Penny-pinching is a good way to keep your budget on track and save more money, but when it comes to certain things, being cheap might actually work against you. Sticking with a frugal lifestyle could also mean not skimping on some of the following, which could actually cost you more money in the end:
Paying for insurance means another bill to worry about, so if it’s not required, you don’t have it. Or maybe you do have some insurance, but it’s not sufficient coverage that would actually help much, should the day come that you need to make a claim. From homeowners insurance to health insurance, reevaluate the types of coverage you’re currently doing without, and think about what you could actually benefit from having. If you don’t have health insurance and you get sick or hurt, out-of-pocket medical expenses can cost you a fortune. If something catastrophic happens to your home and it’s not insured or insured adequately, it can be absolutely devastating and cost you far more than a good homeowners insurance policy would have cost you.
There are tons of cheap products that can truly stand the test of time, but in some situations, you may be better off just investing in higher quality merchandise that is more durable. If it’s something that you’ll use often, consider how well a more expensive product might last (especially if it comes with a warranty), when compared to a cheaper alternative that might need to be quickly replaced. For example, if you live in an area that’s prone to rainy and windy weather, you may want to invest in a sturdier umbrella. Very cheap umbrellas can be flimsy and need to be replaced on a regular basis, and in the end, you might lose count as to how many umbrellas you’ve gone through. Who knows how much money you might spend in the long run by replacing one cheap product with another, when you could have just purchased a high quality item initially.
If you own a home with older appliances, or you’re in the process of shopping for appliances and want to go the cheap route, you might want to reconsider. Although the cheapest options available will save you the most upfront, they’ll use up more energy and cause your monthly utility bills to be higher. Instead, consider spending a little extra to get appliances that are energy efficient. You might even receive an immediate credit from your utility company just by purchasing eligible appliances, and then you’ll notice the savings in your monthly electric bills. The savings can be significant in the long run, especially if you’re in the same home for many years. Even swapping out older light bulbs for LED light bulbs can make a big difference!
In an effort to keep your food costs at an absolute minimum, you might be more inclined to choose the cheapest options whenever you’re grocery shopping. But usually, it’s the unhealthier food options that tend to be the cheapest. A recent study that was published in the British Medical Journal, however, has revealed that healthy eating doesn’t cost much more than many people think it does. The study showed that healthy food choices cost the average person an extra $1.50 per day, or just under $550 per year. If you avoid healthy food because of the higher price tag, it’s important to think long-term. If your diet is based primarily on unhealthy food, this can take a toll on your health over the years, which can potentially lead to more doctor visits and costly health problems. Not only can certain health conditions that result from poor diet choices be completely life changing, but the extra medical expenses can far exceed $550 annually.
Life is short, and at the end of the day, we look back on the happy times and good memories. Being frugal and spending sensibly is great to do, but you don’t want to be on such a strict budget that you never allow yourself to have a little bit of fun now and then and create new memories. While it doesn’t mean overspending, maxing out credit cards, or using the money you need for bills, it’s important to splurge occasionally and just enjoy life. Whether it means taking that vacation you’ve always dreamt of, or even something small, like a night out on the town with the whole family, don’t let frugality keep you from making wonderful memories.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.