Sometimes it’s easy to get caught up with frugality and saving but lose sight of the bigger picture. Some might say this is penny wise, pound foolish. You think you’re making smart decisions to save, but end up spending more in the long run.
So, I was trying to think of some examples and realized I’ve probably encountered most of these myself -
Examples of Penny Wise, Pound Foolish
Skimping on Legal Counsel – I had a very good friend who used to practice law and he once told me that legal matters are not where you want to be a penny wise and pound foolish. For example, if you’ve been sued, you would want to bit the bullet and pay for reputable counsel.
Using Store Credit Cards to Save – You might be penny wise and pound foolish if you open up a credit card to get a store discount but spend more than you can pay off at the end of the month and pay interest charges. The same could be true if you use a 0% credit card but miss a payment and are charged fees and interest.
Driving Further to Save Money – A lot of people will drive around town to find bargains, but fail to think about all the money they’re spending in gas, eating out and other expenses when you’re away from home.
Buying Lower Quality – I’m guilty of buying lower quality clothes sometimes that look great in the store, but don’t last very long. You know what I’m talking about! I’ve spent two to three times as much on higher quality shirts before and they’ve warn well and still look new after being washed and going to the cleaners.
Trying to be a Tax Expert – While I’ve done my own tax work using TurboTax, there are just some situations where I think you need to use a CPA. Why save money and do your taxes yourself in a complicated situation and end up making a mistake or worse, setting yourself up with an Audit. Know when to call in the experts!
DIY Around the House – Now you’d probably imagine I’m an advocate of DIY, especially when it can save a little money. However, there a few projects (none I care to mention) that have cost me more in the long-run. Know what you can do yourself and certainly be safe. Don’t do anything you think could result in needing a professional to fix your mess! Otherwise, you could end up spending 2 0r 3 times as much.
What are some other examples of penny wise, pound foolish.