“You need to save money to invest!”
“You need to save money to own a house!”
“You need to save money to have a child!”
“You need to save money for retirement!”
Yes, saving money is the first thing we are taught since we’re  young when it comes to managing our finance. Saving money can be done in so many ways that many of us may not realized that some of the ways we use to cut cost are actually harmful to our financial well-being. Let’s explore all the money-saving strategies that may backfire you, so that you can avoid them!

1. Eating “cheap” food

As working adults, we tend to eat out more often and food are definitely not cheap nowadays. Therefore, in order to save money, many will opt for “mamak”, fast food or bread to fill our stomach for the day. However, this is only risking our health in the long run and we will end up spending more money to fix it! Why not spend some time to cook your own healthy meal from home and bring to work? That way, you can save some money and maintain a healthy body.

 

2. Skipping meals

Some people will go the extra mile to skip meals occasionally to save money! Not only your health will be affected, this type of savings will be offset by less productivity and efficiency at work. Why risk your opportunity to get a promotion and pay raise? You can definitely cut down on carbs and eating less for dinner, but never ever skip meals!

 

3. Saving to spend

The feeling of saving money and watching our savings account grow is surely satisfying. However, if you’re only saving up with the intention of spending it on things that don’t retain value, then it defeats the whole purpose. You will end up spending more instead. Examples are possessions like car, apparels, mobile phone, games and luxurious food.

 

4. Buying items on sale that you don’t need

Promotions and sales are often a marketing gimmick to attract more sales. Most of us consumers will perceive buying things on sale is a good way to save money, but this only works if you buy what you need and will actually use them for a period of time. However, if you buy only because it is on sales, you are just wasting money!

 

5. Ignoring home and car maintenance

We often try to defer home and car maintenance to save some extra money. Keeping up with maintenance will extend its life and run more efficiently.  For example, your car will be able to run on better fuel efficiency or your home air con will run on better electricity efficiency, hence helping you to save more money on the long run.  In addition, it may cost you an even more when extensive repairs are needed down the road.

 

6. Buying minimal car and life insurance

Yes, we are able to save quite a lot of money on insurance every month by purchasing only the minimum – whether life or car insurance. However, when an accident or unfortunate medical condition which our insurance is unable to cover fully, this will leave us with HUGE bills in return! Read more on guide to proper medical coverage here.

 

7. Not investing in yourself

Over reducing expenses sometimes can result in missing out on opportunities by not investing some money in ourselves. For example, we might choose to not spend on a RM 1,000 skill course or a RM 200 suit that can help us land a high paying job.

 

8. Supersizing

Just top up RM 1 to upgrade a medium size drink and fries to a large! These attractive deals are often offered in the fast food chains and cinemas, feeding into temptation and again, making us pay extra for something we didn’t originally want. This way of “saving money” will hurt both our waistline and our wallet! Think again the next time you see this deal.

 

9. Doing-it-Yourself

Although DIY can save you some money, you may end up paying much more if something goes wrong. Know your skill limits and make sure the project is worth doing. Otherwise, seeking professional help is a better alternative.

 

10. Not getting rid of unneeded things

Some people tend to hang on to everything they have just because they are paid for despite them not needing them anymore. “I may need it someday, why not just keep them?” They then end up with a lot of clutter and it just keeps adding on with new purchases. Do declutter your items and selling it off to get back some money. You don’t use them anyway! Why not make some money out of it?

 

11. Deferring medical and dental checkups

Doctor and dental visits can be expensive and unpleasant. However, would you rather spend some money to take care of your health or spend a huge amount of money to cure an illness down the line?  Similarly, if you have pets at home, it is also wise to bring your pet for routine vaccinations and checkups to save more money in the long run.

 

12. Not buying a comfortable bed

The quality of the bed is very important for you to get a good night’s sleep and rest. You will have lower productivity at work and as well as not making good important decisions when you have not gotten proper rest. Furthermore, a good bed will ensure a good sleeping posture to protect your backbone and to ensure you are physically well relaxed to face a brand new day.

 

13. Buying cheap shoes

“Shoes will definitely wear off, so why not save money by getting cheap shoes instead?” The question is how long will a shoe last taking in the factor of price. A good pair of shoes can last for years, while a cheap pair may only last a few months before wearing out. Therefore, it is inexpensive to get a good pair of shoes in the long run in exchange for comfort and not getting sore feet or back pain.

 

14. Buying food in bulk

Many may think that it is smart to load up their food storage as it is cheaper to buy in bulks or some may have the mentality that the fridge must be filled all the time in case they’re hungry. However, how long will you take to finish them before they go stale and then contribute to food wastage? Buying groceries need proper planning like your finance as well. It is wiser to plan ahead your meals for the week, listing down only the necessary ingredients and doing your grocery shopping once a week to ensure your food are fresh!

 

15. Making minimum payments on credit cards

The easiest alternative to spend on things you really want but you can’t afford yet is credit card. Having the thought that “I can pay back later” resulted many people falling into massive credit card debts. Many of them who are in this debt trap only make minimum payments on their credit card as this “consoles” them that are only spending very little. What about the interest charges that pile up and they will end up taking decades to pay off their credit card ? Many Malaysians end up seeking help from AKPK when their debt has gone out of their control.

 

Yes! Saving money is undeniably a habit we must build in our daily life but we must ensure that it is the right way to do it or they may backfire. Do click here to read more on ways to manage your spending and here for more investment tips.

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