I learn from my mistakes, but it's even better to avoid these pitfalls in the first place. I'd like to help you do the same. Here are a few ways we might think we're saving money that actually cost us more.
Taking Advantage of Deals Without a Plan
- Store Credit Card Sign-Up Offers
Almost every time I visit a retail store, I'm asked if I'd like to sign up for their store credit card and save 30% (or more) today. My personal aversion to credit cards has helped me avoid this one, but it's easy to see how people fall for the pitch. Sure, it's a deal... if you plan to pay the balance off immediately. If not, that 30% you "saved" translates into the additional expense of interest (and store credit cards average rates of 15% or more).
- Buying in Bulk
Buying in bulk can mean significant savings for families who burn quickly through a lot of key items, but the savings disappear when you don't have a plan for what you're buying. This is especially crucial for perishables. For instance, bunches of overripe bananas might be on sale, but are you going to eat those bananas within the next few days, freeze them, or bake them into banana bread? Even shelf-stable goods can go bad after a while. Throwing away something you saved money on turns into a waste of money.
Spending Money to Save Money
- BOGO Offers
Buy one, get one (BOGO) deals can be amazing. I get downright excited once a month when free-range chicken breast is BOGO at the grocery store. If I'm not cooking it that week, I can always freeze it for later. There are other times BOGO deals lead us to spend more than we normally would on items we don't even need though. For example, many of us have felt obligated to buy two pairs of shoes just because they were "buy one, get one half off". We didn't need another pair (or even like them sometimes!). It's important not to get so blindsided by the prospect of saving money that it causes us to exceed our budget or buy stuff we don't need.
- Wasting Fuel for Pennies
Have you ever driven more than 30 miles to save a few cents on gas, groceries, or pick up a cheap Craigslist item? You've just lost at least some of your savings in the form of fuel and wear on your vehicle. Going out of your way might be worth it for a good deal on an expensive item, but not when the difference is the matter of a few dollars. Save your fuel by price matching or using a rewards card at the gas pump, instead.
- Purchasing More for Free Shipping
Online retailers know consumers love to get free shipping and they use it against us: "If you spend (insert amount here), you'll qualify for free shipping." That's not to say you should never adjust your order, but do the math. If you're $6 or $7 away from free shipping, would shipping cost that much, anyway? Maybe you can add something to your cart for that amount only. There's sales tax to factor in, as well. On the other hand, if you intend to purchase an inexpensive item but end up buying significantly more to qualify for free shipping, you're paying for shipping (and then some).
It's good to look for ways to save money in our everyday lives, but it's also wise to make sure we're not spending more money in the process.
Are there other ways you've learned to avoid "saving" that actually cost more?