Some seemingly wise money-saving habits have been found to quietly empty people’s wallets. From buying in bulk to branded skincare products, people are easily lured by the illusion of saving money or prestige, ultimately leading to excessive consumption.
Here are some of the most surprising “money-saving” traps compiled by Gobankingrate, with financial experts exploring how to adjust lifestyle habits to achieve lasting savings.
Buying in bulk may seem logical because you can get more for less money. However, Caleb Wood-Dagget, founder of Commonwealth Strategy Advisors in California, pointed out that many people waste money in this area without realizing it.
“Buying a large quantity of the same item at a discounted price may seem good, but if half of it expires or remains unused, then you are not really saving anything,” he said. “You will slowly waste money instead of all at once.”
Melanie Musson from InsuranceProviders.com added that you cannot assume something is cheaper just because it comes in bulk packaging.
Musson advised considering unit price and comparing it with the price of smaller packages.
High-end brands promise to use premium ingredients or cutting-edge technology, but sometimes more affordable alternatives can achieve the same results.
According to Musson, “There is no magic skincare formula, as skincare products often contain many similar ingredients. If you compare a $100 cream with a $10 cream and find that their ingredients are the same, you can be sure the effects will be the same, but opting for the cheaper one will save you a lot of money.”
Opting for budget airlines may seem cost-effective, but hidden fees can add up, making it not as economical in the end.
Michele Frank, a professor at the University of Miami Business School, stated, “While budget airlines do offer lower fares, they may charge for seat selection, meals, carry-on baggage, and printing boarding passes.”
These fees can accumulate and cause travelers to lose the perceived “discount” they thought they were getting.
Frank also mentioned that budget airlines often have fewer aircraft, routes, and only fly on specific days each week. This means that if a flight is canceled, you may not be able to board another flight for several days. If this results in having to stay in a hotel for extra days, it could add hundreds of dollars to your itinerary, so considering these costs is crucial.
High-interest loans can quietly raise costs. A common trap is not being able to fully repay the loan each month, resulting in interest accruing higher than any direct benefits.
Consumer and money-saving expert Andrea Woroch suggested, “If you plan to purchase a large item but do not have enough cash, look for 0% financing offers from major stores, or find a new credit card with 0% APR and cash rewards to help pay off the debt, but make sure to repay before the 0% promotional period ends.”
Generic foods, medications, and household items are often of equal quality to branded products but at much lower prices.
Woroch explained, “For example, by sticking to generics, you can save 30% on non-prescription drug costs. The U.S. Food and Drug Administration (FDA) requires generics (including over-the-counter drugs) to have the same efficacy and safety as brand-name drugs, but at much cheaper prices.”
Having unlimited data may provide peace of mind, but if your monthly usage rarely exceeds 15GB, you may be overpaying. Mint Mobile’s report showed that 76% of Americans use unlimited data plans, but 63% of them use less than 15GB per month.
A study by WhistleOut found that the average American household wastes $1500 per year on excessive wireless data plans.
“This may be because more businesses and retailers now offer free Wi-Fi connections, so many consumers use Wi-Fi at home, at the office, or even while traveling,” said Woroch. “Check your actual data usage and see if your current provider offers a plan that meets your needs, so you won’t waste money on your monthly bill anymore.”