5 Penny-Pinching Tactics That Actually Cost You Money

Saving money can do things to your brain. And no, I’m not kidding: There’s a reason for the whole psychology of misers, which we’ve known for at least a century. See, your brain is wired to think anything worth doing is worth overdoing. It’s like drugs, dieting (i.e. anorexia), and petty budgeting. On occasion, I see penny pinching tactics which, despite making sense on the surface, end up wasting thousands of dollars. Here are seven of the most common in Singapore:

 

 

1.Saving Without Investing

Both I and Mr. Tan Kin Lian have mentioned emergency funds. That is, six months worth of savings in a bank account. As it turns out, Singaporeans are pretty enthusiastic about this; like Sub-Saharan scavengers, we’ll build a reserve and never touch it. Not even if it comes to boiling our own toenails for supper.

The problem is, we don’t know when to stop. Plenty of Singaporeans cross the six month mark, and then decide “forget investments, I might lose money. Better keep dumping all the cash into the emergency fund, forever.”

Gradually, the “six month” fund transforms into a sub-par retirement plan. Then low interest and high inflation kick in, and the fund’s value starts diminishing at a monstrous rate. When retirement does come around, we’re left wondering where all the money went.

Saving without investing is losing money. There is no way $2000 now will be worth $2000 in ten years. Every year you leave money in a savings or current account, inflation chews up a percentage of your total wealth. So stop once your emergency fund is built, and start investing instead.

 

 

2. Going to the Dentist Only When Desperate

Despite the Health Promotion Board’s (HPB) recommendations, most Singaporeans insist dentists are for emergencies only. We’ll drop by when we have a toothache, but beyond that, bleeding isn’t high on our list of hobbies. Nor is having to pay $60 – $120 to hear we should brush more often.

Too bad plaque and cavities accumulate with time…so that when we do rush to the dentist, they find damage that’s less reversible than Bush’s election. Did you know an operation like a root canal, which may come from, oh, not regularly seeing the dentist, can hit the $10,000 mark?

And I haven’t even started on the cost of extractions, implants, or hundreds of expensive procedures; all of which can be avoided with two to three visits a year.

 

 

3. Buying the Cheapest Insurance Plan Possible

For most Singaporeans, insurance is something we’re forced to buy. Like car insurance, home insurance, etc. The only thing we look at are the premiums. Actually asking for more coverage is alien to us; like volunteering to extend our NS, or requesting extra fines from a traffic cop.

Then when the car gets trashed, or a stove sets the kitchen on fire, the SCDF gets called in twice. Once for the accident, and the second time for when we see the repair bill and pop an artery. Fact is, increased coverage may just add $50 – $100 to insurance premiums. And if you know there’s a real risk, that extra amount is probably worth it.

Are you really so poor that another $50 – $100 would deprive you of three full meals? If not, buy the increased coverage. Or you just might find yourself in that situation.

 

 

4. Unnecessary Bulk Buying

Singaporeans are big on packaged deals. We can’t grasp the concept of buying just what we need. Even if a Singaporean is living alone and suffering from Asia’s worst case of constipation, he’d still buy a 12 toilet roll pack instead of a six.

Because hey, it saves money! It’s a $2 discount! And we’ll apply the same principle to canned food, bags of peanuts, hair bands, etc. Then when our houses are filled to bursting, usually with expendable items that won’t keep, we start buying storage.

Maybe if we didn’t buy so much unnecessary junk in the first place, we wouldn’t need 10 extra cupboards and enough Tupperware to store Somalia’s food supply. And when we hit the absolute spatial limit that physics allows, we start the wasteful process of dumping everything. We may as well skip a step and feed dollars into a shredder.

 

 

5. Pushing the Car to Its Absolute Limit

Hey, what’s that funny grinding noise from the car?

Ah, never mind, as long as it moves. Because taking it to the mechanic always costs money right? Or the mechanic will tell us about non-existent issues; like the giant crack in an axle, or a broken fan belt, or the possibility that we’re driving a soon-to-be fireball on the express way.

If you recognize the attitude, then you’re the average Singaporean driver. Most of us would rather live with sticky gears or clanking noises than pay for servicing. In fact, some Singaporeans even avoid free servicing with their car dealer; because not having a car might mean cab fares.

The problem is, cars aren’t organic. Their little stress fractures, unlike flesh and bone, don’t magically knit back. They just get worse. And if we keep pushing, problems start to multiply like bacteria in an NS Man’s socks. In a matter of months, something like a bad fuel injector could end up wrecking the entire engine…and then we’d go from saving $1000 to blowing $30,000.

 

 

Ultimately, wanting to save isn’t a bad attitude. But it has to be done with some foresight: Don’t just look at how much is going into your wallet; think about potential costs, and weigh them against your immediate gains.

Image Credits:
puuikibeachemilio labradorHerryLawfordLeonid Mamchenkovltiromaureen lunnImages_of_Money

Did you ever have money saving tactics that ended up wasting even more cash? Comment and let us know!

Get more Personal Finance tips and tricks on www.MoneySmart.sg

Click to Compare Singapore Home Loans, Car Insurance and Credit Cards on our other sites.



More From MoneySmart
Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Couple married 67 years holds hands in final hours together
    Couple married 67 years holds hands in final hours together

    FRESNO, Calif. (AP) — After spending 67 years together as devoted husband and wife, there was no question how Floyd and Violet Hartwig would end their lives — together. …

  • Lupita Nyong'o's $150,000 Oscars dress stolen from hotel
    Lupita Nyong'o's $150,000 Oscars dress stolen from hotel

    The $150,000 pearl-studded, custom-made Calvin Klein dress worn by Oscar-winning actress Lupita Nyong'o at this year's Academy Awards has been stolen, police said on Thursday. The gown, embellished with 6,000 natural white pearls, was stolen from Nyong'o's room at the London Hotel in West Hollywood, during the day on Wednesday, a spokesman for the Los Angeles County Sheriff's Department in West Hollywood said. "Ms Nyong'o was not in the room at the time of the theft," Deputy John Mitchell …

  • US-led strikes on IS after group seizes 220 Christians
    US-led strikes on IS after group seizes 220 Christians

    The US-led coalition has carried out air strikes against the Islamic State group in northeastern Syria, where the jihadists have launched a new offensive and kidnapped 220 Assyrian Christians. The raids on Thursday struck areas around the town of Tal Tamr in Hasakeh province, the Syrian Observatory for Human Rights said, without giving information on possible casualties. The town remains under the control of Kurdish forces, but at least 10 surrounding villages have been seized by IS, along …

  • Militants abduct more Christians, smash ancient artifacts
    Militants abduct more Christians, smash ancient artifacts

    BEIRUT (AP) — Islamic State militants seized more Christians from their homes in northeastern Syria in the past three days, bringing the total number abducted by the extremist group to over 220, activists said Thursday. …

  • 3 Pinays on Forbes power women list
    3 Pinays on Forbes power women list

    Three Filipina executives, who are all daughters of known business tycoons in the country, made it to Forbes’ list of the 50 most powerful businesswomen in Asia. Teresita Sy-Coson, vice chairman of SM Investments and chairman of BDO Universal Bank, was included in the list for the fourth year in a row since its inception. “Under her (Sy-Coson) lead SMIC became the largest listed company on the Philippine Stock Exchange by market cap. Also in the 2015 list is 70-year-old Helen Yuchengco-Dee, …

  • 13 of 15 SAF survivors to leave PNP hospital
    13 of 15 SAF survivors to leave PNP hospital

    Thirteen of the 15 Special Action Force (SAF) policemen who survived the bloody firefight with Muslim rebels in Mamasapano last month are ready to go home after a month of medical treatment, a police official said yesterday. Philippine National Police (PNP) spokesman Chief Superintendent Generoso Cerbo Jr. said the two remaining survivors will have to stay in hospital for further treatment, one of whom has shrapnel embedded near his spine. One of the two SAF commando survivors is still …

  • US sends spy plane to patrol disputed sea
    US sends spy plane to patrol disputed sea

    The United States has deployed its newest and most advanced surveillance aircraft for patrols over the West Philippine Sea and South China Sea. The P-8A Poseidon aircraft completed more than 180 flight hours from Feb. 1 to 21 from Clark Air Base, according to the US Navy’s 7th Fleet. …

  • Review: SKK Mobile V2, a P3,999 watered-down LG G2
    Review: SKK Mobile V2, a P3,999 watered-down LG G2

    How well does this P3,999 offering from an underdog in the local mobile industry stack up against the competition? Let's find out. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options