Costly Money Habits

According to the article found at http://www.marketwatch.com/story/11-money-saving-habits-that-can-cost-you-2014-05-29, there are several money habits that are actually costing you money. Here are a few of those habits:

#1: Purchasing an item just because it is on sale – The first question to ask yourself is would I purchase the item if it wasn’t on sale? If the answer is no, then you probably don’t need the item. Just because it is on sale does not make it a good deal. If you find yourself tempted by deals that you receive via email, unsubscribe from that particular email to help avoid the temptation.

#2: Applying for a store credit card because you receive a discount – Beware of this tactic as many stores require their employees to sign customers up for a credit card. It might be tempting to get 15% off that first purchase, but it will cost you more as you find it easier to buy items and put them on the credit card. These cards often charge high interest rates and other fees.

#3:   Extended Warranty – While it may seem like a good idea at the time, the store offering the discount generally keeps 50% of the warranty cost. There are usually several restrictions as to what the warranty will cover.

#4: Driving farther just to use a coupon – Driving an extra 10 miles just to use a 25 cent coupon just doesn’t add up, yet some consumers think it is saving money. What they don’t take into consideration is that it will cost them more in gas to drive out of the way than it will save them.

#5: Making purchases in bulk – While I have bought items in bulk before, I generally don’t end up saving money. With a small family, purchasing in bulk may not make the most sense especially for food items.   Items may expire before you could use them all so you might end up throwing them away. Also, just because it is sold in bulk does not make it less expensive. Take the time to calculate the actual cost per ounce and compare it to other items. You might find out it isn’t saving money by buying in bulk.

#6: Purchasing the cheapest item – Sometimes it makes more sense to spend more on an item of higher quality that will last longer than to buy the cheaper version. I have bought different appliances over the years and have found that the least expensive items don’t seem to last as long or have the same quality as the higher priced items.

#7: Spending more on credit cards for the reward points – That 3% cash back seems very tempting but you might be spending more than you normally would have spent just to earn 3%. Your rewards points may expire before you earn enough to use them so the additional money spent may not have returned anything at all.

#8: Making lots of purchases on Black Friday – This tip is quite timely considering this post was written 3 days before Black Friday. While you can find good discounts on Black Friday, there may be better times to buy certain items. I generally try to purchase clothing off-season when the items are on sale.   Take into consideration the fact that some items are only offered in limited quantities so the store may be sold out before you can make the purchase.  You might be tempted to buy a similar item that is not on sale if the item you wanted is sold out.

Make sure your money habits are actually saving money as opposed to costing money. With just a bit of research and common sense you will learn to recognize good money saving habits and to avoid bad money habits.

 

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