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Living Frugal – 3 Myths That Will Cost You More Money

Bulk buying, shopping around, or doing-it-yourself does not always save you money. Getting a discount on a box of apples to make a big apple cake is smart - buying a box of cheap, wilted vegies and throwing most of it to the compost bin is not.

Before you start shopping around, buying great bargains on credit, or getting wallpaper to do it yourself, read on.

Bulk Buying

There are a few different ways of buying in bulk, including:

ñ online and offline warehouses, where you pay less per unit when you buy a box or a dozen; a six-pack is a good example, I guess...

ñ bulk shops, where you can buy flour, beans, or nuts from bulk bins

ñ boxes of fruit and vegetable delivered by local farmers or shops

ñ special Buy One Get One Free offers

You can save money buying in bulk, but there are a few things to keep in mind.

Often the more quantity of a product you buy the more money you save, and you may trick yourself into buying more than you need. This is especially true with heavily discounted “close to use-by date” food. Who would not buy yummy blue cheese for $1.50 if the regular price is $7.00? But buying all twenty seven little wedges is a big mistake.

Shopping Around

Hey, but everyone says that even millionaires look for bargains! Apparently, they expect discounts and ask for them. No matter how much money they have, they do not pay a high price if they can get the same thing for less.

There is a big difference though between getting a good deal and haggling for hours to get a few dollars off. If, additionally, there is a chance that you will end up on the “We Hate These Customers” list, it is really not worth it.

If you ride you bike for 40 minutes to buy two tins of sardines because they are 20 cents off, you better rethink your saving strategies. Invest the time spent shopping around in learning a new skill, a part-time job, or maybe start making greeting cards, selling them on Etsy, and making some money that way.

Spending ten dollars on petrol driving from one shopping centre to another to save $3 on purchases makes no sense either. When you calculate all the costs, including parking, you will see that sometimes it is more economical to pay a little bit more.

Some shops advertise huge discounts on just a few products to drag in customers. The customers often drive for half an hour just to realise they missed out on that “very special limited offer” anyway, or they will have to spend another hour waiting at the cash register to pay for their new treasure.

The internet can also be a tremendous help in this regard, with literally hundreds of websites out there offering price comparisons on all kinds of products and services. Did you know you could even compare health insurance policies online with the click of a button?

Buying on credit just because you found a great deal can set you back, so be careful. Getting that beautiful slimline TV set may be very tempting, especially if you can use your credit card now and pay it off, making only minimum repayments, over a long time. Do your maths, and you may find that in the long run not only you did not get any discount, but that wonderful new TV cost you more than if you paid in cash.

There are free tools online that help calculate how to save money by paying your credit card off faster.

Do-It-Yourself

The man who decided to save his money on changing a toilet seat, and ended up breaking the toilet, flooding two floors, and spending $27,000 to fix the damage would surely agree that DIY can be tricky.

If you know what you are doing, you can save a lot of money on labour, and refurbish your whole house, but if you are not a professional, do your homework and see what is involved before you even buy your paint and brushes.

Do not learn cons of DIY hard way, it can be painful – literally.

ñ if you do not have skills or experience to do a decent job, you may end up paying for materials, wasting your time, getting frustrated with the results and calling a professional to fix it anyway

ñ it can be dangerous; thousands of DIY aficionados arrive to emergency departments after falling of a roof, cutting their fingers off, or forgetting to turn the power off before putting a new plug or rewiring the house;

ñ it may be illegal – it is important that you check out what you are allowed to do before you start installing your new gas stove, or rebuild your bathroom; for example, to do any plumbing or drainage work in Queensland you need a plumbers licence or a drainers licence, and your plans have to be approved.

We often buy or make other money related decisions on emotion, and only later justify them with logic. Before you follow someone's advice on how to save money, do your research and check the pros and cons. You may find that this brilliant, proven strategy is just that – yet another myth.