13 Instances When Being Cheap Doesn’t Pay Off

There are times when being cheap just isn’t smart. Here are 13 examples of when it doesn’t pay off to be cheap.

Mar 8, 2014 at 2:00PM


Photo: David LaMorte

We're all about shopping wisely and saving money. Comparison shopping for the best refrigerator within your budget on the market? We're so there. Researching online to find out what consumers say about the new digital camera you want to buy? Awesome. Monetizing your hobby? You must read our website a lot to be that smart.

Undertaking a DIY project to redo the plumbing in your bathroom? Well... not so fast. Are you equipped to handle that project?

There's a big difference between frugal and being cheap. Frugality means you're conscious about how you use and spend your hard-earned money.

Being cheap means you want to spend the least amount of money possible — no matter what. And that's not always the best approach to spending money. There are times when being cheap just isn't smart. Here are 13 examples of when it doesn't pay off to be cheap.

1. Buying in bulk
Going to Costco or Sam's Club to buy items in bulk is great in theory. You can save money by stocking up on some much-needed goods, such as toilet paper and vitamins.

But buying that big jug of spaghetti sauce or that loaf of bread won't pay off when you're throwing it away. Chances are that you'll still have to make a run to the regular grocery store, so don't buy anything perishable or that would be cheaper to buy elsewhere. Remember: just because you can buy in bulk does not meant it's a bargain!

2. Driving far away to save on gas
It seems that every so often we hear about how gas prices are rising. In our commuter culture, who wouldn't want to save on gas? But if you're driving out of the way to save a few bucks on gas, well, you've got to calculate if it's worth it.

First, figure out how many miles your vehicle gets per gallon. Then find out how far away the gas station is and the price of gas. Calculate how far you'd have to drive and how much it would cost to get there to fill your tank.

Would it be cheaper to go to a closer station with more expensive gas? If you're confused, websites like Gas Buddy might help you figure out if driving further away for gas is worth it.

3. Eating cheap food
Getting a cheap lunch or buying an overpriced bag of chips from the vending machine is OK every once in a while. But making the local fast-food restaurant or vending machine your constant go-to during lunch or dinner is unhealthy.

Saving money on cheap eats won't matter when your health takes a toll (and you get that health care bill) and you spend hours in the bathroom. That said, you don't necessarily have to stock up on organic produce either. Consider purchasing healthier snacks instead. Your waistline and wallet will thank you.

4. Going for cheap over quality clothing
Buying cheap clothes is OK if you're looking for something disposable or to buy in bulk, but when it comes to important garments, it pays to pay.

One quality jacket or blazer might be worth the investment if you're planning to wear it over time or as a statement piece. The alternative is buying something cheap that might break after a few washes or go out of style after a few seasons.

5. Cheap shoes and mattress
You'll spend most of your life in one of the two. Buy comfortable shoes, not just the cheap stuff. Cheap shoes are likely to break soon and don't have much heel support. That might cause irreparable damage to your feet and back.

As for your mattress, think of how many hours you spend sleeping. Spending a couple hundred bucks for a cheap mattress might feel good to your wallet, but could cost you in back problems later. You don't want to sleep on something that feels like concrete. So invest your money into something that will give you countless hours of comfort.

6. Using cheap services
Whether you're looking to hire a contractor or plumber, it's a good idea to shell out some bucks so that you get good service. Of course, that doesn't mean you should choose the most expensive service provider either.

Go with someone who has solid reviews and won't break the bank. In the long run, it will cost you more money if you hire someone cheap who does a shoddy job.

7. Vehicles and repair
There's no problem with buying a quality used car. But if you try to pinch pennies and buy a vehicle that's dirt cheap, you might end up paying more than expected when it comes time for repairs.

Make sure you know the type of car you're buying and ask questions about wear and tear. In the end, it might be worth spending a bit more for a car that's better quality and will cost less to repair.

8. Skipping health visits
Have you visited the doctor or dentist within the last 12 months? Having regular health checkups can sometimes be a pain, but it's worth it. Don't skip on these health visits, which can help identify problems before they worsen.

Regular health exams will help identify health issues early, when your chances for improving and getting treatment are better. You don't want to find out you've got a serious problem a few months down the line for something that could have been treated early on. That would be bad for your health -- and pocketbook.

9. Pet care
Just as you shouldn't be cheap when it comes to your own health care, you shouldn't pinch pennies when it comes to taking care of your pet. Buying cheap pet food might result in a visit to the veterinarian.

When it is time to visit the vet, you can save by looking into what the costs for a shot might be at your local animal shelter or the Humane Society. If your pet needs to undergo a procedure, try negotiating the price tag with your veterinarian or checking out local veterinary schools.

Some animal welfare organizations can also help with vet bills.

10. Anything for safety
Fire alarms, smoke detectors, child car seats -- these are not items that you should buy at the dollar store. When it comes to safety, it's OK to budget for a bit more than you normally would.

Besides, you'll feel so much safer knowing that you've bought something that will give you (or your loved ones) the best protection possible.

11. DIY
Do It Yourself projects can be a ton of fun -- and even earn you money if you're talented at, say, knitting scarves or creating skateboards. The great thing about DIY projects are that anyone can do them and there's a wide variety of stuff you can do or make.

But DIY can also go very, very wrong. If you're trying to save money by fixing cracks in your drywall or making a bookshelf -- and aren't equipped to handle the project or see it through -- it can spell disaster.

Don't DIY if you don't think you've got the goods. Hire someone else with the talent instead.

12. Buying daily deals
Everybody loves a good bargain and daily deal sites are so enticing, dangling their gift certificates in front of you. The problem with these sites is when you act impulsively and purchase too many of the deals.

Many of these sites count on urgency because the deals expire after just a few hour or days. If you're still waiting to use that certificate to see a comedy club show or find yourself forcing friends to go with you to a local restaurant before your Groupon discount expires -- it's time to rethink buying these daily deals.

13. Date
It never pays off to look like a cheapskate on a date. Ever. It's not a good look if you're trying to court someone. Nobody's asking you to drop hundreds of dollars on a meal, but don't start counting dimes and using discounts when you're trying to impress someone!

Even if the date is actually cheap, don't make it seem so! Be creative, think outside the box. Go to the beach or take a walk around the city. Make a home-cooked meal rather than go out to a restaurant. Just please, don't look cheap.

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This article originally appeared on MyBankTracker

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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