Nine Ways That Being Frugal Can Cost You MoreBeing frugal is smart, and these days, it's fashionable too. Sometimes, though, it just doesn't make sense to be a Scrooge: Going too far in your attempts to save can have financial consequences that leave you significantly worse off. Here are nine ways you shouldn't cut corners.

1. Ignoring Insurance. Insurance of any kind can be expensive, but not as expensive as not having it, says Jim Garnett, also known as "Ask Mr. G," a financial expert with the Institute of Consumer Financial Education. Home, car, life and health insurance are important enough to sacrifice in other areas to afford it. "One accident, one major illness, one fire, or one death can literally send us to the bankruptcy court if we are not insured adequately," says Garnett.

2. Miserly Maintenance.
"Home and car maintenance are not areas in which we should focus on being 'cheap'," says Garnett. When it comes to your home, things like painting, caulking, replacing furnace filters, having the chimney cleaned and repairing the roof cost money, and car maintenance such as oil changes and tire rotation can seem like the sorts of things you can get away with postponing. But spending a little on regular maintenance usually helps avoid big bills for major repairs later, Garnett warns. It's also not always the wisest move to go with the least expensive solution: The cheapest mechanic in town may not be your best choice.

3. Unrealistic Budgets. So often, well-intentioned people derail their newly constructed budget plans by being too strict. They cut each category, then discover they can't adjust their lifestyle to fit the plan, and abandon the plan altogether. "Going on a budget diet is no different from going on a food diet. If you deprive yourself of too much, you're likely to blow off the plan [and] go on a spending/eating spree, leaving you worse off than when you began and too discouraged to try again," warns Gail Cunningham, spokesperson for the National Foundation for Credit Counseling.

4. Avoiding the Doctor or Dentist
. Putting off a visit to your medical practitioner when you have a health issue can be dangerous and might cost you more in the long run, says Cathi Brese Doebler, author of Ditch The Joneses, Discover Your Family. Regular check-ups can help prevent smaller problems from morphing into major issues. "Fixing a small cavity in your teeth will be less expensive than having to do more extensive work on a severely damaged tooth that has been neglected," she notes.
5. Senseless Shopping. People can be quick to purchase anything they have a coupon for, or anything that's on sale. "To be sure, smart shopping encourages us to look for bargains," says Garnett. "But buying things we do not need just because 'it is a good deal' is senseless shopping and cannot be justified," Over time, it adds up.

6. Raiding the Retirement Account. This is another method that's often viewed as a "cheap way to get what we want" that usually backfires, says Garnett. When retirement funds are raided to pay off debt, people most often find themselves back in an equally deep debt hole after just 30 months. Plus raiding of one's retirement accounts early without a repayment plan can result in a 30% to 40% loss of the total withdrawn due to penalties and tax liabilities, says Garnett.

7. Shortsightedness at the Supermarket. Some foods are cheap for a reason -- they're not healthy. "If you spend less money on food, but the food is unhealthy, you can impact your health over time. This can lead to long-term health problems and more visits to the doctor," says Brese Doebler. "Many healthy foods can also be affordable foods," she adds.

8. Picking Insurance by the Premium. "Many people shop for health insurance by looking at just the monthly price of the plan. But there are many other things to consider," says Carrie McLean, consumer specialist with "Going the cheapest route might end up being more expensive. For example, a health insurance plan with a low premium, but a high yearly deductible of thousands of dollars can be costly if you end up needing major medical attention," she adds.

9. Snubbing Savings "I've often heard someone say, 'But I can't afford to save because the interest I make is less than the interest I owe!' " says Garnett. However, you shouldn't view your emergency saving account as an investment -- it's there for the purpose of anticipating problems before they happen, says Garnett. "The money you save by not having to go into debt to pay for those emergencies will far outweigh the fact that your savings interest is low," he adds. Save even $10 per paycheck, he says: "Not saving will end up costing you more." Similarly, being too cheap to sock away money in your 401(k) a the level that gives you your employer's full company match is turning your nose up at free money.

You always want to be a wise shopper who gets the most value for your hard-earned cash. But always remember to ask yourself whether a deal is the real deal, or whether the short-term savings you're pursuing might make you pay in the long run.

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Major Fraud Alert

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May 29 2011 at 12:34 AM Report abuse rate up rate down Reply

uhmmm this is all great..... --unless you dont have any money--.

someone making 8/hour at wal-mart --cannot afford a doctor--. it doesnt matter how much more it will cost in the long run. the doctor has a sign, payment expected when services rendered. no money, no doctor. nobody cares about your long term financial problems, they want payment now.

same with the grocery store. your health is not their problem. if you cant afford apples and tomatos, go buy hamburger helper and white flour. thats reality.

i dont think the author 'gets it'.

March 24 2011 at 12:52 AM Report abuse rate up rate down Reply

I'm disappointed that none of the frugal posting here have tried do-it-yourself surgery and reported how it has worked out or them.

March 22 2011 at 10:37 AM Report abuse rate up rate down Reply

I think this article is for the rich. Insurance? who can afford insurance ! Cheep food ! , More the problem is eating out , not packing a sandwitch to work, also not understanding what things cost in a supermarket (beef is too high right now , just wait) Doctors, I'm fine since I pay cash , I'll go when I need to . Retirement act ? Whats that? Car Maintence , yes for one if my car breaks I lose my job , but you need a non-scam garage that just wants to tell you timing belts, brakes,oil service are due . Maybe they should put credit card use as a NO , ATM fee use as a NO. Stupid impulse buys like vehicles (before its paid off)when not necessary or the lease option (fools bet) Use of thrift stores before furniture retailers , and of course credit and "rent to own" shams where you pay 3x the real price . Insurance is something you do not need if you have nothing , medical welfare is available if you are hitting bottom.

March 22 2011 at 9:03 AM Report abuse +2 rate up rate down Reply

Yes, but what if just going to the doctor for a routine check-up will send you into bankruptcy? I'd rather take my chances with a major illness... at least then they legally have to let me make *tiny* monthly payments.

This article is ignorant and condescending, and the author seems to be under the impression that people are skimping because it's "fashionable". Perhaps she didn't consider that many people actually can't afford insurance, doctor check-ups, and certainly can't afford to save (especially if paying for insurance, doctor check-ups, etc...?). It's not a matter of not wanting to, trying to be "fashionable" (I'm sure many WISH they had that luxury), or being unaware of bigger costs later... it's a matter of ACTUALLY NOT HAVING THE MONEY!

What a condescending load of crap!

March 22 2011 at 4:46 AM Report abuse +1 rate up rate down Reply




March 22 2011 at 1:30 AM Report abuse +3 rate up rate down Reply

#10 Cheap condoms. Need I explain?

March 21 2011 at 11:38 PM Report abuse +2 rate up rate down Reply

Cut taxes thats the biggest problem

March 21 2011 at 8:15 PM Report abuse +3 rate up rate down Reply
1 reply to gradona941's comment

Great Idea! That will defenitely solve our financial problems....By the way, 'Nine Ways Being Cheap Can Cost You'??....LOL!

March 21 2011 at 8:37 PM Report abuse rate up rate down Reply

all those things are great with money in the bank, but most people I know are barely getting by. The government says the recession ended last June but here in Fla. it's still going strong has been for 5 years.

March 21 2011 at 1:52 PM Report abuse +7 rate up rate down Reply
1 reply to mike's comment

Budget, knowing where your money goes can help you improve your financial life.

March 22 2011 at 5:02 AM Report abuse rate up rate down Reply

It is so easy t advise people to seek medical/dental care...I am 59 yrs old, no job, a transitional unemployment claim has left me with $79.00 a week.I have about $10,000.00 in savings...If I use that then I cant pay for rent and me and all my belongings end up on the street...If I have that little bit of money I do not qualify for medical care...I have a few serious health issues, but if I look after them I will become homeless after paying for Dr bills...if I do not seek care I can keep my apartment for another 6 or 8 months and hopefully find a job...but the health issues get is so easy to give advise isnt it?

March 21 2011 at 1:24 PM Report abuse +4 rate up rate down Reply
2 replies to capabilitybrowne's comment

Far easier to give it than to take it apparently.

March 22 2011 at 5:04 AM Report abuse +2 rate up rate down Reply

Pull your money out and mattress stuff it , Yes its easy to give advice It is earning next to no interest so , if necessary have a friend say you paid a debt you owed them . I do not feel this is "fraud" you are to the point to plan to spread your money over a long period that it may even save your life as assistance is not enough to live on . Pull the money and go into poverty mode . When my woman left me with 2 little girls (2 and 5 and support for 2 more) I had 5k for a home saved from 70+ hr work weeks , I had also had an appendix removed for free that would've wiped the 7 years it took to put it away if I had put it in a bank . If you have a child well off you can trust you could legally give to them (up to 13k no issue) and get back as necessary and be totally legit after a couple months to assistance. Will you be working again? Just some Ideas from someone who hit the skids and got back up a couple times ( I didn't give the 1st that I broke my back and was out of work 1, 1/2 years . )

March 22 2011 at 9:26 AM Report abuse +2 rate up rate down Reply