Frugal isn’t necessarily always the best option and in fact these frugal habits could be making you poor.
Extreme frugality can get you out of a real pickle in the short term, but there are some frugal habits that come with big potential pitfalls and can end up costing you big time.
One of these cost me thousands and it’s a mistake I won’t be making again.
These are the frugal habits that are actually losing you money and how you can avoid them to achieve the best out of frugal living.
Frugal habits to avoid
If you want to truly save money and live below your means then these are the frugal habits to steer clear of.
1. Buying cheap
One of the best frugal habits out there is to seek out the best price. But many people think that means finding the cheapest price. That is not always going to be giving you best value.
Lots of stuff is overpriced for a multitude of reasons, because you’re paying for the brand or just because the company selling is trying to cash in.
But we need to not allow that to cause us to swing too far in the other direction where we seek out the absolute rock bottom priced product, because sometimes it’s that cheap for a reason.
A good example of this can be big ticket purchases like washing machines and dishwashers. What’s the point in getting the cheapest option when it breaks down in six months.
Here’s a personal example. We had our kitchen done a couple of years ago and it looks great now. However we had a total disaster with a builder that left our house in a mess.
You see, I went with the cheap builder.
However there was a reason he was cheap. Honestly this was the most stressful experience of my life. Having paid him some money, I decided to halt it partway through because the work being done was just so awful I couldn’t face this kitchen that I had paid a huge amount of money for, being done so wrong.
He refused to refund the money I had paid him and then vanished when we gave him a quote for repair to our kitchen floor which he had damaged in the course of the works.
I had to pay someone to come in and totally undo what he did and then fit our kitchen, and then pay to get the floor replaced. We did take him to court and luckily when we won our case he did pay the full amount we had claimed. But it was stressful and ultimately we did lose money.
So in future I won’t be going down that route again. And I am now so cautious about hiring new tradesmen.
2. DIY repairs
There are some repairs and household jobs that you can do yourself.
We recently saved money by fixing an issue with our shower that meant the dial wasn’t working. I dunno what it was, my husband did all the research and work on that one, but we were better off for it and the shower now works.
However sometimes doing repairs or house renovation work yourself is costing you valuable time and energy, detracting from your quality of life and losing you money.
Always calculate your time cost and ask yourself is it really worth it. Because you may be so focused on saving money, you’re forgetting what it’s costing you in time to do this.
And indeed if you end up botching the job because you’ve been overly ambitious, you’ll have to get someone else in fix what you did.
Sometimes outsourcing is the cheaper option.
3. Side hustles that don’t pay you enough for your time
One of the most common topics around frugal living is side hustles that can boost your budget.
The trouble is so many of these side hustles can be a total waste of your time for what they are actually paying you.
For example some survey sites will only pay you pennies for an hour of your time or then there’s pyramid or MLM schemes that ultimately cost you money to invest and provide little return.
This isn’t true of all side hustles, but before you make any time commitment to anything check the return you will get, how much free time you’re expected to give and how much money you’re having to invest up front.
Check out my top side hustles (that are actually worth your time).
4. Making your own clothes
It used to be the case that making your own clothes was a great way to save money. However if you’ve seen the cost of fabric lately you’ll know that it’s not actually the cheaper option.
Some people with the skills to do it will buy clothes and then alter them to what they want, say to get the fit right or to get the custom look they’re looking for.
5. Buying cheap fashion
You end paying a premium for branded fashion not just because there’s been more attention to finer detail with the craftsmanship and usually better quality materials, but also just because of the name on the label.
However when you swing to the other end of the spectrum and go for super cheap clothes, they sometimes do not have the quality to last a long time. The fabric is cheap and doesn’t wash well or it’s easily torn. The same goes for shoes. What ends up happening is you keep having to replace shrunk, torn, bobbled clothes and over time it adds up to costing you more.
There’s a theory of socioeconomic unfairness call the Boots theory, which comes from the Discworld series by Terry Pratchett. In his novel, the main character muses on how expensive it is to be poor, saying:
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. … A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet”
I was talking to a friend about this a few weeks ago and they said their mum used to say “we’re too poor to be cheap” and I think that just really sums up what I’m trying to say here.
If you can afford to shop for better quality clothes made from fabrics that are going to survive the test of time, then try to do that wherever you can. Experts recommend you go for natural fibres. There’s a great article I found on shopping for sustainable fabrics.
6. Coupon and voucher overuse
Remember that supermarkets aren’t giving you vouchers to help you. Companies are not giving you discount codes to help you. They’re doing it to convince you to spend money.
Vouchers only save you money when you are using them on something you needed to buy anyway. If they are pushing you to buy something you had no plans to use, then you are not saving, you are just shopping.
7. Buying perishables in bulk
Buying in bulk only saves you money when you make use out of the full amount that you bought.
If you have bought meat or fruit in an offer in bulk, great. But you need a plan to use it or to store it in the freezer.
For example, making a lasagne where you’ve used double the amount of mince you needed is great, but if you don’t eat the leftovers the next day you’ve lost money.
Want more tips for saving on food? Check out my top tips for saving on groceries.
8. Saving the pennies by splashing out the pounds
If you end up spending more money and time in order to get something at a cheaper price, then you’ve cancelled out any gains you would have made.
For example, my kids go to swimming lessons. I used to have to drive 45 minute round trip to get them to and from those lessons. Then I found another option that was £10 a month more expensive, but when I worked it out I would be saving so much on fuel because this place was just 5 minute round trip.
So stay focused on the bigger picture. If you’ve driven out of your way to reach a budget supermarket or to find cheaper fuel, is the cost of getting there outweighing the savings.
9. Saving money
Hear me out on this one. Yes, saving money is a good thing. But where you save it is really important and I think because there’s a real lack of financial education for young people, a lot of us don’t seek out the best place for our money and that means we are actually losing money thanks to inflation.
If you stick money into a low interest account then as inflation causes prices to rise, this makes money less powerful over time. So a £20 note will always be worth £20, what you’re able to buy for that amount dwindles over time. You need your savings to work hard for you.
It’s kind of like with savings challenges where people are using cash which lots of TikTokers promote because it’s a very visual way to save. It’s great if you’ve found something to motivate, but if you spend a whole year hoarding money in a jar in your house, you’ve lost value on that compared to if you’d had it in a decent savings account.
Now I’m not going to tell you where to put your money, that’s going to depend on so many things. What I try to do is find the account with the best rate of interest for the money I need easy access to, and lock some away in an investment account and pension where I know the gains over time are more favourable than an easy access saver account.
10. Cash budgeting
A lot of people are using cash budgeting at the moment in order to keep them on a tight budget. And I get it, that method is so effective for staying accountable and visualising what you have.
My issue with this is that when you pay cash you are sometimes losing out on the benefits of things like credit card rewards or cashback.
There are apps which allow you to do a kind of digital version of cash envelopes, such as Hyperjar for example or your own banking app may also offer you the option to allocate funds to certain categories like groceries and treats.
11. Forgoing all joy
You won’t get rich by giving up your daily coffee. I don’t drink coffee. However I understand to some people it is VERY important.
I think this is another one where balance is important. Let’s say your daily coffee costs you £3 or $4. You’re having it five days a week, over the course of a year that’s around £780. Money worth having yes, but would trying to quit altogether mean you struggle and end up reverting to your daily coffee further down the line.
Some treats are important, because we have to enjoy our life. It’s just about finding a balance.
Can you buy one takeout coffee a week and have the others be from home?
My point with this is that when we forego all joy it kind of sucks the fun out of life, and I think that can make it hard to sustain the lifestyle. It doesn’t have to be all or nothing.
Final thoughts
Sustainable frugality is what’s going to save you real money in the long term.
Extreme frugality in the short term can yield results, like crash dieting, but ultimately as with so many other things we have to bring in a bit of judgement to get the balance right.
