Being frugal is often seen as a smart move on the journey to financial stability. However, not all frugal habits are necessary. Some may even end up costing you more in the long run.
Instead of being frugal and miserable, be frugal with things that save you money without sacrificing your happiness. However, with frugality, knowing which habits to avoid is just as important. Here are frugal habits that, despite saving you money, make little to no impact on your financial well-being. Avoid these habits at all costs.
1. Skimping on Health Insurance
It’s tempting to opt for the cheapest health insurance plan to take home a higher paycheck. However, doing so will cost you more per doctor visit. Expect to spend over $300,000 for your healthcare alone throughout your life. It’s not smart to be cheap with your healthcare because, at some point, you will spend more money. Unless you’re under 25, purchasing cheap healthcare doesn’t make sense.
2. Purchasing Low-Quality Shoes
You don’t have to purchase $200 sneakers, but purchasing low-quality shoes that will most likely make walking uncomfortable isn’t worth it. If you feel you can’t afford to spend $50 or more on a decent pair of sneakers, consider reviewing your budget to see where you can save extra money.
3. Ignoring Car Maintenance
Skipping your oil change or not replacing your car battery may seem convenient in the short term, but it will eventually cost you money and time. You don’t need to be a mechanic to maintain your car properly. Nowadays, most modern cars alert you when you need to perform an oil change or set a reminder to do it every three to six months, depending on the car oil you use.
To stay on the safe side, ask your local car dealership or mechanic to check your car’s oil levels and upcoming maintenance requirements.
4. Extreme Couponing for Unnecessary Items
Couponing seems smart until it consumes a lot of your time. For example, spending a few minutes browsing for any items you plan to purchase that may be on sale is smart. However, it’s not smart to buy from brand names you don’t enjoy simply because you’ll save a few bucks. Be smart enough to actively know the stores offering the best pricing and avoid spending too much time forcing yourself to act on coupon deals.
5. Purchasing Poor-Quality Electronics
Cheap electronics will often cost you more in the long run. If you use a laptop for work, purchasing a $500 laptop over one costing $1,000 may seem smart. However, if the cheaper laptop can’t run the programs you need or performs slowly, it’ll take longer to complete your tasks. Ultimately, cheaper electronics can cost you time and money.
6. Delaying Home Repairs
Home repairs aren’t cheap. On average, homeowners spend $10,000 or more annually on home repairs. However, delaying your home repairs for too long can end up costing you more in the long run. Additionally, your home may lose value if you ignore key components like a roof or plumbing.
7. Eating Unhealthy Food
Who doesn’t love a tasty hamburger? No matter what doctors tell us, it is hard to avoid fast food completely. However, you may lose two-fold if you eat fast food regularly. Eating too much fast food can lead to health issues in the future, and it may cost you more than making meals at home.
With inflation, fast food is no longer cheap. Some meals now cost over $10. If you want to save money, consider making meals at home.
8. Overdoing DIY Solutions
While results may vary, DIY solutions can backfire if you’re not an expert. If you’re handy with tools and enjoy changing your car’s oil, it may be worth doing it yourself.
However, if you’re not handy or don’t enjoy working with cars, changing your oil to save a few bucks will actually cost you time and money. You run the risk of misplacing car pieces or ruining parts. Plus, you’re not saving money if you’re spending two hours changing your motor oil.
9. Avoiding Professional Financial Advice
It’s true. Not paying for expensive financial advice is smart. However, if you’re in debt or are clueless about retirement, not seeking advice from a financial professional to save money isn’t. You don’t have to pay monthly for financial advice either, but delaying retirement savings costs you money.
10. Underinsuring Valuable Possessions
If you pay a high price for an item, not purchasing insurance for it isn’t smart. Think about it: Losing a $4,000 engagement ring without insurance means losing thousands of dollars. You’re better off paying a monthly fee to have some sort of recourse. However, if you’re careful with your phone or never break it, you’re better off not insuring it and saving this money instead.
11. Skipping Regular Dental Checkups
Going to the dentist for a routine checkup can feel like a drag. However, avoiding it can lead to costly outcomes. For example, you may ignore treatable diseases until they become a serious issue. By the time you have serious symptoms, you’ll most likely end up paying hundreds or even thousands of dollars to treat them.
12. Underinvesting in Professional Development
It may seem a cliche that the best investment is yourself, but it’s true. If you cheap out on buying books or taking courses to learn new things but happily purchase designer clothes, you’re not being smart.
Being frugal in professional development doesn’t mean not spending money. It also implies spending your time. Take 30–60 minutes each day to listen to podcasts, read the news, or watch something that can help you level up.
13. Skipping Your Annual Physical
Like the dentist, skipping your annual physical isn’t smart. Even if you have to pay for your visit mostly out of pocket, it is worth every penny. Catching diseases or bad habits early on is scary, but it’s far better than the alternative. Don’t be frugal with money or time when it comes to your health.
14. Not Saving for Retirement
The traditional 401(k) doesn’t live up to its promise as it did a decade or so ago. However, saving for retirement continues to be a smart move. One problem 401(k) retirement accounts have is waiting till you’re 65 to withdraw your money. Additionally, you’ll give Uncle Sam an undeserved cut of your capital gains.
You’re better off saving your money in a Roth. However, a 401(k) is still better than nothing. If you’re contributing less than 5% toward retirement each paycheck to save a few bucks, it’s not worth it.
15. Paying off Loans Early
Paying your loan off too early is costing you a lot of money. Why? Consider that you are eliminating your debt, which is good, but you’re also paying all the interest for the loan.
For example, if you take out a $10,000 loan at 7%, you would pay over $600 in interest alone in year one. Instead of making advance payments, pay extra money toward your principal. This way, your interest diminishes over time. Simply put, paying your loan without accounting for the principle is the equivalent of paying a lender quickly for their interest.
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