Cutting down on budget is mandatory if you do not want to run out of money during emergency. Of course, you will have to skimp on your needs to stash away money. However, some people rigorously start saving money that more often than not cost them more money. Financial experts suggest that you should whittle down your discretionary expenses. This will not only help you have more money left but also help you pay off your debts on time.
Saving is a must even if you can easily access to guaranteed loans. As long as you have an emergency cushion, you can avoid taking out a loan of that amount. It can save your money in interest on top of the principal you owe. Even if you contribute 10% of your gross salary and cut back on unnecessary expenses, you can build your savings account. However, it does not mean that you follow an approach that backfires you. Here are savings habit that cost you an arm and a leg.
Avoiding dental checkups
Each visit to a dental clinic can cost you a few pounds that you can save by ignoring it. It may seem very interesting to see your savings account quickly adding up, evoking a sense of gratification. Eventually, you get carious teeth. It is better off paying a small amount on your dental care than having to pay a large amount of money on treatments. Do not skimp on your dental care as they can keep you from spending money in expensive treatments to maintain oral health
Doing your own taxes
Many people file their income tax returns without seeking help of professionals. You should do it as long as the nature of your income tax return is very basic. You will likely miss some deductions and not get return that you deserve. Professionals will charge a nominal fee but they are expert in their field and let you have refund. Such a nominal fee can pinch you in the beginning, but it will help you save a lot of money in the end.
Buying low-quality essential items
Inexpensive products may be your best choice. You can buy non-branded clothes for you and your children. This is fine, after all your savings account is building up. However, some items like tumble dryer or any other household item should have quality. If you do not take into account the quality of the product, you are likely to end up paying on repairs. Your money saving habit will not let you save in the long run. Be careful with your choice and the quality of the product. High-quality products may seem expensive, but they can save a lot of money in repairs.
Avoiding car maintenance
The maintenance of a car burns a big hole in your pocket. When you have a tight budget, you are likely to avoid it. As you need regular dental checkups, your car also needs regular maintenance. Car repair can cost a hefty amount undoubtedly. If you ignore it, it may break down anytime. Then, it will ask for more money. It is better that you have your car properly maintained. Preventive measures can help you save a lot of money down the road.
Buying food in bulk
The purchase of food in bulk is a better way to save money, according to many people who try to build emergency cushion as quickly as possible. However, it has some disadvantages. A purchase in bulk can help you save a lot of money, but at the end, you will find that you have wasted your money when things go rotten. Bulk purchase is healthy as long as you are certain that you will be able to consume all of the items before they go perished. Do not be caught up in cheaper deals. Analyse the quantity before buying anything.
Buying sale items
You will be more tempted to buy things that are on sale. Tags 20% off, 30% off trickle your fancy buying items even if you do not need them. You may think that you have saved a ton of money, but the fact is discounted price reflects the suggested retail price. They provide discounts on exaggerated price of things to make you believe that you have saved huge money. Beware of such kind of sales.
The bottom line
Saving money is a good habit. It helps you tide over when you find yourself in a tight corner. However, you need to ensure that you are not ruthlessly saving that costs you more money down the road. Cut down on your discretionary expenses and bad habits such as drinking, smoking and gambling. If you try to avoid spending money on necessary items, you will end up paying a lot in the end. Make sure that you are saving money with a sensible move.