Frugal living has become the mantra for people since the rise of costs of living and Great recession started, although some of people have been wisely frugal for their whole lives. However, all money-saving tips are not equal. Sure, taking your lunch to work is a quick ways to save about Tshs. 5,000 to Tshs. 10,000 every weekday, but some other methods for saving your pennies could end up costing you more than you realize.
Skimping or Cheating on Insurance
Before you cancel your insurance policy, you need to think hard about the consequences. A damaged third part insured vehicle or a damaged home could cost a lot more than the money you save on your insurance premiums. Raising your deductible through a bank could be a better way to save, but make sure you can really pay that deductible without incurring costly debt and bank charges.
Buying Things Just Because They’re on Sale
Frugal shoppers live for sales and discount coupons, but don’t get so caught up in the sale that you end up buying things you don’t need. Stock up on items you really use when they’re on sale, but never buy something you wouldn’t purchase if it wasn’t on sale. You’ll end up with a houseful of unwanted items and then may not have the money available for something you really need. Ladies you know what I mean, we ran to buy discounted shoes and clothes that we do not even need.
Driving Extra for a Discount
Sometimes you can’t see the forest because of the trees. If you are focused so much on saving a few shillings per litre of gas, using a coupon at a distant store or finding a better price at a store 20 miles away defeats the purpose. Don’t forget to calculate how much you are spending on the extra gas needed to get there. You’re also adding miles to your possibly overworked car. A friend of mine drive all the way to town from Mikocheni to buy Us dollars for her DSTV bill because she claims DSTV exchange rates are bad, by a 5 shilling per dollar, you are driving to town to save TShs.400/- for a Usd 80 monthly DSTV bill. Not so clever!
Skipping Car Maintenance
Car maintenance is one expense many people like to skip, but the lack of routine maintenance can end up costing thousands of shillings in car repairs. You may even have to replace your damaged car.
Not Funding Your Retirement Account
If you’re scrimping and living from paycheck to paycheck, the idea of skimming money off that check for a far-off retirement can be daunting. We all know the Social Security fund saga going on in our country.
Think about this: if you put away a few shillings everymonth for years, those shillings will eventually turn into thousands. Plus, you may be reducing your tax burden by using pre-tax shillings for the social security contribution (Employee’s share of contribution). If you have an employer who’s matching your contributions you are throwing money away by not at least saving the maximum match amount.Employer might convice you to get more by avoiding NSSF he is saving while you are losing his part of contribution.
Buying Cheap Items
Cheap clothes, cheap shoes, cheap hardware items and cheap electronics are all readily available, but if you find yourself replacing them often you may end up spending more money than if you had bought a good quality item in the first place. Your better choice is to look for good quality items on sale. Chinese items are playing a big part into this category! selling good looking bad quality items at a lower price!
Living Cash Poor
If you try to save money by keeping only a small amount of cash in your wallet, you may end up wasting money on ATMs. If you go to your bank and avoid ATM fees, that’s fine, but many people end up spending around Tshs. 5000 every few days to pull out Tshs. 50,000 out of their accounts.
Buying the Wrong Groceries
While bulk grocery shopping can seem like a great bargain, if you end up throwing away tomatoes that’s gone bad, you’ve simply wasted money and food. Some people skip buying expensive fruits and vegetables, but they could pay for that later on because they’ll need extra vitamins and possibly have health issues.
The Bottom Line While saving money on small things can add up to big benefits, make sure the initial savings won’t result in unforeseen consequences in the long run.