Money Saving Habits That Actually Cost You Money

saving money

Trying to cut costs in your daily budget is a valiant — and often necessary — practice. A few dollars saved here and there can amount to a sizeable sum over time, after all. But how you save can make a big difference in how much you save. Because when it comes down to it, not all “money-saving” tactics actually save you money. 

Here are 11 common penny-pinching tactics that could actually cost you more in the long term — and smart money-saving moves you can make instead. 

It’s Not a Bargain

Trying to cut costs in your daily budget is a valiant — and often necessary — practice. A few dollars saved here and there can amount to a sizeable sum over time, after all. But how you save can make a big difference in how much you save. Because when it comes down to it, not all “money-saving” tactics actually save you money. 

Here are 11 common penny-pinching tactics that could actually cost you more in the long term — and smart money-saving moves you can make instead. 

Buying Something Just Because It's on Sale

"Sale is the most dangerous four-letter word," says personal finance blogger Zina Kumok. And with the rise of flash sales and coupon sites like RueLaLa and Groupon, the temptation to impulse-buy just to get a good deal is even higher, adds Ozeme J. Bonnette, author of “Get What Belongs to You: A Christian Guide to Managing Your Finances.” "So often, we find a deal that is too good to pass up, yet we wouldn't have even bought the item or service if it had not been mentioned to us," she explains. (Guilty.)

Clothing sales can be especially tempting, as we justify buying items we don't need because they're half off or bargain with ourselves that we'll wear an item "someday." (Guilty and guilty!) Woroch suggests curbing the temptation to snatch up deals by unsubscribing from store e-newsletters, canceling snail mail catalogues by contacting Catalog Choice, and deleting any flash sale or daily deal apps that push tempting pop-up notifications on your mobile device. If all else fails, commit this mantra from Los Angeles-based financial expert Pegi Burdick to memory, "The most expensive thing in your closet is the item you don't wear."

Opening a Store Credit Card to Get a Discount

The offer seems like a no-brainer: Save 10-20 percent on your first purchase by opening a store credit card, but nationally-recognized consumer and money-saving expert Andrea Woroch says this practice can come back to bite you. "Store cards carry high interest rates, expensive late payments and usually tempt people into buying more than they would with cash or their debit card, especially to take advantage of that first-use discount," she says. Unless you plan to use the card one time on a huge purchase, pay it off, and then never use that card again, or if you open a card at a retailer you shop at often or exclusively, it's not worth that initial discount. Woroch suggests finding other ways to save with mobile coupons via a site like CouponSherpa.

Buying An Extended Warranty

Woroch also warns against shelling out dough to protect a big-ticket purchase. “You don't get what you pay for because extended warranties aren't what they seem to be," she says. In fact, according to Consumer Reports, stores keep 50 percent of what they charge for an extended warranty plan so that’s why they pitch it. “The warranty may be rife with restrictions and exclusions and may not offer the coverage you expect,” she explains. “You often don’t get the full explanation of how it works either, nor do many people even think to ask. Often times, the store contracts a third-party service provider and you don’t know anything about this service provider, how reliable they are, the quality of their work, how long the service will take should something need fixing or replacement.”

Instead, Woroch says that you can use a credit card that doubles the manufacturer warranty for free for that added coverage. Your state may also offer consumer warranty rights and protect resident purchases within a given period against seriously defective items, she adds: For instance, The Maine Implied Warranty is a little known law that protects Maine consumers from being sold seriously defective items within a reasonable useful life. 

Driving Out of the Way Just to Use a Coupon

Of all the money-saving tricks that end up being pitfalls for a lot of people, the main ones are usually when people perceive they'll get savings right away, says Erin Konrad, Content Developer at CouponPal, rather than thinking about the long-term savings. "For example, some people will drive out of their way if they have a coupon or hear about a discount at a store," she says. "They don't think about the gas money they waste by driving farther or to a bunch of different shops." 

David Bakke, money saving expert at, agrees that being overly aggressive in your deal hunting efforts can cost you money in the end. "Taking a one hour round trip out to a retail store to save $5 on printer ink just isn't a good use of your time. You'd be better off using that hour in other ways to save more money or to generate it."

So, before hauling yourself all over town, consider if the item is really something you need or worth the cost when you add in what it will take to get you there. Also check to see if you can use the coupon on the retailer's website before driving to the storefront. 

Buying in Bulk

Big box stores like Costco are great for large families, but the average person might not really benefit from shopping in mass quantities. "Before buying seventeen pounds of dried pasta, be sure to break down the per ounce price,” says certified credit counselor Michelle Kuehner.  “Plus, keeping it on the shelf for too long could hinder the cooking outcome — it might be gummy or take longer to prepare." Not to mention it can spoil, meaning that you've actually lost money while trying to save.

Shop smart when you're buying in big quantities, she advises. "Items like toilet paper, dishwashing [soap], laundry detergent and trash bags aren’t a problem, but they could be found cheaper by using a service like Amazon Subscribe and Save," she says. "It offers free shipping to your door, and I found is very competitive in price to the warehouse store. It also saves the membership fee." For perishables, Liz Dierking and Jenny Andrews of the tastytrade Financial Network suggest splitting your bulk shopping with a friend or family member so you won't end up tossing unused or expired items.

Putting Your Savings Into a Savings Account

Setting money aside for emergencies and the future is always a good idea, but you also want it to grow (and faster than inflation for the long term). 

In the past, savings accounts used to have higher interest rates than checking accounts but this isn’t the case anymore. For emergency savings, Kuehner suggests checking to find a list of current rates for checking accounts, along with the minimum requirements to qualify for a higher rate. 

If you're not getting good returns, Dierking and Andrews advise putting at least some savings into a brokerage account instead. Not only can you invest your savings in low-risk funds, you don’t even have to invest it at all. “The money in your brokerage account you are not investing will still earn a slight interest rate,” Dierking and Andrews say. “The real benefit is that you have the money there ready to invest — with all the tools and flexibility of investment choices you just don't have with a typical savings account.”

Buying More Online to Qualify for Free Shipping

We've all been there: You're about to check out when you realize you need to spend $20 more to waive your shipping costs. "What happens is you often spend more than you originally planned just to save a few bucks on shipping," Konrad says. 

Of course, if the retailer offers free return shipping, this isn't as big of an issue—just send back whatever extra items you bought to get the shipping fee waived. (We imagine this is pretty common practice—according to one 2011 study, 40 percent of clothing purchases made online are indeed returned.) 

But, there is still a risk over overspending if you end up liking the extras you bought and keeping them, costing you more in the long run. So, it's safer for your budget (and better for keeping your closet clutter-free) to buy what you intended to and pay the $5 shipping fee. Also, always be sure to check a coupon site like or before checking out to see if there are coupon codes or discounts you can use on your purchase. 

Buying the Cheapest of Everything

If your eye naturally gravitates to the lowest price of every item you buy, you'll end up spending more money over time, says Kyle James, owner and founder of "Instead, develop the mindset of investing in certain high quality items and you’ll actually end up saving significant money," he says. "For example, every time I have skimped on a tool purchase — this goes for both power tools and hand tools — it has come back to haunt me." 

He suggests doing your research before you buy big ticket items especially and make sure you're getting a quality product — it's definitely worth the extra money as you won’t have to replace the item anytime soon. This isn't to say that you can't buy the cheapest of anything, Bakke adds, rather it's important to know when it's okay to do so. 

"It's OK to shop the dollar store for office supplies, for example, but when you're talking about a flat screen TV or a laptop, it pays to invest in quality," he says. "You don't have to get the most expensive product on the market, just don't go with the cheapest."

Overspending to Get Credit Card Rewards

While many of us know that having a credit card that offers rewards comes with perks like cash back, airline miles, and free hotel stays, that doesn't mean it's worth racking up a bigger monthly balance just to reap those benefits. "If you spend $50 on a credit card to get the three percent cash back, you're not saving any money," Kumok says.

While she explains that, generally if you're redeeming for material goods, you're better off buying in cash than redeeming points, spending money on certain cards can indeed pay off. Kumok recommends Barclaycard Arrival World MasterCard for travel deals, which gives you 10 percent of your miles back when you redeem them. But she says she personally likes to “churn” her awards-giving credit cards, which means that you sign up for different credit cards to get sign-up bonus offers, like 20,000 miles if you spend $3,000 in three months. 

“That's where you get the most bang, especially if you were going to spend the money anyway on stuff like groceries, gas, and so on,” she says. “And it’s best way to get miles quickly and efficiently.” (However, those with low credit scores might not be able to do this without further damaging their credit, so talk to a financial advisor if you’re unsure.)

Buying Everything on Black Friday

Everyone knows that Black Friday is the day to score awesome deals, but frugal shopping expert Trae Bodge, senior editor for The Real Deal by RetailMeNot warns against holding out on making all of your big purchases that day. "While Black Friday is a great time to score deep discounts on electronics and entertainment items, other categories can be purchased during other times of the year at even better prices," she says. "Sales follow a seasonal calendar—as an example, spring is a great time to buy winter apparel because retailers are clearing inventory to make way for warm weather clothing."

Taking Advantage of Loyalty Program Discounts

Being a loyal customer can win your brownie points with major companies—or even give you a break on fees and services. However, not all of them will actually save you money, Kuehner says. "It’s the perception that loyalty gives you a better deal," she explains. "I was recently helping someone with their budget, and when I suggested shopping around for insurance, they axed the suggestion quickly, saying they get a discount for being a long-time customer, so it would be cheaper than anything around. They were wrong — they could get the same coverage elsewhere for almost $100 per month less." Her advice? "Shop around for insurance, and save the loyalty for your family and friends."

You Might Also Like: 
Think Like a Millionaire
Are Your Friends Hurting Your Finances? 
The Secret to Successful Budgeting? Splurge a Little