I take pride in living frugally on my meager earnings and looking for the upsides.
Don't Waste Your Money!
Take Care of Your Pennies, and the Pounds Will Take Care of Themselves.
The English proverb "take care of your pennies and the pounds will take care of themselves" is accurate. It may be hard to come up with $5,000 at one time, for example, but if you put your loose change into a jar every day, it wouldn't take very long to collect the funds you needed.
However, there comes a time when we wind up focusing so much on the pennies that we lose our focus on the big picture. We may be saving our pennies while the dollars are slipping out of our pockets without our noticing. We become, from time to time, "penny wise and pound foolish," according to another English proverb.
Penny-Wise and Dollar Foolish
In this article, I've listed some examples of situations where we can be penny-wise and dollar foolish. When we can recognize these types of situations where we have lost sight of the pounds while watching the pennies, we can fix them and stop wasting our money.
How Much Did Your Savings Cost You?
When you manage to snag a deal, you may have some associated costs that you are not considering to get the savings:
- Shipping and handling
- Storage costs
- Additional gas, wear and tear on your car, or transportation
- Membership or subscription fees
- Your time to process, clean, and maintain the item
I've subscribed to magazines and newspapers solely for their coupons. I then found a job that took a great deal of my time, so I wasn't able to clip the coupons. I had good intentions to clip the coupons, so I kept the subscriptions, but in the end, I had not only wasted the cost of the subscriptions but also wasted time dealing with all the paper.
When calculating the cost of an item, these factors do need to be taken into consideration. Sometimes these costs are worth the savings, but you do need to factor them in when you consider how much something costs so you can make sure that they are still providing the savings you expected.
Buying in Bulk or Volume
When we find a great deal, sometimes we may go overboard in our savings and buy too much. This isn't a problem if we are able to use the product in a reasonable amount of time and we have the space to store it. But sometimes we are not able to use it timely and wind up having to throw it away, and end up wasting money instead of saving it.
One family went to a fruit farm to pick peaches. They meant well and ate them daily, planning to freeze any extra, but by the time they realized what part was extra, the peaches were spoiled.
Sometimes when we spot a good deal, we feel like we can buy extra to use later, share it with others in the family or give it to charity. An impulse purchase to give to family or charity can be fine if you can afford it, but if you didn't plan for it, it could cost you when you don't have funds left over to pay your bills.
Haggling for Pennies and Losing the Deal
A woman was offered a job in another city, and the company agreed to pay for her moving expenses. She called to ask them whether they would pay her cash and if she would move her belongings herself. They called her back and told her they had found someone else for the job.
When we go out to dinner, I have a friend who insists on calculating everything to the penny. She doesn't want to owe anybody any money, nor does she want to pay an unfair amount. She is actually a generous person, often giving impulse gifts. What this means is that she is taking the time to do calculations when everyone is tired and just wants to get home. It also makes people feel like she doesn't trust that they aren't out to con her. By being this tight with her pennies, she is losing her relationship with her friends.
Trying to save money, many people have avoided getting health, auto, or renters insurance, only to be stuck with big bills when something goes wrong. To avoid paying too much, some drivers run away after they have hit someone. This causes them much guilt, and if they are caught, there will be legal repercussions as well as financial ones.
Time Value of Money
A woman was remodeling a house for resale. There were many different types of jobs that needed to be done. In order to do so, she tried to get three estimates for each project so she could get the best deal. This took a long time to coordinate schedules, get them all to come out and look over the project and send an estimate.
Then sometimes, a contractor would have a different idea about how to do something, and since the scope of the project changed, she felt she needed to get a changed estimate. All of this took a lot of time and significantly slowed down the progress of the work in the house, costing her more in loan interest, insurance, and utilities.
She also had less time and energy to do other things, like focus on her career.
Automatic Annual Renewals
When I choose a supplier of any product or service, such as cable, internet, gas supplier, and phone, I generally do spend the time to find the best ongoing rate. Sometimes though, at the end of the year, the contract gets renewed, either for another year or at a month-to-month rate. Since it is just a renewal, sometimes I forget to compare prices again.
The new rate is almost always significantly larger than the old rate, and the companies expect you not to do anything about it because of inertia. When I finally got around to checking rates, I found I had lost a significant amount of money over the past time period, because I hadn't bothered to check that I was getting the best price for the service.
The same thing happens when a Certificate of Deposit (CD) matures. If you don't do anything, the CD automatically renews for the same time period as the original CD. However, the rate is almost always the lowest rate you can get. You have to consider your options and make sure you are investing your money mindfully. This was something that almost happened to me, but I was able to get to the bank at the last minute before my CD was locked in for another year at an abysmal rate.
Home repair is a place where we wind up being penny wise and pound foolish. Since we don't expect our houses to break down, we don't have the money to pay for a repair and often don't know qualified people who can repair it for us. In an effort to get the best price on home maintenance, we sometimes try to do things ourselves or take a chance in hiring someone who can offer a good price
I have heard stories of people who made things worse with their do-it-yourself efforts and wound up paying more than the original project would have cost.
For one home improvement project, a contractor was willing to do the work for a low price. However, because he wasn't familiar with the job, as he said took a great deal of time to research how to do things, and when things went wrong, he didn't know how to fix them. He did two things for me at the same time, and both of the jobs were done with poor quality. Although the ceiling is patched and the bathtub has a new surround, both of them looked bad and needed to be redone.
I also had a contractor who took out the steps on my front and back porch and replaced them. He took several months because he simply didn't show up for a long time, and when he did come back, he used inferior concrete. The steps became crumbly and needed to be redone.
Both of these happened a long time ago, and since then, I have the internet and know that I can find reviews and get referrals for good contractors.
This happens most often at car dealerships. We work really hard at negotiating and trying to get the best deal on one aspect of the purchase, but the dealership makes it up somewhere else. One man negotiated the best trade-in value for his old car but wasn't able to negotiate a good price for the new car.
I negotiated the best price for my new car and then was so tired that I didn't negotiate the best interest rate for the loan. Some people get talked into buying those extra features they don't want or need, like under-body coating or stain-resistant spray. Instead of looking at the overall value, since each part is separate, we may focus on one or another and miss the big picture.
Expired Coupons and Rebate Forms
There have been times that I bought a product that was free after a rebate. This product wasn't something I would buy otherwise, but I decided to give it a try since it was free. I forgot to fill out the form, mail it in, or save the UPC before the expiration date. I also couldn't return the product since I had already opened the box and started using it. This meant that I wound up paying full price for a product I really didn't want. Since then, my rule has been to not use the product until the form has been mailed and to mail in the form the same day.
There are things that require maintenance, like regular oil changes, regular physical exams, and the annual furnace inspection, that we sometimes put off because we don't have the time or money to pay for it. It seems unnecessary when nothing seems to be going wrong. But these decisions can come back to haunt you if things go wrong.
It's on Sale!
One of the biggest money wasters is the sale, and it is something that almost all of us have fallen for it. When there is something you need and are going to buy, it is a good idea to look for sales and try to get the best price for it.
However, it is so easy to splurge on items you don't really need or hadn't thought you wanted until you found out it was on sale. If you are simply buying something because it is on sale, you are wasting money. Why save 25%, 50%, or even 75% (pennies) when you can save 100% (the whole pound) and keep all of your money?
The video on the right is an English lesson on this English idiom and provides many additional examples of how people, even governments, can be penny-wise and pound foolish.
Percentage of Savings
We tend to be blinded by the size of the savings. While we may go across town to save $20 because an item is 50% off, we may not be willing to go across town to save $40 when the item is only 5% off.
More Money From Your Job
In order to earn enough money to pay my bills as a single parent, I asked for more work and more overtime, hoping I would also get a raise or a promotion. I also looked for another part-time job, even though it took even more time away from my baby, and I had to pay a babysitter. I then found out that other people around me, particularly the men, were following a different route to get the money.
They simply asked for a salary increase or a promotion. Instead of getting an extra hour's worth of pay, they were increasing their pay for the entire 40 hours they were working and not having to give up any time. There have been studies that show that men and women approach salaries differently.
Saving Money on Fast Food
As a single parent, working two jobs and going to school, I didn't have enough time to cook a lot of food, so I had to eat out. Since I didn't have a lot of cash, the cheapest meal at the closest fast-food restaurant became my lunch of choice. My health suffered because of it, and now I have to break bad habits, exercise more, lose weight, and take medication to make up for the way I treated my body when I was younger.
Saving Pennies and Letting the Dollars Trickle Away
It is easy to lose sight of the dollars while we try to pinch our pennies. After all, there are more important things than money, and we have other things to do with our lives. We're busy, so we should forgive ourselves for losing track now and then. But we can wind up costing ourselves so much more when we are desperately trying to save money.
It is helpful to consider our big-picture situation from time to time to make sure we aren't falling in these financial traps.
Questions & Answers
Question: Is it better to save for emergency cash, or use extra money to pay off high interest credit cards?
Answer: Since you have credit cards that can be used for an emergency, I would recommend paying off the high-interest credit cards. You will have a balance available for emergencies and reduce the amount of interest you are accruing. I would also recommend limiting new purchases on the credit cards to make sure you have a balance available for emergencies.
© 2014 Shasta Matova
How have you been Penny Wise and Dollar Foolish?
Bhattuc on August 11, 2020:
Well presented. Good one.
Tamara Wilhite from Fort Worth, Texas on May 23, 2015:
One of the penny wise and pound foolish things I tried was a too-low grocery budget. But after a few weeks of rice, beans and other ultra-cheap foods, I found we were eating out more because I didn't want to eat what we had on hand.
Shasta Matova (author) from USA on January 21, 2015:
Thanks peachpurple. I really like using coupons and vouchers too. We do have to be careful when using them that we aren't buying things that we wouldn't or shouldn't be buying, and do need to pay attention to how much time these coupons are costing us. I like to take the savings and add it up. Instead of spending it throughout the year, I like to do something special with it to reward myself. This means a big purchase, a big outing, or paying down a loan.
Cathleena Beams from Tennessee on January 01, 2015:
As many women do I love a bargain. At times I've purchased items I wouldn't normally buy and really don't even need because I have a coupon or they're on sale. After Christmas I'm loading my cart full of bargains 50%, 66%, or 70% off depending on which store I'm in. This year it was the Dollar Store, Michaels, and Hobby Lobby. I found myself going back and forth from isle to isle picking up something, finding something else, trying to decide what to get and what to put back. Don't want to spend too much. I've already blown the budget prior to Christmas, but the good deals are just too good to pass up. Things for next year that I will package up and may or may not remember I bought 12 months from now. Yes - Sometimes penny wise is pound foolish, and usually so.
peachy from Home Sweet Home on December 26, 2014:
i always use coupons and vouchers to save those extra cents or dollars, can't be seen but virtually I am saving
Judy Filarecki from SW Arizona and Northern New York on November 02, 2014:
Enjoyed your hue. I was happy as I read that most of the things you point out I do to save pennies and dollars. It was a good reminder though, because I know I slip up periodically and get a little lax.
Shasta Matova (author) from USA on September 17, 2014:
Thank you for providing another great example of wasting money by being frugal. You're right, they cost the same when she double bags hers.
Jen withFlash on September 16, 2014:
My mom and I have an ongoing argument about garbage bags. She only pays $3.00 for bags and insists I'm wasting money on the $6.00 box that I buy. They both have 40 bags in them but she always has to double the bags because otherwise they break whereas mine don't. Doesn't that mean we're both actually spending the same amount of money? She just doesn't get it. LOL!!!
Tamara Wilhite from Fort Worth, Texas on June 15, 2014:
We've made the mistake of deferring car maintenance, the grinding near a wheel which was a 200-300 repair if repaired early became a thousand dollar repair because the bearing damage affected, I believe, a CV joint when it got too bad.
Shasta Matova (author) from USA on June 01, 2014:
Thanks Vellur. Focusing too much on the pennies does make us lose the big picture and sometimes the pounds slip away.
Thanks for your comment SandCastles, I do feel better about that situation. I do feel that I was better off in the long run not taking that job.
Thanks Roberta. Unfortunately there are so many financial tricks and traps...
Shasta Matova (author) from USA on June 01, 2014:
Thanks for your additional insight ChitrangadaSharan. We do eat out more often nowadays without knowing exactly what is in our food.
G-Day LeonJane. Thanks for letting me know of my error. I have corrected it.
Thanks Dianna. Even though it is embarrassing to call out the examples of wasting money while trying to save, I do hope that it helps someone avoid these.
Suzie from Carson City on May 31, 2014:
Shasta....Congratulations on your HOTD. I'd have to say that the majority of your work is award-worthy.
What you have presented here is all very accurate and sensible. I do not know anyone at this point and time who can ignore financial wisdom and vigilance.
If we are not alert at all times in money matters (the PENNIES too) we have chosen to be irresponsible.
Thanks for an important reminder....UP+++
Anna Marie Bowman from Florida on May 31, 2014:
Some great advice!! I have streamlined my shopping, so that I only go to two different stores. I know I could save a few dollars by driving around a bit more, but it ends up evening out when I figure in time and gas. It used to take half the day to do the grocery shopping, and it was a pain. Now, I go to two stores, both right around the corner, and it takes about an hour. I can't imagine how much money I wasted driving around, trying to save a few dollars.
LT Wright from California on May 30, 2014:
Dollar stores can be money wasters because I go there to pick up one or two things but everything is so cheap, it's easy to spend more than I would have done somewhere else.
Audrey Hunt from Pahrump NV on May 30, 2014:
I've been much more careful lately with this subject than I used to be. You've shared some very good tips. Your hub deserves to be HOTD!
LisaKeating on May 29, 2014:
Congrats on HOTD. Your ideas were well thought out and supported by relevant examples. Like most people, I am guilty of doing some of the things you have listed her and more. Thanks for the reminder to be more mindful of how we spend out time and money.
mariexotoni on May 29, 2014:
Great tips! Congrats on the HOTD!
Rozalyn Winters on May 29, 2014:
This is excellent. Thanks for sharing the tips. :-)
Rebecca Mealey from Northeastern Georgia, USA on May 29, 2014:
Very good advice. I am so guilty of the "because it was on sale" purchases. Thanks for putting this together. Great job, and congrats!
Jimmy Gent from California on May 29, 2014:
All great tips to pitch pennies and grow personal savings. Gas is definitely an expense to worry about as is the increase in cost of food and other general living expenses.
Liz Elias from Oakley, CA on May 29, 2014:
Great examples well explained. I'm pretty careful most of the time--I have no choice--we're retired, on a fixed income and my husband is disabled. There is no money for extras. Sales? I ignore them, because for the most part they are just what the stores call "loss leaders," meant to get you in the door, with the expectation that you will buy a few (or a lot) of other things as well, which may, in fact, be marked UP to offset the sale prices.
I have never bought into the coupon thing--for my money, the house brand is still less expensive, even after the cents-off from a coupon. Only if I have a coupon for something that is FREE--AT THE TIME OF PURCHASE, will I use a coupon. I don't do mail-in rebates. And nowadays, those so-called "cash back rebates" are more and more often in the form of a gift card that cannot be exchanged for cash, so you are forced to spend that money anyway, instead of putting it back in your pocket.
The last time we bought a car, it was an outright purchase, no trade-in. But, we told the salesman up front, "This is what we want to pay--out the door--taxes and license included. We don't want to haggle back and forth with you as a third party liaison with your manager. If you are not authorized to make the deal, we want to deal directly with whomever IS authorized."
Voted up, interesting and useful.
Kalpana Iyer from India on May 29, 2014:
I really liked this line - "Why save 25%, 50% or even 75% (pennies) when you can save 100% (the whole pound) and keep all of your money." :) Made me smile. A very interesting hub. Congrats on getting HOTD. Very well deserved!
moonlake from America on May 29, 2014:
Congrats on Hub Of The Day. I have made the mistakes with coupons buying things I don't need because I have a coupon. When I'm buying a small appliance I don't buy those little appliance insurance because I think they are a waste of money. I will not pay shipping I will wait until the store has free shipping or I don't buy from that company. I also look for free shipping coupons online.
Great hub full of information. Voted up.
Mary Hyatt from Florida on May 29, 2014:
Well deserved HOTD! There was a time in my life when I had more money to spend than I do now, so I made many mistakes. I now have to live frugally, and watch every penny cause I have to!
Sales no longer tempt me; I buy only what I need, not those things I want.
Thelma Alberts from Germany on May 29, 2014:
Congrats on the HOTD! A very wise, useful and informative hub. I usually take care of the cents and the euros itself by spending wisely. Thanks for the share.
Victoria Lynn from Arkansas, USA on May 29, 2014:
These are great tips. I live pretty frugally but sometimes mess up with not returning something in time to get the refund or with buying in bulk and then letting food spoil. Not good. I'm trying to be more careful.
Congrats on HOTD!!! Way to go!
RTalloni on May 29, 2014:
Congratulations on a thought-filled post that deserves its Hub of the Day award and contains useful information! Watching out for financial tricks and traps is important. Examining our thinking is a good thing…
SandCastles on May 29, 2014:
With regards to the job example:
A woman was offered a job in another city and the company agreed to pay for her moving expenses. She called to ask them whether they would pay her cash and she would move her belongings herself. They called her back and told her they had found someone else for the job.
If the company is that fickle, they didn't really value the person anyway and they did her a favour by hiring someone else. All she did was ask a question. They did offer to pay for her moving expenses and all she did was ask how they were going to do it. Would they pay her upfront of would she be reimbursed basically. That wasn't an example of haggling. That was an example of clarifying.
Nithya Venkat from Dubai on May 29, 2014:
Congratulations on your HOD. Great write and yes we miss the picture and end up spending more money, great examples showcased.
LeonJane from Australia on May 29, 2014:
G'day, great hub with some unique and clever ideas that haven't really been described in depth before. You draw from your life experiences and it reflects in your invaluable writing. I like your style and layout however I noticed in the first paragraph that you seem to have used the expression "at one time" twice in the one sentence. Hope you don't mind the critic. Great work though!
Chitrangada Sharan from New Delhi, India on May 29, 2014:
Nice article and you made some valuable points here.
Most of us get trapped in the Sale attraction and instead of buying what we really wanted to buy, end up buying things we do not require. This obviously is a wastage of money.
There is a tendency or a practice to eat out more often these days, even if you have time to cook. Ready to cook foods are in fashion. All this leads to overspending. Remember the famous saying, A penny saved is a penny earned.
Very nice and useful thoughts expressed by you and congrats for HOTD!
Shasta Matova (author) from USA on April 13, 2014:
Thanks Crystal. You're right, 100% savings is much better than 5% or even 50%.
Crystal Tatum from Georgia on March 26, 2014:
Good tips here. It is wise to make sure we are really saving before making a purchase. I have also fallen into the trap of trying a product just because it was on sale that I otherwise wouldn't have bought. I could have spent no money at all versus saving money!
Dianna Mendez on March 17, 2014:
I have to admit in the past I made some foolish mistakes in spending money. Now, I am very frugal and live a simple lifestyle. I am much happier. Your post is full of great advice.
Shasta Matova (author) from USA on March 12, 2014:
Thanks caretakerray. Don't feel bad, I think we have all been guilty of wasting money while trying to be thrifty, but we can certainly learn from our mistakes.
Shasta Matova (author) from USA on March 10, 2014:
Thanks Shelley. I tend to learn from my mistakes the hard way. Fortunately, it is almost never too late. Once I started asking for raises and promotions, my career skyrocketed.
Thanks Jeannie, I love using coupons, rebates, and free samples, but it is tempting to buy more than is needed. Definitely have to do the calculation to make sure that coupon is really saving you money.
Thanks Karen. You do have to be careful using coupons. You're smart to go back and complain to Canon when their product doesn't work as expected. Keep trying, but don't stress over it - it isn't worth the risk to your health and well being.
Oops twoseven, you weren't supposed to notice! After I published this, I was thinking about going back and making more anonymous the situations I had personally encountered. We all make money mistakes, and I guess the key is to learn from them.
twoseven from Madison, Wisconsin on March 10, 2014:
Uh oh, it's as if you were studying my life and then writing this hub!! I've definitely been trying to be aware of some of these (especially related to home improvement - finally got a new furnace before our 19 year old one caused some serious damage to our whole house!) but some of the others you brought to light for me. Thank you - I think this is incredibly valuable information.
Karen A Szklany from New England on March 08, 2014:
I agree that it is important to keep sight of both the trees and the forest in order to keep myself in good shape financially.
I usually don't clip coupons anymore because they'd require me to buy more of a product than I really want or need in order enjoy the savings. So I buy the store brand. One of the only things I splurge on is buying organic milk for my daughter, since it has less of the hormones and other bad additions that are in other milks.
Still working on Canon to replace the printer I have that no longer works. Stopped working at 2 years and the customer service rep said that this was as much as I should expect and that I could get a discount for a new one as a "loyal customer" reward. I haven't called them enough to haggle, but I really think they should replace it, and I shouldn't have to pay for a new one that did not last very long.
Jeannie Marie from Baltimore, MD on March 08, 2014:
This is really useful information. I have been known to get caught up with coupons or sales, only to realize I did not need the product anyway or it would have been cheaper paying full price elsewhere.
FlourishAnyway from USA on March 07, 2014:
Great examples here. Loved your list. Men and women do often approach salary negotiation differently.