Smart SpendingSmart Spending

6 money-saving ideas that are anything but

A lot of folks unwittingly -- and repeatedly -- make misguided money decisions based upon well-intentioned beliefs.

By Karen Datko Dec 10, 2010 12:37PM

This guest post comes from Len Penzo at Len Penzo dot Com.

 

The other day I was at the gas station and I observed a soccer mom topping off the tank of her bright yellow Hummer.

And when I say "topping off," I mean really topping it off. She must have squeezed that hose handle a dozen times. Each time she did, the gas pump reacted with one of those obnoxious attention-getting retorts warning her that the tank was full.
 

Thunk. Thunk, thunk, thunk. Thunk. Thunk, thunk. Thunk, thunk, thunk, thunk, thunk.

 

Oh, brother.

 

Maybe I am being a bit snooty, but I find that kind of behavior extremely annoying, not to mention just a wee bit ignorant.  Don't you?

 

I mean, come on. How much extra fuel did that happy housewife think she was putting in the neck of her gas tank anyway? I'm not a car mechanic, but I'm guessing it was less than a quarter gallon.

 

I bet she thinks all that extra fuel she stubbornly coaxed into her tank will allow her to go an extra day or two before having to come back to the service station for another fill-up of premium gasoline. Post continues after video.

In reality, all of that "look at me, look at me!" commotion will probably get her little more than a measly mile or two of extended driving range, assuming she runs her tank bone dry.

 

Now, a couple miles might prove critical if she were traversing the breadth of the Sahara Desert, but I'm fairly certain this lady lives in Southern California, where there is a gas station on every corner. Heh. Don't ya just love it?

 

The truth is, a lot of folks unwittingly -- and repeatedly -- make misguided decisions based upon well-intentioned beliefs. Here are a few examples of common money mistakes people often make in the name of saving a few bucks:

 

Going to a restaurant and ordering the "daily special." When a waiter comes up to your table and tells you all about the chef's special, don't ever assume that just because it's a "special" it comes with a special low price too. Quite often, it's the exact opposite. Sometimes the chef's special comes with a price that would ruin the appetite of even the most famished of diners.

 

Blindly sacrificing quality in favor of lower prices. There is a time and place for everything. To be sure, sometimes it makes absolutely no sense to pay extra for quality. Then again, sometimes it does. For example, it is not unreasonable to pay extra cash for high-quality clothing that can be worn many times over several years, as opposed to buying cheaper alternatives that will fall apart after only a couple of washings.

 

Buying items in bulk that are better off being bought in smaller quantities. Buying things in bulk can often result in significant money savings, but the truth is, there are also plenty of items that are usually better off being bought in smaller quantities. For example, brown rice has a short shelf life due its oil content; mayonnaise too. If an item you purchased in bulk goes bad before you can use all of it, then the odds are you probably could have saved more money by buying it in a smaller quantity.

 

Always assuming larger-sized packages are cheaper.  Nowadays, it is no longer a given that products in bigger packages are always the best buy. When trying to choose between getting the smaller- or larger-sized item, always be sure to calculate the unit price of both packages first.

 

Thinking in terms of monthly payments when getting a car loan. Car dealers love to steer price negotiations toward how much money you can afford to pay on a monthly basis. After all, when it comes to negotiating the price of a new or used car, dealers can usually work out the financing such that you can afford just about any vehicle your heart desires. By increasing the loan repayment period, dealers can offer a monthly payment to fit most any budget. Of course, the flip side to that means you will also pay more interest over the life of the loan.

Driving out of your way to save a few cents on the price of gasoline. Uh huh. Last year I did a complete analysis that conclusively shows why driving even a couple miles out of your way to save a few cents per gallon can be a losing proposition. In fact, unless the price differential is significant, you'll actually save money by buying your gasoline at a nearby station with the higher price -- regardless of whether or not you're the type who likes to top off your tank. Thunk.

 

More from Len Penzo dot Com and MSN Money:

1Comment
Dec 11, 2010 12:34PM
avatar
Topping off your gas tank like that can make your check engine light come on.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More