Sometimes, in the quest to save money, we can end up spending more than we would have done in the first place. Seven in 10 people say they have fallen for false economies in the past, with a fifth admitting they do so at least once a month, according to a report by TopCashback.co.uk, with fear of missing out on a good deal cited as one of the most common reasons for doing so.
How to avoid false economies
Convenience and a lack of time were also among the most likely causes of falling for a false economy, while one in six (16%) of the people surveyed said they were reeled in because they found it hard to work out the maths when weighing up whether something was a good deal or not. A further 16% felt “tricked” by retailers and providers into thinking they were making the best decision.
So how can we avoid paying more for what initially seemed like a bargain? Here are some of TopCashBack.co.uk’s top tips…
1. Don’t buy cheaply if you’ll end up paying more
Buying cheap items – whether it’s cheap shoes, cheap paint or even cheap toilet roll – may seem like a saving, but if the product doesn’t last and you end up having to replace the item regularly, it becomes a false economy. When shopping, weigh up the quality of an item before getting enticed by a cheap price tag.
2. Pay more than the minimum off on debts
Although it’s tempting to put something expensive on a credit card and then pay off the minimum balance each month, you often end up paying a lot more for it because of interest charges. Unless you have an interest-free credit card, it’s always best practice to pay off your credit card balance in full each month.
3. Don’t scrimp on insurance
Whatever the insurance – travel, boiler breakdown or life – going without insurance can cost you a lot more in the long run. Although insurance payments may seem unnecessary when everything is working fine, the moment something goes wrong, you’ll be thankful.
Need insurance advice? Read the Wise Living guide to home, travel and car insurance.
4. Be aware when bulk-buying
It’s tempting to stock up on ‘special offers’ to avoid paying more later on. However, if your bulk buys are going to end up shoved to the back of the cupboard for months, they may end up going out of date by the time you get around to digging them out again. Or if you forget you have them, you may end up buying duplicates.
5. Remember to complain
If you buy a product that turns out to be faulty or doesn’t deliver in the way you expected, make a complaint or try to get your money back, rather than just grumbling to family and friends.
Letting the item take up space around the house, or simply accepting the fault is basically chucking money away. Contacting the company, Tweeting the customer service team or going in store can go a long way towards getting some (or all) of your money back, of money off your next purchase.
6. Think about DIY carefully
Trying to do something around the house yourself, whether it’s putting up shelves or doing some plastering, may seem like a cheaper way to get things done, but can cost a hefty amount if you end up having a mishap. Before you get stuck in, make sure you have the right tools and the know-how, and if you don’t, it’s probably worth getting in a professional.
Read the Wise Living guide to painting a room.
7. Be savvy in the supermarkets
Supermarket shopping can be fraught with false economies. TopCashback’s research found people are particularly likely to make false economies when buying food products and groceries. When browsing the aisles, think about whether it’s worth buying a bigger packet that costs slightly less, if the items are going to go to waste anyway.
Loyalty points and reward cards could help to cut the cost of your shop. And try to avoid shopping when you’re feeling hungry or tired, which could make you more likely to pile up your trolley, just so you can get out of the store.
8. Do your research
Take the time to research what a good really deal is, rather than spontaneously investing in items. TopCashback’s research suggests many people find it hard to work out the maths when weighing up an offer, so doing some research beforehand may help.