Being Cheap Can Be More Expensive in the Long Run

Two for the price of one is only a good deal if you needed one in the first place. All too often we fall for propositions that look advantageous, but in reality turn out to be a false economy. Let's take a look at some of the ways being cheap can be more expensive in the long run.

Lying to an Insurance Company

This is a huge one. A lot of people try gaming their insurance carriers with erroneous information. As an example, some customers tell car insurance companies they live in a different Zip Code to qualify for a discount.

This often goes well, until a claim is filed and the investigator determines where they actually live. At that point, the claim is denied, the policy is cancelled, all of the premiums they've paid up to that point are forfeited and they could be charged with insurance fraud.

Putting Off Maintenance

Does your maintenance schedule say it's time for an oil change?

Yeah, but it can wait a bit longer.

The furnace is making a weird noise, but it's still working and we can live with the noise.

Sound familiar?

Well, any time a mechanical device makes a weird noise, or begins functioning erratically, trouble is afoot. Further, the sooner you address it, the less expensive doing so will usually be. In other words, you're actually setting yourself up for a higher repair bill in the future when you think you're saving money by skipping on maintenance.

The repair might be isolated to a single component if it's caught early. But the problem could go on to affect other parts - making the repair cost even higher - if it's allowed to go on for a while.

Shopping on Price Alone - Ignoring Quality

You tend to get what you pay for with manufactured goods. With that in mind, if you had an opportunity to buy a brand-new sofa for $400 or a good clean used one for the same price, which one would you buy?

Given the theme of this article, you've probably already guessed the good clean used one is likely the better buy - but do you know why?

It could be of higher quality and have retailed for $2,000 or more when it was new. Meanwhile, a brand new $400 sofa is likely to be less well constructed, comprised of inferior materials and less comfortable in comparison - all of which means you'll replace it sooner.

Keep making the same mistake and you'll be shelling out another $400 every couple of years. Meanwhile, that good clean used sofa will still be holding up because it was a superior product in the first place.

Buying Things Just Because They're Discounted

As we mentioned at the top of this piece, "two for the price of one" is only a good deal if you need one in the first place. Buying stuff just because it's discounted can be a colossal waste of money.

If you're prone to combing sites like Groupon, Living Social or Goldstar and making purchases because deals look too good to pass up, be certain you're buying something you'll actually use. A merchant we consulted who advertises on sites like those said a good fifty percent of the people who buy her discounted offers never redeem them.

In other words, they hand her free money.

Charging Things to Get a Perk

Putting a purchase on your credit card can be advantageous if you have rewards points or some other perk for which you qualify. However, you must also pay that purchase off before the billing cycle's grace period ends and interest charges are applied to the transaction.

Otherwise, you'll pay far more for the item.

If you've fallen into this habit and your credit history is suffering because of doing so, consulting a debt professional to find a workable turnaround strategy can be a smart play. However, you must be careful to do some research to ensure you're talking to a legit debt relief company.

False Economies Create Real Problems

These are just a few of the ways being cheap can be more expensive in the long run. Long story short, it's always a good idea to take the long view - rather than focusing on the here and now - when it comes to your finances.