‘Penny wise, pound foolish.’ We have all heard of this British saying that means trying to save small amounts and ending up spending larger ones. Sometime or the other, we have all been victims of this without quite realizing it.
Instead, we need to focus on the bigger picture instead of looking at short-term gains. Here are a few examples of how we end up doing silly things when we think we are saving money:
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1. Not buying travel insurance
We wish you well. However, unfortunately, if you come across a health hazard during your vacation or business trip, you are definitely going to regret not buying a travel insurance.
Ending up broke is bad. Ending up broke in a foreign land is the stuff of nightmares!
Apart from covering any medical emergency, your travel insurance also protects you against trip cancellations and stolen baggage. Saving money by not buying a travel insurance is like denying a life jacket onboard a ship. Trust us, it’s not worth taking a chance.
And you will be surprised by the wide coverage of these travel insurance plans. For example, The My VoyageGuard Travel Insurance by American Express covers up to S$2 million of overseas accidental dental and medical expenses and provides up to S$8,000 for loss of baggage and personal property. Make sure you study in detail the offerings by each company and then take a call on which travel insurance suits you the most.
2. Buying more to get free shipping while shopping online
We have all been there. Most of the retail websites have a minimum order value to waive off the delivery charges. And we know how much we love the word ‘free’! Whether it is while shopping for groceries or clothes, we all end up buying just one thing extra to avoid paying that nominal shipping expense.
What you need to understand is that maybe to save S$5, you are spending an extra S$15-S$20. This could be by buying an extra jar of mayonnaise or another pair of earrings that you don’t really need. Calculate wisely. Sometimes, paying that tiny delivery charge is more beneficial than not paying it.
3. Buying an annual gymnasium membership
Fitness topped your New Year resolutions’ list this year (yet again!)? The first thing that comes to mind when you think exercising is a gym. When you go to enquire about the rates, the monthly and quarterly rates sound criminal. So, you end up buying the annual membership, which sounds fairly priced. True story, eh?
However, what you do not realise (or you bury the realization deep inside) is that you might not end up at the gym for more than even a quarter in the entire year! And there you go — you think you saved money, but you actually ended up wasting it. In fact, you are putting in a huge amount at one go despite being unsure of whether you will be able to hit the gym even every alternate day.
It is best to try slowly building up a fitness routine by jogging at the park or swimming in the condo pool. Once you have weaved in a fitness schedule in your lifestyle, you can reconsider investing money into it.
4. Shopping for items you don’t need during a sale
Aah! Sales. Who doesn’t love them? We get ready to battle hordes of discount-hungry Singaporeans, to wait in long queues, and sometimes also to fight it out with a fellow shopper if there is a scarcity of items! Now, the truth is that buying items at a discount gives us this happy, almost euphoric sentiment, which obviously feels good. It also gives us this sense of achievement. However, in the quest of all this, we do, more often than not, end up buying something we don’t really like just because it is priced well.
Remember those shoes that you bought during the last sale at a steal-worthy price? Have you worn them more than twice? Probably not. Studies have shown that people buy items that they are not very fond of, which are not the perfect size or the favourite colour during sales just because they like the price.
So, the next time you are bargain hunting, make sure you don’t get wooed by those ‘prices slashed further’ signs. Also, remember a mall visit isn’t a ‘waste’ if you do not end up buying anything. Instead, get your happiness dose from these things.
5. Not spending on maintenance
If you hear your vacuum cleaner or car making weird noises every now and then but ignore them, you are committing a huge mistake. Not spending on maintenance of your devices, cars, or even your home may mean that you are saving a small amount right now but inviting a larger expense in the long term.
Preventive maintenance is extremely important. If you ignore it, chances are that the overall lifespan of the products will go down and you will have to replace them entirely. So, the next time you try dodging any servicing to save money, think again.
Are you guilty of doing any of these things? Tell us the silliest thing you have done to save money on our Facebook page.
Keep reading the BankBazaar blog for more insights into how we spend, and tips to get the most out of your credit cards.