Welcome to My Personal Finance Journey! If you are new here, please read the "About" or "First-Time Visitor" pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.
You’ve probably heard the horror stories of the overly frugal:
- The people on Extreme Cheapskates who urinate into water bottles to save a few cents on their water bill from flushing too many times.
- The parents on Extreme Couponing who bring their young children with them to dumpster-dive for unused inserts.
- Your crazy Great-Aunt Margaret who rinses out Ziplock baggies so she can reuse them again and again and again.
Most of us realize that going to these extreme lengths borders on being clinically frugal. But, what if some of your own savings practices are actually doing you (and your budget) more harm than good?
Here are some areas where you should be careful that your attempts to save money aren’t actually backfiring on you:
The Bargain Hunter’s Wastefulness
I study weekly pharmacy circulars for deals and do a run each week to get the good stuff. But fortunately for me, I live near what we like to call “the trifecta”—a double traffic circle (yes, those do exist) that has a CVS, a Walgreens, and a Rite Aid all on its perimeter. So it takes me one spin around the circles and about 10-15 minutes of my time to hit up a full week’s worth of deals, all 5 minutes from my home.
If, on the other hand, I lived in a remote area where everything was very spread out—or if I decided that I was going to add Target, Kmart, and a handful of other stores to my weekly run—my cost-to-savings ratio would start to plummet. People who drive all around town grabbing one sale item from this store, one sale item from that wind up wasting so much time and gas money that they basically nullify the few dollars they’ve managed to save.
Similarly, if you’re spending hours each week cutting coupons and comparing them to store circulars, but you’re not netting 99.9% savings like those mavens on Extreme Couponing, you may want to consider employing your time on other ways to cut back or earn a little extra.
The Stingy Rebound Binge
Just like someone who deprives themselves of something cold-turkey (smoking, caffeine, any food that isn’t a vegetable), depriving yourself too much in terms of your budget isn’t healthy. We all need to have a few indulgences to keep us sane and happy, and the same goes for your expenses.
When you’re on a savings crusade, it can seem like a great idea to cut out all eating out expenses whatsoever, or to totally eliminate the movies you and your spouse used to see every weekend. But, you have to allow yourself a few exceptions, or else you’ll get so frustrated from deprivation you’ll wind up losing it one day and spending twice as much as you normally would.
So, whatever you’re cutting back on, do it with a few little “treats” built in. Don’t go out to see movies every weekend, but maybe allow yourself one night a month at the cheap theater using movies coupons, sneaking in your own candy and bottled drinks. (Inexpensive and with a little of the thrill of being a daredevil!) Cut back on big dining out expenses like full meals, but allow yourselves smaller treats like a trip out for ice cream or a relaxing afternoon at a coffee shop.
The Cheapskate’s Extra Cost
There are some things I am more than happy to pay a little more for—things like shoes, clothes (the perennial staples, not this season’s fashions), home repairs, and car repairs. This is because I’ve come to realize that sometimes paying more upfront will save you more down the line.
Those “2 for $9.99” pairs of sandals I bought from Payless were cute, and they were $9.99, but they barely lasted me the summer. One good trek around an amusement park for a day, and they were shredded. The slightly more expensive sandals I bought at DSW ($60 marked down to $30) have lasted me several summers and are still going strong.
The plumber who charged the going rate to fix our running toilet fixed our running toilet—then came back a week later when another part unrelatedly broke and told me he’d write it off as part of his original work, because he knew we were just starting off and it would suck to have to pay an additional $100 for one little part.
The plumber I found on one of those half-off deal sites fixed our kitchen sink leak, which took up 2 of the 3 hours we had purchased at half-price. He then told us he would owe us the additional hour any time we needed something else done. We’ve tried calling him 7 times since then (including setting up 2 appointments he never showed for) and are considering call the deal site to get our money back.
Long story short? Sometimes paying more now and will save you more later. Don’t cut back on price if it’s going to significantly cut back on quality or durability.
How about you all? When do you think frugality becomes too extreme?