15 February 2018

3 Things That Sound Thrifty (But Aren't)

In the effort to make life as cost-effective as possible, many of us find ourselves turning to a more thrifty lifestyle. As beneficial as this can be, such a lifestyle is undoubtedly complicated by the fact that there’s no clear way of doing it. Every family has to learn to be thrifty in a way that works for them. When a lifestyle is so open to interpretation, it often means that many families make a few mistakes along the way.

If you’re truly committed to changing the way you live and embracing a thrifty life, then you have to be careful to avoid the pitfalls-- the biggest of which can be falling into traps of thinking something is thrifty, when it’s actually the opposite. Here are a few examples…

Paying Insurance Monthly-- 

Paying your insurance premiums on a monthly basis seems to be a surefire way to keep things as structured as possible-- and financial structure is key to achieving a truly thrifty life. When you pay your premiums on a monthly basis, you are constantly able to budget for them, and you don’t pay in advance for a service you might soon find you don’t need.

The downside of this strategy is that paying for insurance on a monthly basis comes at a premium, and sometimes that premium is as high as 25% when compared to paying on an annual basis. Always read the terms and conditions of the price difference between monthly and annual prices before you commit to a payment structure.

Ditching the TV Package-- 

It seems barely a week can pass without another company announcing a TV streaming service. When you can just buy subscription packages for the channels you want to watch, why not go ahead and do that, ditching your TV package as a result?

Well, chances are you’re not saving money-- you’re just splitting the payments. The idea of signing up to a streaming service for $10 per month is tempting; sounds like a great deal, so you go ahead. Then there’s another streaming service; that’s another $10, but that’s still a great deal…

The fact that these payments are compartmentalized means you don’t view them in the same way as you would a package from a TV company. For Optimum customers, they know exactly what they are paying and what they are getting every month-- but you can quickly lose track of $5.99 here or $11.99 there. If you’re signed up to more than three streaming channels, chances are you’d be better off with standard TV service.

Repairing Your Home Yourself-- 

There’s an area of your home that needs fixing. You call a professional and ask for their opinion; their subsequent quote is so high, you know it’ll blow your budget for a month. So, armed with a YouTube video and a derring-do spirit, you decide you’ll do the work yourself.

Not only can this be a dangerous decision in terms of your physical health and the soundness of your house, but it’s also a bad financial decision. If you make a mistake -- which you are likely to, especially with complex tasks -- then it’s likely going to cost more to put right than the initial fix would have cost in the first place.

In Conclusion...

Living a thrifty life is always beneficial, but you have to be careful to avoid errors that will actually cost you money. Beware the expensive choice in thrifty clothing, and you won’t go far wrong.