Wasting Money When You Think You’re Saving

wasted moneyFirst impressions can be deceiving, especially when it comes to saving money. There are many instances when people believe they are saving money when in reality they are actually wasting it. This usually occurs because the person focuses on a specific aspect of what they are doing rather than looking at the situation with a wider view that encompasses all the information. Here are 5 common ways people waste money when they think they are saving:

Buying gas at the least expensive gas station: This only works if the gas station is on your regularly traveled path, not if you have to go out of your way.
Going to different stores to get sale items: In most instances, the cost of driving your car between stores will be more than the savings achieved.
Buying the cheapest: There is a difference between the cheapest and the best value.
Purchasing items on sale: This works if the items was something that you were going to buy anyway. It doesn’t if the items is something you would have never purchased if it wasn’t on sale.
Buying in bulk: This only works if you consume all the of bulk item before it goes bad and you don’t consume it quicker because you have it in bulk.

This is certainly not a comprehensive list. It is simply a few common mistakes people make to get you thinking about some of the assumptions you might be making. It’s worthwhile examining the ways you save money to make sure you really are. There is nothing worse that to do something for years thinking it was helping your finances when in reality it was hurting them.

This entry was posted in Personal Finance, Saving Money, Shopping. Bookmark the permalink.

8 Responses to Wasting Money When You Think You’re Saving

  1. Mike says:

    I think you also need to add that when you save money, you also need to invest it or do something with it in a positive way. Saving to pay for a holiday instead of putting it on a credit card is valiant, but you are still never going to get ahead.

  2. Pingback: Money Walks - Personal Finance » Carnival of Debt Reduction #81

  3. steve says:

    I liked your article reprinted on Yahoo finance, but I cannot believe you left off the list eating out at restaurants or getting take out. Expensive, poor tasting, bad for your health, inconvenient, and tiresome. And yet so many young (and old) adults do it every day. Home cooking is one tenth the price, you don’t have to drive or wait anywhere except the grocery store once a week if you’re organized. Home cooking is healthy, easy, and convenient. Etc etc.

  4. alan says:

    I read your article on driving extra miles to purchase gas is not the best thing to do. My thought is, if you boycot a station(s) and spend no money, then they have to close their doors or reduce their prices to draw customers back.

    In todays time, i think people will go with the cheaper prices to purchase things, so this boycot allows businesses to compete in a fairer market and not price gouge. It is true, or common sense, travelling further wastes more gas. I, would rather spend a couple extra dollars and help the small business man then give to the overly wealthy. Again, i appreciate your story but i think it is very much incorrect.

  5. ron says:

    I read your article on Yahoo today and I asked myself, does this guy work for “Pay Retail. COM”?, you are way off the mark

    1. Item gasoline

    In any major city, consumers are shortchanged by the 10% ethanol additive, by 3.5%-4%, because ethanol has 2/3 the heating value of gasoline. Do the math. Have you wondered why your MPG has gone down? A smart savvy buyer will drive to the county and fill up with 100% gasoline at about a 10% less cost/gallon, plus the 3.5-4% savings, but its all in the calculation of total cost to perform such a trip.

    Usually I fill up on I-95 between the major cities, where ethanol is not found and gasoline is typically cheaper

    2.Different Stores – Wrong

    If I can save $500-800 on a wide screen TV by going to Sams Club, Costco, compared to Circuit City I will. Besides there is an element of fun in saving money, what rock are you hiding under and spoiling everyone’s fun?

    3. Buying the cheapest

    You are partially right, buy the product with the best residual value, or if it is totally sunk cost, the best service life. If all else fails buy Brand, i.e. Toshiba, Sony, John Deere (but not sold-off brands names such as Westinghouse, Zenith, GE, etc)

    4. Sale Items-You have it totally wrong

    First of all you never buy anything unless its on-sale, period no if ands or buts, unless it absolutely necessary

    5.Buying in Bulk- you are partially right, but then dead wrong

    Buying in bulk for consumables is great, food tends to be a bad idea, but if its an absolute deal, you buy all you can in bulk, case in point, I once bought 25 Name Brand Power Tools 75% off and my son resold them on E-bay and paid his semester tuition

    Look for my new book next year, titled “The 3 Commandments” to savings

    1. Thou shall not let anyone work on thy house

    2. Thou shall not anyone work on thy car

    3. And thou shall never-ever pay full price

    Spend less time in the office, and come out to the real world of saving money with the real people

  6. gillian says:

    I want to let you know that stores like ‘Big Lots’ have sales from higher end stores that are phenomenal…I recently purchased curtains to the tune of $2.50 each as opposed to the original retail price at Bed Bath and Beyond of $17.99 each. ALSO, sales are inspirational to your saving money if you refuse to pay full boat prices. I totally disagree with your premise that sales are not effective tools with which to better allocate your budget. Exercising restraint is a constant issue, whether you are in a high end retailer or an outlet store.

    We also have a gas station with the lowest prices in town that also allows you between 3-5 cents more off a gallon on cash purchases. While you have to get out of your car to pay inside, the exercise won’t kill anyone. They also allow you to purchase a ‘cash card’ from them, and if you keep the amount low enough so that you are not contributing to their cash interest accumulation, the savings is impressive. This station is in my ‘circle’ of local movement – as are the low cost/sale savings stores that I utilize. Occasionally I will go to a ‘Sam’s’ wholesale store when I know I will be in that neighborhood. Sam’s has many bulk items that are not cost effective, and also carries many single items and market/food items that are priced at a much better point.

    You are correct regarding the bulk sales and the ‘going out of your normal driving range’ issues. Many people don’t realize what offers ARE in their normal driving range! Learning this will help the budget go further.

  7. Cindy says:

    I’m personally striving more and more to stay in my own neck of the woods. That is, I try to live more “local” than I used to, I’m getting older (52). Course, it helps if you’re smart enough in the first place to choose to live in a neighborhood/small town that has everything you need within walking or bus distance. Right now, I’m thinking when my car quits I won’t be getting another one (or at least won’t ever go into debt for another one). The walk to buy what you need to eat can’t be anything but good for you or better still, grow it yourself. Truly, when I bought this house 3 years ago, I wasn’t thinking quite this way but this kind of thinking evolved and it turns out I’ve chosen well and can probably go right into retirement and be perfectly happy never moving again, and the heck with trying to keep up with the Joneses.

  8. Canadian says:

    In response to: “Going to different stores to get sale items: In most instances, the cost of driving your car between stores will be more than the savings achieved.”

    Who says I’m going in a car? Maybe I am walking, cycling or using public transporation.

Leave a Reply

Your email address will not be published. Required fields are marked *