5 Times When Being Too Frugal Can Cost You More Money

by Allison Martin · 7 comments

Over the years, I’ve learned it doesn’t always pay to cut corners, even if you’re trying to save money. Individuals all over the internet are sharing ways to be extreme couponers and save money at all costs.

And while I applaud your efforts and willingness to make sacrifices to keep more of your hard-earned cash in your pocket, it could end up costing you more in the long run. Here are five times when being thrifty can backfire and cost you more money.

1. Household Items and Toiletries

No, I’m not joking with this one. When money’s tight and you’re searching for every possible way to cut costs, household items and toiletries may be the first area to take a hit. But I know from experience that this isn’t always a good idea.

I’ve tried generic shampoos and conditioners, lotions, plastic bags and even toilet paper, during my collegiate years when funds were limited; what a huge mistake! The hair products and lotions left my mane and skin feeling a bit rougher than usual. The plastic bags could barely hold a sandwich without ripping, and as for the toilet paper, well I’ll let you figure that one out.

Long story short, I wasted money on products that were quickly tossed in the nearest trash bin. So don’t skimp on these types of purchases. Take care of your body and your health, so you don’t end up wasting money on cheap products.

2. High-Deductible Insurance Policies

You need an adequate amount of medical, dental, life or auto coverage, but what if you can’t afford the monthly or quarterly premiums? In most instances, we just increase the deductible.

I’ve been guilty of doing so, and things didn’t turn out pretty. The deductible on my health insurance was $1,000 but I only had $400 to my name. So I was forced to take out a pricey personal loan to cover the difference, in order to afford the treatment I needed. Not a smart move on my behalf.

Increasing the deductible of your insurance premiums may save you a bit of money each month, but what happens when you need to use the policy to pay for damages or a doctor’s appointment? Make sure you either have enough money set aside in a savings account to pay the higher deductible, or find another way to make ends meet.

3. Reservations for Lodging

If you’re looking for the cheapest deal on lodging for a weekend getaway, you probably head to one of the online deal sites that allow you to name your price and choose the cheapest option.

However, my luck ran out on this one. The first and last time I used a website to save on lodging, the hotel was a bit smelly and we were eaten alive by bed bugs. To make matters worse, the parking and resort fees were exorbitant once we arrived. I guess looks can really be deceiving and we got exactly what we paid for.

Of course it’s important to spend time finding the best deal, when booking reservations for lodging, but not to the point where you sacrifice comfort, or safety. Look for other areas of the budget you can cut, versus staying in a poor hotel.

4. Auto Maintenance

I recently covered ways to slash auto repair expenses and one of the suggestions is routine maintenance. But there was a time when I used to cut way too many corners and ignore the signs.

Long story short, my transmission failed and it ended up costing way more than it would have to keep up with the basic service requirements. Working with a reputable mechanic, and getting routine maintenance on your car now, will cost far less than doing a huge overhaul later — or having to undo work from a previous mechanic.

5. Coupons for Random Items

During my couponing phase, I saved a lot but I also spent a lot! Oftentimes, the deals were too good to resist, so I stocked up on a ton of items that weren’t originally on my shopping list. They ended up sitting on the shelf and eventually expired before we ever got to use them.

Don’t buy things just because you have a coupon. While you may be saving money on your purchases, ask yourself if you will be using them, or just forgetting about them.

I don’t regret any of these experiences, because they taught me valuable lessons, but I would strongly suggest to look at the entire picture and long-term effects of your frugal habits. Be mindful the next time you attempt to cut corners, and be intentional with your spending.

Do you have an experience with saving money up-front but then wasting it later? What’s another instance where being frugal may not pay off? 

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{ read the comments below or add one }

  • Jackie says:

    Good point on hotel bookings. What is considered a three star in Italy, surely wasn’t up to par with what my experience was of a three star US hotel. The 3 star hotel near Rome airport “just to sleep” before early AM Italy – US flight was scary!

  • Abigail says:

    Putting off purchases too long. When you *do* run out, you might not be able to find a sale.

    Also, this is more of an opportunity cost, but not just buying everything at once. When we got the house, we found curtains and rods we really liked. We bought enough for the main window, but I said we’d get the set for the back during the next sale. When I finally got around to it, both items were discontinued. My husband has a major tic about things matching, so we actually had to revamp the living room. It cost time, money and hassle. When I could have just spent the extra $50. Grrr…

  • Cyd Madsen says:

    I love this blog, read it often but this is my first comment. The areas you’re covering have either hit us hard as well, or they’ve been of benefit. Sometimes the old fashioned things are the best. Cheap shampoo isn’t always that bad if you’re also using the cheap conditioners they sell with it. As for potions, lotions, and creams, nothing beats good old fashioned petroleum jelly. My French aunt used nothing but that as her beauty treatment and looked fabulous into her 80s. My dermatologist also told me to never use anything but petroleum jelly on my lips.

    The current mess we’ve got with health insurance can be difficult. We did go with a high deductible plan, but that allows us to have an HSA that substantially reduces our taxable income. It’s nerve-wracking until that account builds up, but once it does you can keep rolling it over year after year and end up with a hefty savings and peace of mind for medical care.

    Right on with #4 and #5. Great advice. Great consistent advice on the blog. Thanks for helping educate us on these matters.

  • Old School says:

    Like the post…My wife and I tend to make our own shampoo and body wash. I thought she was crazy at first, but I actually ended up loving it. Plus now I know exactly what is in my soap so no more mystery chemicals end up on me:)

  • Agreed on the coupons–just because something is on sale doesn’t mean you need it! I feel like that’s a great fallacy.

    Cars could perhaps be added to the list. I’m not an advocate for buying a new car (I’m a buy used and with cash kind of gal), but, I’m a fan of buying a quality vehicle that won’t require frequent repairs and that’ll last for years. I currently drive an 18-yr-old Honda Odyssey minivan that’s in excellent condition. I hope our next car will last just as long, if not longer!

  • Melody says:

    I would add clothing to this list. Sometimes people will buy low quality clothing that just does not last. I think high quality clothes that are fashionable without being trendy is always the way to go. I’ve had the same black pair of Ralph Lauren pants since 2004. I still get compliments on them, and they are still in very good shape.

  • I’ve had great success with many generic products (or even eliminating products I thought I needed) from my beauty routine. Many are actually the same products, or at least have the same active ingredients with just generic packaging.

    I’ve also had plenty of successes booking hotels online. Often they turned out to be just like the reviews that we read online before booking.

    We’ve many times upped our deductible on our insurance premiums, but only because we had the cash available to self-insure.

    Auto maintenance has bitten us in the butt lately, so I’m with you on that one. Couponing did save us some money, but took up too much time to justify us keeping up with it.

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