Have you ever found that you saved a lot of money in the short term, but ended up spending a lot more over the long term than what you planned? This is the subject of today’s post and we will illustrate a few guidelines you may want to consider before you make that decision to save a few dollars today vs. spend money now that will save you a lot over the long term. An example is a good way to illustrate what we are really talking about.
With the cost of repairs and wages for appliance repairs these days being so high, would you pay $100 to $200 to have an old appliance repaired vs. go out and purchase a new one. The right answer depends on what the cost of a new appliance would cost you. If a new fridge for example would cost you $2000, you might consider spending money on repairs particularly if the current one is less than 10 years old. On the other hand if your current fridge is 25 years old and a new fridge to replace it is around $1000, well a consumer might decide that the best course of action is to buy the new fridge rather than put money into the old fridge.
We have compiled a list of 10 things people do were they try to save money now only to find they spend a lot more later!
Delaying Regular Check-Ups With the Doctor, Dentist or Optician
For many people who have health plans this is not even something they think about, but for literally millions of people without plans it is something they think about every day. Fro example, should I go to the dentist to have my teeth cleaned or not? What about cavities that are forming which could lead to root canals! A root canal can really cost a lot of money! Not going to the doctor can mean a serious illness or even your life if whatever you have is life threatening such as cancer. Saving a few hundred dollars now by not going to the doctor or dentist could be catastrophic for you later on in life!
Signing up for Store Credit Cards Offering Discounts, but Paying the Minimum
Obtaining the discounts can be a great way to save money, however if you do not pay the card off each month you could be paying 19% or even more in interest. It is amazing how quickly this interest is eats up any potential discount saving you might have received. This is why the stores do this. They know that the vast majority of people will not pay their credit cards on time and they make a lot of money this way. Take the discount, but pay the balance on the card on the due date or don’t sign up for the card!
Doing Your Own Taxes vs. a professionally prepared return
No one wants to pay more taxes than they need to. For many people who have a simple return, there probably is nothing wrong with doing your own taxes. However as soon as it gets complicated such as real estate sales or investment trades, hiring a professional to do your taxes could save you a lot more than the cost of the professional. In fact this is a good measure. do your own taxes first, then take the raw data to the professional and see what he or she comes up with. At the very least you will have confirmation you are doing it right. You may even save a great deal more money in reduced taxes.
Building an Emergency Fund and a Retirement Plan
Many people do not even have an emergency fund let alone a retirement fund. It is so important to have both so that you and your family have something to rely on in a sudden emergency as well as in retirement. It just makes so much sense! We often recommend to people to set 10% aside out of their paycheck for retirement. Invest it wisely and conservatively and save this 10% from every pay check. Take another 5% and put that into an emergency fund. Don’t touch either of these unless you really need to and you will be surprised at how fast they grow!
Buy Cheap Products to Save Money
How many times have your purchased some cheap thing only to use it once and have to throw it out! While we do not recommend buying the most expensive item, always buy quality or don’t buy it. It will cost more initially, but then you will have the item for many years. this applies to clothes, electronics, appliances and on and on.
Pay the Parking Meter and avoid a Parking Ticket
How many times have you received a parking ticket because you did not put money in the parking meter or not enough in the parking meter? A ticket for a parking infraction can cost a lot more than the couple dollars required to feed the meter!
Buy one Get one Free Deals and Other Sales
These are great deals if you need the item that is being offered. How many times do you take advantage of these buy one get one free deals and then end up throwing the second one out? Give some thought to whether you will use the products before you make the purchase. Same thing applies to big discount sales where you pick up multiple items, only to not use those items.
Driving Long distances to by cheap Gas or Other Bargains
Did you know that for a car that gets 30 miles to the gallon at current prices that every mile costs you 12 cents! Doesn’t sound like much, however if you drive 10 miles to get a deal and then have to return, that is 20 miles or $2.40 just for the gas, not to mention the wear and tear on your car. Add to that cost the price of a coffee perhaps or other things that you buy and did not need and it can be expensive.
Delaying Routine Car Maintenance
This is potentially a big one. Sure you may avoid spending a couple hundred dollars by not having your car checked for warn brakes and oil changes, but what happens when your brakes give out in a high speed stop? A big accident, and maybe loss of your car and possibly your life. Routine car maintenance can mean the difference between spending thousands of dollars to have it replaced due to an accident, or towed or to have additional work completed because you did not take care of the routine things.
Buying too much food; Then Throwing most of it Away
There are lots of deal were you can buy large quantities of food at cheap per unit prices. But it is only a deal if you use all of it. If you end up throwing a lot of this food out, you really end up spending more per unit than you might have paid for a smaller quantity. If you do buy in bulk, cook the food and freeze it or donate it to other members of the family. No sense in wasting good food.
Comments are welcome about your favorite money wasting experiences.
