When it comes to the economy, it seems the headlines get scarier every day. Which has many Americans looking for new ways to cut expenses and add to savings. But trimming some expenses may save some now but cost more later.
It seems these days there are only two types of people: those out of work and those who are afraid they might be. And that leads to people putting off purchases and searching for more ways to spend less. A penny saved, is, after all, a penny earned.
But there’s another expression that also applies: “Penny wise and pound foolish.” Cutting some things may save you now but cost you later.
Example? Your car. Skipping oil changes might save you 30 bucks today, but a seized engine could cost you $5,000 down the road. Something you might cut back on? Tune-ups. If your car is running well, it’s probably ok.
When it comes to car insurance, don’t cut your liability. But if your car is only worth a few hundred dollars, you might consider dropping collision. Weigh the cost/benefit.
And your health: many people are tempted to skip or cut doses in half to prolong prescriptions. Bad idea… even if you’re feeling fine. Good idea? Ask your doctor about generic substitutes or free samples.
And finally your home. Even if the value of your home is falling, the cost to rebuild it isn’t: don’t lower your coverage. Do however, look into raising your deductible. Going from $250 to $1,000 can save 15% or more.
Bottom line? Once you get started cutting expenses, sometimes it’s hard to stop. And there are plenty of ways to save on your car, your health and home. Just don’t be penny-wise and pound foolish.