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Have you ever had such tunnel vision about saving money that it backfired and cost you more? I’m usually looking to cut costs where I can, but I wouldn’t say I’m an extreme cheapskate. We don’t serve roadkill to guests, and we always keep toilet paper in the house. But when you start confusing frugal with cheap, bad things happen.
This weekend, I learned a lesson that I’ll remember. Sometimes in our quest to be frugal, we can cross over that line to cheapness. When we see only dollars instead of value, is when our quality of life starts to suffer.
We’d planned a trip to Savannah, Georgia to attend my niece’s wedding. Our flight was scheduled for the day before the wedding, so we’d leave 30 degree New Jersey and have a day to stroll around all the historic squares in 70 degree Savannah.
I approached the airport with over an hour to spare, and like always, headed to the long-term (cheap) parking lot. The one two miles away that requires a shuttle to the terminal. Well, parking and shuttling took 25 minutes, and the security line took another 30. We missed our flight by 6 minutes.
The employee at the gate was nice enough to put us on the next flight at no charge- 12 hours later. So instead of arriving at 11am, we arrived at 11pm. My effort to save $30 on parking cost me what would have been some great memories with my kids in a new city.
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We still had a few hours the next morning to walk through the beautiful cobblestone squares (where you can carry around your margarita or your beer). But the lesson stuck with me. Sometimes our tunnel vision to save a few bucks costs us in lost opportunities and lost time.
It made me think of other ways our penny pinching habits may be doing us more harm than good.
Here’s a few that came to mind. Let me know if you agree, then add your own down below.
You Spend More Time “Saving” Than it’s Worth.
I have a retired neighbor who literally makes a full-time job out of working on his lawn. From April until November, he works 8 hours a day, manicuring every blade of grass into what looks like a military haircut.
My other neighbor commutes two hours a day to his full-time job, but sets his sprinklers on automatic and works on his lawn for about an hour on the weekend. He spends plenty of time with his wife, and they entertain a lot. And his yard looks almost as good as the retired guy.
The law of diminishing returns means retired guy’s lawn will only look so good, and then his efforts beyond that aren’t really making a difference.
And it’s the same when we spend hours and hours trying to “save”. There’s always another grocery flyer in our mailbox, or a discount on the store’s website, or on their own app, or manufacturer’s coupons, or generic savings apps.
If you value your time at $25/hour for example, and spend two to three hours a week coupon hunting, you’ll need an awful lot of coupons to justify your time.
So I say, rather than spending hours searching for coupons, have a simple plan. Spend an hour setting up some meals for your own meal plan. Then each week, spend 15 minutes to pick your meals, see what ingredients you’ll need, and use one flyer or one app to grab some coupons.
You’ll still save on unnecessary take-out orders, extra trips to the store, and get discounts. But you’ll also have more time to yourself. Time for family, for personal things, or time to pursue other opportunities.
Related topic – 12 Keys to Drastically Reduce Your Grocery Budget
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Being too Cheap to Pay an Expert
Home Depot’s motto is, “You can do it. We can help.” I do love browsing around Home Depot getting ideas and seeing all the new products. And DIY shows are on every minute of the day showing me what I could have. Thanks, HGTV.
But the fact is, sometimes it’s better to pay a pro. It’s one thing to paint your own living room or replace a ceiling fan. But trying to stumble through something that an expert has gone to school for, is asking for trouble.
Things like electrical work, computer tasks that are beyond your skill level, or skilled auto repairs are much better left to an expert. It’s tough to fork over the money, but sometimes outsourcing can mean a better ROI when the job is done correctly, and in a fraction of the time. Or done at all.
Failing to Invest in Yourself
Confusing frugal with cheap can hurt us for decades when it comes to personal development. We’ve probably all been frustrated at work sometimes. Where we’d like to move to the next level, but there’s one more certification or one more qualification we don’t have.
Or there’s a job we’d like to apply for that requires a Master’s degree. It’d require two more years of school, and more tuition.
Maybe you’ve started your own blog, but want to learn more about SEO or HTML.
Shutting yourself off from opportunities to grow because you won’t spend the money isn’t being frugal – it’s being cheap and shortsighted.
Instead of thinking of all the reasons you can’t afford it, try thinking of ways you can. That extra training that may cost a few hundred, or even a few thousand dollars could pay off exponentially.
Can you cut back on something else? How about dedicating a few nights a week to studying? Can you sell something to afford a course? Or can you do a side hustle temporarily to raise some money?
Like Norman Mailer wrote, “Every moment of one’s existence, one is growing into more or retreating into less.”
When BOGO Causes FOMO
Buy one get one deals are great if you’re buying food that can be frozen. But if you’ve been in a mall recently, you’ve probably noticed almost everything is buy one get one discounted.
If you only need one shirt or one dress, then buying two, even if the second one is discounted, isn’t a bargain if it’s blowing your budget.
Similarly, a sale where you save 20% but only if you spend $100, isn’t really a bargain if you can buy the same thing cheaper somewhere else. Why change your focus from what you need, to how can I spend $100?
Confusing Frugal with Cheap at Work
Most employer sponsored savings plans kick in a percentage to match your own contribution. For example, If they’ll give you 50 cents for every dollar invested up to 6% of your salary, you’re immediately getting a 50% return on your money – before it’s even invested.
Failing to sign up in order to save the deduction means you’re leaving hundreds of dollars on the table in the short run. And thousands over the next several years.
Here’s an example:
- A 25 year old making 40k per year starts saving 6% of his/her salary until they’re 65.
- Assuming you earn 7% interest, that extra 3% employer contribution means you’d earn an extra $248,552!
And that’s if you never increased your contribution.
So whatever they’re kicking in, do yourself a favor and take them up on it!
Here’s a few more times when focusing only on dollar signs has lured me into making short-sighted decisions:
- Accepting a store’s credit card offer to save 30% on my purchase, then paying the minimum on my balance – and interest charges that negate that 30%.
- Contributing to a 401k, but not building an emergency fund.
- Procrastinating over car maintenance, then paying for it later.
- Avoiding the dentist.
- Not buying a decent phone case, then paying for a repair.
Being frugal is about getting intentional with spending, and getting every bit of value out of your dollar. It’s figuring out what’s right for you and your situation. If you like your Starbuck’s coffee but you’ve cut out cable TV and plan your meals each week, great. If it adds value, safety, or opportunity and fits in my budget, sign me up.
Being cheap is focusing so much on money that you overlook the quality, the time you spend, or the return on your investment. It means buying things twice. Or redoing things you scrimped on. Or suffering each day with your low-quality choices. Or missing flights :'(
How about you? Have you made some choices to save money that have caused you grief down the road?