In its purest form, “saving money” means you actually take money that you’ve received or not spent, and you set it toward one of your goals. But sometimes when we try to save money by spending less, it can lead to over-spending. Here are five situations where our best intentions often backfire. Make sure you’re not falling prey!
- BOGO: Buy one item, get the second half off – it’s so tempting, especially when it come to things like shoes and accessories! But chances are that you’ll end up talking yourself into something that you’re not crazy about just to take advantage of the deal. Plus the store is betting that you will pick a more expensive second item than you originally came to shop for, driving your bill even higher. Suddenly, a $40 purchase turns into $80, and you’re not even sure you like the bonus purchase. BOGO only works when you’re getting something free from buying something that you were planning to purchase anyway, like microwave popcorn or my favorite treat, ice cream.
- Cheaping out at the parking meter: I know how annoying it is to feed the meter just to pop in for a cup of coffee. But those meter maids are omnipresent, and they are trained to ignore your pleas once they’ve spotted your car at an expired meter, even if you’re standing there with your keys in hand. (Don’t ask me how I know this.) Saving a dollar is NOT worth the $35 or more parking ticket that you’ll end up with when your good parking karma runs out. Feed the meter every time and for enough time.
- Signing up for retail credit cards for the discount and then not paying them off: It’s one thing if you open the store credit card to get the discount and then pay the balance due in full. That’s smart. But only paying the minimum can negate any money saved due to the high interest rates charged. Whenever I use a store card for the discount, I either get back in line and pay off my balance right there (a lot of stores even accept debit cards for payment!) or I go home and do it online right away.
- Carrying the wrong cell phone plan. When was the last time you checked your phone plan to make sure you’re using the best one? Carriers are constantly changing their offerings, so double check that you’re still on the plan that’s best for your usage. The last time I checked, I was able to add a gig of data for $5 less than my old plan!
- Justifying impulse purchases because they’re on sale. Check your closet. How many items are you hanging onto because you haven’t worn them, but feel bad getting rid of them since you spent the money? I’d guess that most of those items were things you picked up and thought, “What the heck? It’s only $12!”
The next time you find yourself cruising the clearance racks, think twice. Is this actually something you need or want? How else could that money be used? Plug it into the Daily Savings calculator and see. Just $5 a day could add six figures to your long-term savings.
Finally, here’s a simple way to save a little extra money that my mom taught me: keep every five dollar bill that comes your way instead of spending it. It’s easier to stay disciplined with this if you have a plan for the savings. My mom uses hers for fun money when my parents travel. That way when she does find a good deal while cruising her favorite Ross store, it’s guilt-free!