When most people hear the word frugal, images of dirt cheap prices and big sales and bargains come to mind. However, frugality is more than just spending as little as you can when making a purchase or paying for a service. The video below explains how to make sure your frugal spending habits are actually saving you money.
The main thing to realize is that although on the surface it may seem like you will save money on this deal, in the long run your “frugality” may cost you. Here are the top five ways according to Yahoo! that people are wrongly convinced they are saving money.
1. Price trumps all. People are always looking for the lowest prices for clothes, electronics and other commercial products. However, keep in mind that the cost of product is really determined by the cost per use – a $5 t-shirt that you will only wear once is in actuality more expensive than one for $20 which you will wear all the time.
2. Discount stores are always cheaper than outlets. Although the price tag may actually be lower, the numbers are not everything as mentioned above. Outlet stores often carry different merchandise (with different levels of quality) than factory stores, so make sure that even though the two items are the same brand, they are actually the same item. Otherwise, you are comparing apples and oranges.
3. It is cheaper to fix it yourself. This is a common way people convince themselves that they are saving money, but performing a complex job with little training or know-how can actually cost even more money in damages or long-term complications. Do not sacrifice quality when it comes to important car and home improvements.
4. Dollar menus are the best value. The food might cost you a dollar today, but health reports link heavy consumption of this food to cancer, heart attacks and all sorts of other health complications. There is a lot of saturated fat, sodium and cholesterol in these foods, so, once again, make sure you are (generally) consuming quality items.
5. Best to buy in bulk. It goes without saying that if you are not going to eat 42 cans of beans, you are not saving any money by buying them at 88 cents per can versus two dollars. Consider judiciously what is worth buying in bulk, especially products that do not go bad and will always be in demand like toilet paper.
Also read: 8 Purchases You Shouldn’t Skimp On