There’s nothing wrong with peso-pinching here and there. In fact, we urge it. It gives you some extra cash to save or an additional budget which you can allocate to cover other expenses. However there are times when peso-pinching can do more harm than good.
Here are 12 instances when being too frugal can backfire:
1. Buying a second-hand car vs a new one
The general rule is, unless you can’t afford a brand new model, stay away from used cars. Sure it sounds like a bargain, and you’ve checked the mileage and did a test run. But an older car breaks down faster, and you’ll be keeping up with maintenance costs sooner. Problems may (and they usually do) crop up after using it for a while which you may have missed during your test drive. And former owners may neglect to tell you the car’s been flooded (that’s why they’re selling it!). Unless you know about cars or have a trusted mechanics to verify things for you, it’s always better to stick to brand new vehicle, especially when they come with warranties.
2. Going for generic antibiotics
It’s tempting to buy generic, but save those for your maintenance meds. The doctor prescribed those for you because they were tested to work best. But you’ll end up spending more if you insist on buying generics now and later on find out that you’re still sick. Value your health more, and don’t be penny wise, pound foolish in this situation.
3. Playing doctor
Playing doctor is equally destructive. A common cold can be pneumonia brewing. Listen to your body when it tells you it’s time to seek professional help. It is always cheaper to cure diseases while it’s still in the initial stages. The worst thing you could do is to ‘google’ your symptoms and administer treatment without seeking a doctor’s advice.
4. Cutting corners in home-building
Your safety is paramount. We live in a typhoon path where an average of 20 storms per year batter homes on every corner of the archipelago. You want your home to be your family’s sanctuary when this happens. And for that you need a good solid foundation with strong walls and roofs.
5. Do-It-Yourself: plumbing and electricity
DIY projects are excellent money saving alternatives. However, there are cases which calls for professionals, such as wiring electricity and installing plumbing around your home. Call for licensed plumbers and electricians instead of having to DIY. Leaking pipes will add unnecessarily to your monthly water bill and poor wiring can cause fire.
6. Doing away with extra leg room (and food) for long haul flights
While budget airlines are perfect for short flights that last from a few minutes to an hour or two, you may want to consider paying extra for a 15-hour long flight. You’ll probably sleep half the time. But the other half will be spent eating, going to the comfort room, reading or chatting with your seatmate. And you wouldn’t want to be cramped in your seat (and starving!).
7. Choosing connecting flights vs continuous
If you can get a continuous flight especially for overseas travel, then take it. This reduces the chance of losing your baggage, especially if you’re transferring to a different airline. You also don’t have to worry about missing your next flight if the previous one gets delayed or cancelled.
Having to rebook particularly when you purchased a flight without that option, can cost you thousands of pesos.
8. Scrimping on accommodations at shifty locations
While it’s fine to look for cheaper alternatives in big cities, it is better to invest in better accommodations when going to remote locations. If possible, settle for 3-star accommodation at the minimum. You don’t want to gamble with your security.
9. Buying cheap shoes
A P500 pair can disintegrate when it rains (mine did — like it was made of paper!). A good pair of shoes protects your feet from the elements and saves you from blisters whenever you want to walk to save on transportation costs. And it will last for years. Shoes you buy for P3,000 which serves you for ten years will still come out cheaper than buying one for P500 every year for ten years!
10. Taking public transport or walking for late night trips
If you find yourself having to travel past midnight, opt to take a cab. Always take your safety into account. While cabs may not be safer than taking the bus when you consider the risk, services such as GrabTaxi, GrabCar and Uber will afford you an extra layer of protection. These services gives you access to valuable information such as the name of your driver, the vehicle’s plate number which you can forward to your family or authorities in case of an incident.
11. Cutting back on food
Save on everything else but food. Having said that, what we really mean is, don’t cut back on the quality of the food. If there’s anything to reward yourself with your hard-earned money, the first on your list should be food. However, when people try to save, the first thing they cut back on is food. You can cut back on expensive food, but don’t give up on healthy food and opt for instant noodles just to save money. You need nourishment to be able to work and earn more money — which means, buying food is a good investment.
12. Holding off to buy a new fridge (or new appliances for that matter)
If your fridge or TV is reaching its 20th birthday, you may want to consider buying a new one. New appliances are built to be energy efficient. This can save you thousands on your electric bill in the long-run.
The first thing to consider is whether you can afford that extra stretch of luxury. And if you do, never take your safety and long-term savings for granted in exchange for a couple of pesos which are definitely, not worth the effort.