We all like to save money (well, some of us), but there are times when the frugal option ends up costing you more money. Follow these rules of the road to make sure your frugality doesn’t drain your bank account.
1. Don’t Skip Maintenance or Preventive Care
Skip taking your car for servicing or your health checkup, and it could end up costing you much more than you’d spend on the maintenance itself.
Skip checkups with your doctors, and you could be setting yourself up for days in the hospital, with millions of naira in bills. With your car, it’s an entirely different story. Wait till it breaks down, and you’ll be spending way more than you could have, if you took it for regular servicing.
2. 50 Percent Off Is Still 50 Percent On
It’s science: bargain hunting can be addictive.
Between the thrill of the hunt, and the feel-good chemical release from the reward centers of your brain when you find a deal, you are physiologically rewarded. And it can get costly. One of things we see often is people use [frugality] as an excuse to buy things they don’t need.
Whether it’s on sale or you have a coupon, you end up spending money just because something appears to be a great deal. Avoid bargain brain — and its potential to cost you — with a trusty purchase pause. Walk away for 24 hours and see if you’re still thinking about it when the clock comes back around. Often, the urge will have passed.
3. Don’t Cheap Out on Insurance
It’s easy to skimp on many types of insurance — life, or even health — because you’re hoping never to use it anyway. But if you’re getting the bare minimum [coverage], you could be putting yourself at risk.
The question to ask yourself is whether you or your family could afford to replace the underlying asset — your car, home, belongings, or (in the case of life, health, and disability insurance) your income — without hardship. If the answer is no, spending money on a policy that doesn’t cover your needs is almost as useless as not buying one at all.
4. Learn the Difference Between Value and a Low Price
The latter might put a smile on your face the day you make your purchase. But value is longer lasting. Take Black Friday door busters as an example. They’re often third-tier brands that are cheaper in price, lacking in features and not built to last.
Instead, save your skimping on things you’re only going to use once or those where store brands are just as good as name brand.
5. Look for Additional Savings
Instead of buying the cheaper option, just find ways to save on the quality products you know and love. For starters, you should compare prices online before heading into the store.
Doing this allows you to save money without skimping on quality.
6. Don’t Skimp If It’s “Over Your Head or Under Your Feet”
One rule of thumb holds that you should always be willing to spend more money on quality if the product in question goes over your head or under your feet — roofs and shoes are the classic examples.
But the same holds true for products you expect to use for years, whether that’s a mattress that will provide a better night’s sleep or a home in a good school area.
7. Budget for Your Happiness
It’s possible to cut too many corners where your happiness is concerned. So whatever it is you enjoy doing — going out with friends, traveling or buying shoes — budget for it.
Some people are so frugal they don’t get to live their lives. They are so frugal they never take a vacation or celebrate an anniversary. Don’t get so caught up in frugality so that you don’t get to enjoy it.
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