7 MONEY HACKS THAT ACTUALLY COST MORE DOWN THE ROAD — AND WHAT TO DO INSTEAD
We’re always looking for helpful ways to save money by spending more effectively or reducing unnecessary expenses. Like life hacks, there are numerous money hacks out there to achieve such goals. However, they aren’t all created equal, and some can end up costing more down the road.
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Here are seven such hacks you should avoid, along with what you can do in their place.
1. Buying in Bulk
According to Bloom Financial Health, buying in bulk is a common way of saving money because of the lower unit price. There are often deals for purchasing more than one item at a time. However, this can easily lead to overbuying, especially when it involves perishables like food or other household goods with an expiration date.
Instead, you should carefully analyze your spending and household consumption to determine what items you truly benefit from by having extra on hand.
2. Too Much Focus on Coupons
Coupons generally seem like a no-brainer for saving money. The issue is that many times, coupons apply to items that are already very expensive. This means that even with them, you can end up spending more than you would for an alternative item. Coupons may also incentivize you to purchase things you don’t really need. You should rely on coupons only for products you are already invested in or actually need.
3. Buying the Cheapest Product
Jason Higgs, Senior Deals Strategist at Bountii, said that buying the cheapest product brand can result in more repairs or replacements, particularly for electronics and appliances. Sometimes, the higher upfront cost is worth it for the higher guarantee of long-term performance.
A better strategy would be to go for the middle ground. You don’t need to go all out on the most expensive product possible, but you also don’t necessarily want the cheapest, often unreliable option.
4. Dangers of DIY
DIY, in general, is considered a great way to save money. But you shouldn’t rely too heavily on doing it yourself, especially if the job isn’t something you’re proficient at. An injury will bring medical bills and lost wages likely exceeding what it would have cost to hire a professional, according to Higgs.
This is further backed by John Rampton of Due, who said acquiring all of the items necessary for a DIY project can end up costing more than outside help. Unless you have expertise in the project and determine it to be safe and cost-effective to buy what you’ll need, you should take advantage of those who are trained for the job.
5. Investing Like a Billionaire
Stacy Garrels of Finance Buzz said there are a number of money hacks, courtesy of TikTok, that you shouldn’t follow. Many of these don’t even come from financial experts. One such suggestion is to imitate a rich person’s investment portfolio — the issue here is that billionaires can afford to take high risks, whereas such a loss would be a severe detriment to an average person. It’s a much safer idea to invest at a risk level you can afford.
6. Filing for Bankruptcy
According to Finance Buzz, if you’re in deep debt, you shouldn’t just file for bankruptcy because you think it will benefit your credit report. For one thing, it can lower your credit score by several hundred points. For another, it will stay on your credit report for 7-10 years, according to Debt.org. Filing for bankruptcy is not a decision to consider lightly and certainly not one to make based on the suggestion of TikTok.
7. Money Rules
Sticking to a 50-30-20 rule isn’t a universal sensibility because everyone’s finances are different — to say that each person should spend 30% of their income on feel-good items is a generalization, said Garrels. It’s a better idea to consult a financial advisor to help you develop investment strategies and savings plans that are specifically crafted for you.
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This article originally appeared on GOBankingRates.com: 7 Money Hacks That Actually Cost More Down the Road — and What To Do Instead
2024-05-07T22:50:44Z dg43tfdfdgfd
