NEW YORK (MoneyTalksNews) — While it’s true that “a penny saved is a penny earned,” take it too far and another expression applies: “A fool and his money are soon parted.”
It’s dumb to pinch pennies if the result ultimately costs more than the savings. For example, using $2 worth of gas to drive across town to save $1 on a tankful.
In the video below, Money Talks News founder Stacy Johnson takes a look at more penny-wise, pound-foolish decisions. Check it out, then read on for more…
Now here’s an expanded list of expenses where over-saving may ultimately result in overspending.
1. Car maintenance
Bad idea: Skipping an oil change. You save $30 now, but your engine won’t last as long. Best case, you spend $5,000 on a new engine years before you had to. Worst case, it might happen next week.
Better idea: When you change your oil, don’t overdo it: some cars only require an oil change every 6,000 miles. Check your owners manual. Another place you might save? Fewer tune-ups. Check with your mechanic, but many will say if your car’s running fine, it’s OK to leave well enough alone.
2. Car insurance
Bad idea: Reducing your liability coverage. Whatever you might save, it’s not worth it in case of an accident. You need enough insurance to cover your net worth.
Better idea: If you’ve got a clunker only worth a few hundred bucks, consider dropping collision and comprehensive – the part of your policy that reimburses you for damage that’s your fault, or perils like fire and theft. That’s one of several ways to save on car insurance. Single best idea? Raise your deductible.
Bad idea: Dropping health insurance, skipping doctor visits, splitting your prescription doses or otherwise not properly taking care of yourself. Even if you’re feeling fine, saving a few bucks now can cost you tens of thousands later, not to mention your health, your happiness and even your life.