This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Monday, June 16, 2008

Article: Pitfalls of Frugality

Posted By Paul

I liked this article on the Dollar Stretcher called:

The Pitfalls of Frugality

The author talks about how trying to save money can sometimes end up costing you more than you intended.

I thought the article was great. You rarely see articles talking about BAD ways to save money. I thought I'd call out his five main points and share my experience with them.

1. Don't buy poor-quality merchandise.

This is a great point, but often the difference between a great deal and a big mistake is something you only see in hindsight. For example, once I was trying to find an affordable DVD player. I purchased an off-brand that was on sale for $30, and while my friend Matt bought one that worked great for quite a while (maybe it even still works?), the one I got died after about 4 months. It's tough to find that line between being frugal and buying junk.

2. Don't buy something you're not going to use.

I've never really fallen into this trap. Usually if I end up buying something I definitely use it (though there have been times where I've bought tools that I figured I'd use a lot but that have only been needed once so far). This story reminds me of a friend who LOVED outdoor sports, or at least loved the EQUIPMENT. He had yards of climbing rope that had never been uncoiled, an ice-ax that had never touched ice, and all kinds of equipment that he always WANTED to use. He had bought nearly all of it on sale, but most of it never saw actual use.

3. Don't buy more than you're going to use.

This reminds me of some friends of mine who had a garage sale recently. They were getting rid of a lot of stuff that had never been used. Why? Well it was stuff that was purchased on sale with the assumption that it would be needed SOMEDAY, but that never ended up being needed. It's one thing to stock up on canned soup when it goes on sale, but if this garage sale was any indicator, buying two of something (coats, pairs of running shoes, camping tents, coolers) because they're on sale with the plan of using the second item when the first wears out will often result in a lot of stuff that you store for years and then get rid of.

4. Send in rebates carefully.

I've probably been burned by this one. I love rebates and make sure to carefully read the fine print and follow the instructions for submission very carefully. It's fun when I get the check months late since by then I've long forgotten that I ever submitted the rebate in the first place so it feels like found money. I wonder how often I've sent in the rebate and for whatever reason not received the rebate (I honestly don't know).

5. Watch your coupons.

For the first few months when after I graduated I lived in a city where I didn't know anyone, and money was tight so I would spend Sunday reading the paper and clipping coupons. The author of the article makes a good point about how using a coupon might not always save money. I think I stopped clipping coupons when I used a coupon to buy a box of 'Toaster Scrambles' (they were like Pop-Tarts except they were filled with egg/cheese/bacon, etc.). I thought they would be a great quick snack to take into work in the morning when I was running late, and then I tasted them. They spent months in the freezer before I finally found them encased in a block of ice during a freezer clean out.

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