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.

  • Indonesia defiant as UN leads condemnation of looming executions
    Indonesia defiant as UN leads condemnation of looming executions

    Indonesia on Sunday signalled it was determined to push ahead with the execution of eight foreign drug convicts, despite a growing wave of global condemnation led by United Nations chief Ban Ki-moon. Authorities on Saturday gave formal notice to the eight -- from Australia, Brazil, Nigeria and the Philippines -- that they would be executed by firing squad imminently, along with an Indonesian prisoner. The group have been moved to the high-security prison island of Nusakambangan, where …

  • Philippines calls on ASEAN to urge China to halt land reclamation
    Philippines calls on ASEAN to urge China to halt land reclamation

    The Philippines called on its Southeast Asian neighbours to unite in urging China to halt reclamation of land in the South China Sea, but the call failed to raise widespread support ahead of a regional summit. China claims 90 percent of the South China Sea, which is believed to be rich in oil and gas. Its claims overlap with those of Brunei, Malaysia, the Philippines, Vietnam and Taiwan. Recent satellite images suggest China has made rapid progress in filling in land in contested territory …

  • Philippines urges ASEAN to stop China in South China Sea
    Philippines urges ASEAN to stop China in South China Sea

    KUALA LUMPUR, Malaysia (AP) — The Philippines on Sunday urged its fellow Southeast Asian countries to take immediate steps to halt land reclamation by China in the disputed waters of the South China Sea, warning that failure to do so will see Beijing take "de facto control" of the area. …

  • Philippines urges Southeast Asia to rally to halt China reclamation in disputed waters
    Philippines urges Southeast Asia to rally to halt China reclamation in disputed waters

    The Philippines on Sunday called on neighbouring Southeast Asian nations to push for an immediate halt to China's reclamation in the disputed South China Sea ahead of a regional summit. China claims 90 percent of the South China Sea, which is believed to be rich in oil and gas, with overlapping claims from Brunei, Malaysia, the Philippines, Vietnam and Taiwan. Recent satellite images suggest China has made rapid progress in building an airstrip suitable for military use in contested …

  • President to appeal for Filipina's life at Malaysia summit
    President to appeal for Filipina's life at Malaysia summit

    The Philippine president said Sunday he would appeal for mercy for a Filipina who is due to be executed in Indonesia in two days' time. President Benigno Aquino said he would take the opportunity to seek clemency for Mary Jane Veloso, who is due to be put to death on Tuesday, while in Malaysia for a regional summit Monday. "Once I am there, I will try to speak to President Joko Widodo of Indonesia to appeal once more for her case," Aquino said. She was arrested in 2009 with 2.6 kilograms …

  • U.N. chief appeals to Indonesia not to carry out executions
    U.N. chief appeals to Indonesia not to carry out executions

    United Nations Secretary-General Ban Ki-moon appealed to Indonesia on Saturday not to execute 10 prisoners, including two Australians, for drug-related crimes. Indonesia has so far informed seven of the 10 death row inmates, including the Australians and one Nigerian, that they will be executed in a matter of days, possibly as soon as Tuesday. Nationals from Brazil, Ghana and the Philippines are also on Indonesia's death row. A temporary reprieve was granted to a French citizen who will not …

  • Beijing 'poised to take de facto control' of S. China Sea'
    Beijing 'poised to take de facto control' of S. China Sea'

    Beijing is poised to take "de facto control" of the South China Sea, the Philippines warned Sunday, but its call for a robust Southeast Asian response at a regional summit was shot down. Vietnam, the Philippines, Malaysia and Brunei claim parts of the strategic body of water, but Beijing claims nearly all of it, and its increasingly strident territorial assertions have caused concern in the region and beyond. "(China) is poised to consolidate de facto control of the South China Sea," …

  • US eyes access to Phl bases in 8 locations
    US eyes access to Phl bases in 8 locations

    The United States has asked for access to Philippine military bases in eight locations to rotate troops, aircraft and ships as Washington shifts its forces to Asia and as China expands its military presence in the South China Sea. US Defense Secretary Ash Carter, in a speech in Arizona, has outlined Washington’s next phase in its Asia “pivot,” deploying its most sophisticated destroyers, bombers and fighters to the region. The Asia “pivot” has already seen US Marines rotating through the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options