Finance Globe

U.S. financial and economic topics from several finance writers.
4 minutes reading time (712 words)

Money Saving Fiction

It always feels good to save a buck or two, but some financial habits can end up costing more in the long run. Here’s a look at some habits commonly though of as budget-conscious that can sabotage your money-saving strategy:

Clipping coupons
This takes time and effort, adds to paper clutter, and can easily cause you to spend more money than you normally would have without the coupon. The only brands that even offer coupons are the highly-advertised national name brands. These already cost more than the local competition because of advertisements and marketing; for example, the coupons they have to print. If you won’t buy anything but recognized name brands, then clipping coupons may pay off.

But if you truly want to save money on the grocery bill, then try out the local store brands - they often cost less than the national brands even with a coupon due to lower marketing costs and plainer packaging. Usually, the quality of the product is just as good and sometimes even better than the famous brand.

Hitting the sales
Your favorite store sends you a mailer or email that says it’s having a sale - complete with a coupon for an additional percentage off of your purchase. Well don’t fall for it, unless you just have some extra money burning a hole in your pocket or you already need something from that merchant anyways. But going to their store just because they’re having a sale can give you an excuse to buy something you probably would have never missed.

And using shopping to alleviate boredom? Another habit to avoid if you’re trying to save money. Vendors pay big bucks for marketing because they know it works and they know how to make us feel we really, really need or want something. Better to just avoid the temptation to begin with.

Buying bulk or mass quantities if you don’t need it
A really smart shopper routinely checks the price-per-unit before they buy consumables. And if it’s something you’ll blow through quickly, then it only makes sense to buy large quantities to save money.

But beware of getting caught in that trap for things that you may “someday” use - going to the membership club warehouse-type of store can lure us into buying big boxes of things that will either go stale or collect dust before we get to them, and equates to wasting money.

Choosing a credit card for the wrong reason
The two main costs associated with most credit cards is the annual fee and the interest rate - the annual percentage rate (APR). It’s important to choose a card with the feature that’s most important to the way you pay down your balance. If you always or usually pay your balance in full before the end of the grace period, then a super-low APR rate is really not going to matter much at all for you; look into using a credit card with no annual fee or generous rewards.

But if you normally carry a balance, then the APR should be the most important consideration. It can be a big mistake to choose a card with no annual fee if the interest rate is higher than you could get elsewhere; you may be better off by paying an annual fee to save a few interest rate points, and a lot of dollars.

Choosing a home strictly by price
Location, as anyone in the real estate industry will tell you, is the most important consideration after affordability, whether you buy or rent. If you don’t choose a place in an area that is convenient to work, school, family and friends, and leisure activities, you may end up paying more in travel expenses or entertainment costs than you save on rent or mortgage payments.

Figure out any additional expenses - or expenses you can save on - with the home you’re considering before you take the plunge. For example, it may be worth paying a little more for a property that backs to lovely fitness trails so you can cancel the gym membership. Or if you’re in the center of town with everything you need within walking distance, you may be able to give up owning a car and the costs associated with it.
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Tuesday, 23 April 2024

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