Yahoo Finance 8 Ways Your Cheap Habits Are Holding You Back Financially
As most financial experts will tell you, finding ways to cut costs and save money is a solid way to start building long-term financial stability and wealth. But there’s a difference between living frugally and living cheaply.
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Frugality means being smart with your money and refraining from spending it on things you don’t really need or want. It means making conscious decisions about your finances for the betterment of your future.
Living cheaply often means neglecting the important things in life in the interest of saving just a few more dollars. Sometimes, it means letting others foot the bill so you don’t have to.
Whatever the case, these cheap habits could be holding you back in ways you never expected.
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Not Tipping at Restaurants Could Hurt Your Reputation or Relationships
If you refuse to tip at restaurants, or if you give the lowest possible tip, you’re not only living cheaply, but you’re potentially hurting others.
“Some may see [not tipping] as a smart money-saving move, but it’s important to recognize that tipping is not just a custom, it’s a significant source of income for those working in the service industry,” said Ashley Vincent, finance expert and owner of Home Investors.
Being excessively frugal, or cheap, when it comes to tipping can also reflect poorly on your character, Vincent said. In some cases, the habit might even strain your personal relationships or make it harder for you to access quality services in the future.
If you can’t tip, reconsider your decision to dine out. Or cut back on going out so you can tip appropriately when you do.
Find: 6 Old-Fashioned Frugal Living Tips That Still Work (And Can Save You Big Money)
Overreliance on Freebies Won’t Build Financial Stability
While grabbing a free sample at Costco or your local grocery store isn’t a bad thing, there’s such a thing as overreliance.
“Free stuff may seem like a great way to save money, but it is important to remember that nothing is truly free,” said Christopher William, a CPA and the founder of Balanced News Summary.
Along with this, this habit isn’t likely to help you build financial stability. A few free samples do not a meal make.
Letting Others Pay for You Could Impede Your Relationships or Financial Independence
If a friend offers to pay for your meal or ticket, it’s fine to say yes every once in a while. But if you intentionally try to avoid paying for things and make others foot the bill for you, you could be causing awkward situations or straining your relationships.
“The problem with being the cheap guy is that while you might save some cash up front, you pay in other ways,” said Nathan Jacobs, senior researcher at The Money Mongers. “You risk looking bad socially or hurting feelings. It’s not just about the wallet but how you treat people.”
If you’re not careful, you also could hurt yourself when it comes to future networking or career opportunities. This is especially the case when it comes to building relationships or a good reputation with someone who could potentially help you in the future.
Not only that but, if you rely too much on others, you could be limiting your own financial independence.
The next time you have the choice between paying for something and getting someone else to do it for you, try to look at the bigger picture. Ask whether what you’re doing is fair or right, rather than how much money it’ll save you.
Sacrificing Quality Could Lead to More Long-Term Costs
Buying generic or off-brand items can be a great way to save money. But if you’re just looking for the lowest price tag without considering quality, you run the risk of having to buy the same item multiple times — which could lead to a hefty overall price tag.
Skipping Car or Home Maintenance Could Mean Future Expenses
If you own a home or vehicle but refuse to pay for basic maintenance or repairs, you’re inviting future financial difficulties into your life.
“Routine maintenance keeps vehicles running safely and maximizes their lifespan,” said Alec Kellzi, a CPA at IRS Extension Online. “Skipping maintenance leads to bigger costs down the road.”
The same goes for your home.
“Performing basic maintenance and upgrades maintains functionality and extends the lifespan of your home,” Kellzi said.
On the other hand, not addressing known issues such as leaky roofs or peeling paint could cost you more money down the road.
Avoiding Professional Development Can Hurt Your Future Prospects
Many professional development courses and training opportunities cost money, but they’re often worth the cost. This is especially true when they lead to future career prospects that you might not have had otherwise.
“You may think you’re saving money by not investing in books, courses and workshops,” said Tracy Cauley, CFA at VEM Medical.
However, you also could be hurting your future finances.
Cauley said, “Investing in learning and personal growth can lead to higher earning potential and greater life satisfaction.”
Always Trying To Score the Best Deals Can Be a Waste of Time
You’ve probably heard the phrase, “Time is money.” While that’s not entirely accurate, there is some truth to it.
If you’re spending hours trying to find the best deals or lowest prices, you could be wasting both time and effort — just to save a few dollars. It doesn’t hurt to do some price comparisons or couponing. Just make sure the time investment is worth it.
“Think about how valuable your time is,” said Melissa Terry, CFA at VEM Tooling. “Spending hours trying to get free stuff doesn’t mean you’re [using] it on something meaningful or productive. It’s not about saving money. It’s about being smart about your resources.”
Neglecting Your Health Can Lead to Expensive Medical Debt
Health insurance can be expensive, but even a basic plan could save you thousands or tens of thousands of dollars if you suddenly need to go to the hospital.
The same goes for healthy food. If you purchase cheap food without considering the nutritional value, you could end up facing expensive health issues later.
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This article originally appeared on GOBankingRates.com: 8 Ways Your Cheap Habits Are Holding You Back Financially
