21 Money-Saving “Hacks” That Cost You More In The Long Run

With the downturn in the economy and many struggling to make ends meet, it’s easy to fall for various money saving hacks that promise to reduce cost and help increase savings. However, it’s important to remember that not all the money-saving ‘hacks’ help in the long run. In fact, many so-called hacks actually cost more over time, even if they offer immediate savings. These increase in cost manifest through: hidden expenses, lower quality, or inefficiencies, many of which negate any initial savings. With this in mind, here are several popular ‘money-saving’ tips that might actually be doing more harm to your wallet than good.

Buying Cheap Instead of Quality

Opting for the lowest-priced items can seem like a smart way to save money, but it may end up costing you more in the long run. Cheaply-made products may break or wear out much faster than higher-quality alternatives, leading to more frequent replacements. Investing in well-made, durable goods can save money over time, even if the initial cost is higher.

Jason Higgs, Senior Deals Strategist at Bountii, says, “While economy products reduce your outlay, they’re often lower in quality, meaning the need for frequent repairs or replacements outweighs the initial savings. If you’re buying something that needs to last, like an electronic device or an appliance, it’s often a much smarter idea to make a bigger upfront investment in a quality product.”

Extreme Couponing

Higgs explains, “Although coupons claim to be a great money-saver, many of the items manufacturers make coupons for are their high-markup brands. It’s also common for coupons to have restrictions and limitations which can end up making them useless, and it’s a waste of money to buy things simply because you’ve found coupons for them.”

Remember, time is money; the hours you spend clipping coupons to save tiny amounts on your groceries could be better used. Additionally, while using coupons can undoubtedly lower the cost of shopping, extreme couponing – where you buy items in bulk simply because you have a coupon – can backfire. This approach can lead to overbuying and stockpiling products you may not need or use before expiring, wasting money and resources.

Skipping Routine Maintenance

Cutting costs by postponing routine maintenance on things like cars, appliances, or home systems can lead to significant repairs down the line. Regular upkeep helps prevent minor issues from becoming big, expensive problems, ultimately saving money in the long term.

Buying Items on Sale Just Because They’re Discounted

It’s tempting to purchase items just because they’re on sale, but if you’re buying things you wouldn’t have otherwise needed or wanted, you’re not saving money. This habit can lead to unnecessary spending and clutter in your home.

Signing Up for Store Credit Cards for a One-Time Discount

Retailers often offer a significant discount on purchases if you sign up for their store credit card. However, these cards typically come with high interest rates and can encourage more spending to “take advantage” of cardholder benefits, leading to potential debt that outweighs the initial savings.

Driving Extra Miles for Cheaper Gas

Saving a few cents per gallon by driving to a distant gas station may seem reasonable, but it can be counterproductive. The extra fuel you use getting there and back and the value of your time can negate any savings at the pump.

Purchasing Bulk Membership

Warehouse club memberships can offer great value on bulk items. Still, if you’re a small household or buying perishables in quantities you can’t realistically use, the membership fee and wasted product can mean you need to save money.

Home Improvement Projects for Resale Value

Some homeowners invest in expensive home renovations, believing that these projects will significantly increase their home’s resale value. However, not all home improvements offer an excellent return on investment. Research which renovations will likely increase your home’s value in your specific market, and be cautious of over-improving beyond the neighborhood standard.

Using a High-Interest Savings Account as an Emergency Fund

Placing your emergency fund in a high-interest savings account is a smart move to grow your money. However, suppose the account has fees or minimum balance requirements. In that case, you can’t meet them, or if it limits your access to funds when you need them most, any interest earned could be negated by fees or a lack of liquidity in emergencies. Choosing the correct type of account for your emergency fund is crucial to ensure it’s helping, not hurting, your financial security.

Skipping Health Insurance to Save Money

Opting out of health insurance to save on premiums can be risky. Unexpected medical emergencies or health issues can lead to excessive out-of-pocket costs that far exceed the price of insurance premiums. It’s often more cost-effective to have a basic health insurance plan to protect against unforeseen medical expenses.

Bulk “Bargains” & Buying in Bulk Without Price-Comparing

Buying items in bulk can mean the individual unit price of each item decreases drastically, but this is only the case in some stores. The main danger of bulk buying is that you’ll buy too much, and items will start to go off before you can eat them. If you’re throwing away food, you’re throwing away that ‘saving.’ 

Buying in bulk is often touted as a way to save, but this isn’t always true. Sometimes, the per-unit cost of bulk items is higher than buying smaller quantities, especially if there’s a sale. Always do the math to ensure you’re truly getting a better deal.

Automating Bill Payments To Avoid Late Fees

Setting up automatic payments can prevent late fees, but if you don’t regularly review your statements, you might miss increases in bills or subscriptions you no longer use. Regularly audit your automated payments to ensure you’re not paying for services you don’t need.

Saving Money by DIYing Complex Projects

It’s expensive to pay people to install or fix things in your home, so doing it yourself can seem like a great way to save money. However, DIY projects pose risks if you’re unfamiliar with the task or lack proper tools and safety measures. (Bountii)

In 2020, the Consumer Product Safety Commission said emergency room visits linked to DIY projects increased by 27%. This undoubtedly led to medical bills and lost wages for many. If you’re not sure what you’re doing, it often costs more to fix DIY errors than to pay a professional. 

Chasing Credit Card Rewards Without Paying Balances in Full

Credit card rewards and cash-back offers can be enticing, but if you’re carrying a balance and accruing interest, any rewards earned are quickly negated by interest payments. To truly benefit from credit card rewards, pay off your balance in full each month.

Meal Subscription Boxes Instead of Grocery Shopping

Meal subscription boxes are convenient and can introduce you to new recipes, but they are often more expensive than buying the ingredients yourself. If saving money is the goal, planning meals and grocery shopping can be more cost-effective, mainly if you focus on sales and seasonal produce.

Investing in Trendy Financial Products Without Research

The allure of the latest investment trends, like specific cryptocurrencies or high-yield investment programs, can be strong, but diving in without proper research can lead to significant losses. Always do thorough due diligence or consult with a financial advisor before investing in any financial product, especially those that seem too good to be true.

Refinancing Your Mortgage for Short-Term Savings

Refinancing a mortgage can offer immediate monthly savings, but it also resets the clock on your loan term and can result in more interest paid over the life of the loan. Additionally, closing costs and fees associated with refinancing can add up. It’s important to calculate the long-term financial impact before deciding to refinance.

Buying a Cheaper, Less Fuel-Efficient Car

The upfront savings on a less expensive car can be appealing, but if the vehicle has poor fuel efficiency, you may spend more on gas in the long run. Considering the total cost of ownership, including fuel consumption, is crucial when purchasing a vehicle.

Using Layaway Plans for Purchases

Layaway plans allow you to pay for items over time without using credit but can come with service fees and cancellation penalties. Saving up for the item and paying in full can be a smarter financial move, avoiding any additional fees associated with layaway.

Skipping Professional Inspections When Buying a Home or Car

Foregoing professional inspections to save money when purchasing a home or car can lead to costly repairs down the line. A thorough inspection can reveal hidden problems you can address before they become more expensive or negotiate into the purchase price.

Cutting Out The Small Costs

Higgs says, ‘Common advice I see everywhere includes things like ‘cut back on your daily latte’ or ‘cut down on the number of subscriptions you’re paying for.’ While these are good ideas, how much will they save you in the long run? Learning how to plan your financial future properly – whether through savings, pensions, or investing – is a much better use of your time than denying yourself small treats.’

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Source: Bountii