By Pat Dunnigan
“Most people recognize they shouldn’t try electrical repairs, but tasks like hanging wallpaper and tree removal are better left to pros, too.”
As a former car salesman and Chief Strategy Officer at Reviver, Allan Cooper knew the risks of buying a used car without fully researching its service history. But at $10,000, the three-year-old station wagon seemed like a good deal for what he needed—something reliable enough to get him up and down the California coast with room for his paddle boards.
More than $7,000 in repairs later—including replacing four cracked rims—he’d relearned an important lesson: Sometimes thriftiness can cost you.
When you’re looking to stretch a budget, it’s tempting to jump on every opportunity to scale back—one AAA analysis found that 35 percent of Americans have “skipped or delayed” recommended maintenance services. That, Cooper says, can be a very expensive way to save money in the short term.
Of course, car buying and maintenance aren’t the only times in which being too thrifty can cost you down the road. Here are some others.
1. Cancelling the gym membership you actually use
Whether you’re forking over monthly gym fees or per-class fees at a boutique studio, you might start wondering whether your fitness budget is just keeping your wallet slim. But think twice before calling it quits, says Vasilios Kosteas, associate professor and chair of economics at Cleveland State University.
His research found that regular exercise is associated with a 6 to 10 percent increase in wages. (That’s backed by Certified Financial Planner and author Tom Corley’s research on “rich habits.”) Coupled with benefits like stress relief, increased energy and a reduced risk of health problems, you’d have to spend a whole lot before the costs outweighed the benefits.
Sure, you could always save by working out at home or researching free classes in your city. But if that’s not your style, you’re better off finding other places to scale back. (Hint: Start with low-hanging fruit like your cable or phone bill.)
2. DIY home improvement
Anyone who’s attempted a Pinterest-inspired project knows: It’s not so simple to achieve those pretty “after” shot results. “People look up how-to videos, and it all looks very straightforward,” says Brad Hunter of HomeAdvisor, but often it’s much more complicated in practice. Make a mistake, and you may end up paying more to fix it than it’d have cost to outsource it in the first place.
Hunter’s advice? Paint, grout and change out a showerhead or faucet. Maybe even tackle tile or toilet replacements. And definitely learn how to fix a running toilet. Beyond that, consider calling in the pros. Most people recognize they shouldn’t try electrical repairs, but Hunter says tasks like hanging wallpaper and tree removal are better left to pros, too.
3. Skipping regular dental care
American Dental Association surveys show cost is the biggest obstacle standing between people and regular dental care. When you don’t have dental insurance, it can be tempting to put off a trip to the dentist.
But this is another time that thriftiness can bite back—both in untreated tooth decay and depleted confidence. Nearly a third of young adults surveyed by the ADA’s Health Policy Institute reported that the appearance of their mouth and teeth affected their ability to interview for a job.
4. Bulk-buying the wrong items
As tempting as it is to want to load up on pantry items and produce, some things, sadly, don’t have a long-enough shelf life to justify big-box discounts. While you may think your freezer will help you lock in the savings, researchers at Johns Hopkins Bloomberg School of Public Health found most of us underestimate the amount of food we will end up throwing away.
Sticking to the boring stuff—like TP, bottled water, batteries and vitamins—is better for the bottom line.
5. Succumbing to the store credit card come-on
There’s nothing like preparing to hand over your credit card to a cashier to make a last-minute savings offer sound like a gift. But when the strings come attached to a store credit card, it’s probably better to resist. A 2016 study by CreditCards.com showed that the average annual interest rate for retailer credit cards was a whopping 25 percent, compared to about 16 percent for general purpose credit cards.
“The math is pretty simple: It doesn’t make sense to pay 25 percent to save 15,” says Matt Schulz, senior industry analyst at CreditCards.com. Of course, if you pay your balance in full every month, the savings is yours—but “fewer than half of people do,” says Schulz. “So generally speaking, the best answer is no.”
Originally published at grow.acorns.com
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