on the clearance rack. While not inherently a bad idea (I’ve bought clothes for a few dollars off the clearance rack that I wear all the time), make sure you are buying it because you really like it, not just because it’s cheap. I know from experience that if you don’t really love the item or it’s not very comfortable, it will go to waste, and even if it only cost you $5, that’s still $5 down the drain.
The above money saving tips can save you money if utilized correctly. Make sure to think things through before making a purchase!
- Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.