1. Buy One Get One Free
Deep down, we all know nothing is truly free. Corporations don’t offer us deals out of the goodness of their heart, they do it because it's good for business. And it would be a lie to say we don’t get excited at the sight of the words ‘Buy One Get One Free/Half Off'. It's literally the oldest trick in the book - such promotions were found in newspapers that date back to 1908. For retailers, BOGO is effective because it allows profitable liquidation of inventory that is low in demand, lacking in quality, or are close to their expiration date.
Being a critical consumer is important. If you see 'Get One Free' on detergent in the grocery store, it’s a small purchase that will most probably prove practical. But if you set out to buy a pair of sneakers and you see the second pair is half price, it’s best to stop and think. If you set out to buy one pair and you planned on spending $60 on it, is it necessary to spend $100 and end up with something you don’t actually need? Unless you encounter a BOGO deal for something which you actually intended to buy two or have an actionable use for buying double, it is generally not worth it.
2. Buying cheap is smart
This is another thing the great majority of us are guilty of. Buying cheap often feels like the responsible choice, you are saving money after all... but not always. The saying ‘buy cheap, buy twice’ has more truth to it than you might think. Cheaply made, poor quality items might save you a few dollars at that moment, but it won’t be long until you have to pay more to replace them.
You will ultimately spend less if you invest in higher quality, albeit pricier products. The only time this is not true is when buying generic brands at the grocery store. In that case, the product is usually identical to the one in the branded packaging.
3. Avoiding regular visits to the dentist
Regular check-ups and cleanings can be unpleasant for some, and an ‘annoying’ expense on top of it. But avoiding those dentist visits is a big mistake. After skipping them for a while, you are likely to end up in need of a bunch of costly fillings. If your employer doesn’t offer dental insurance or the premium is more than you’re willing to pay, there are a few solutions to the problem.
You may purchase a dental discount plan, where you pay a one-time fee each year (around $100); choose one of the dentists in the network, and all of your dental work will be discounted. Another option is asking your dentist if it’s possible to set up a payment plan or turn to your flexible savings account if you have one. In any case, paying for an office visit now will be lighter on your wallet than paying for major work later.
4. Avoiding all debt
Debt is a scary word. We know that unpaid credit card balance or high-interest loans can significantly hurt our credit score. But, sometimes a calculated risk needs to be taken to secure the future. Certain types of debt, like a mortgage or a student loan, can help you move forward in life and achieve your goals without harming your credit score in the process. The aforementioned loans usually have a much lower interest compared to personal loans or credit cards, and the interest may be tax-deductible.
While you should still try to pay your credit balance on time every month, there is no harm in keeping an open mind when looking for loan options, as long as you do your research regarding the best rates and make sure you never borrow more than you can pay back in time.
5. Depending on credit cards rather than emergency funds
Relying solely on your credit card to get you through a financial emergency is the safest way to dig yourself into a deep pit of debt. It is the exact opposite of the calculated debt we talked about before. According to Scott Credit Union, thanks to interest you will end up paying a lot more than you actually spend. In times of crisis, such as a job loss, illness, or divorce, it's best to have an emergency fund consisting of three to six months’ worth of living expenses.
6. Budgeting is only necessary when money is tight
If you are making enough money to cover your expenses, that’s great! But it does not mean you don’t need a budget. Without a realistic budget in place, you can easily lose track of how much you’re spending, and that’s true for everyone. A monthly budget will force you to think more carefully about your purchases and be more aware of where your money goes.
Knowing the true state of your finances at all times is one of the most efficient ways to actually save money. Do take some time and carve a monthly budget you can stick to.
7. "It's too late (or too early) to start a retirement saving plan"
When is the right to start investing in your retirement plan? Right now. Many older adults feel like it’s too late, while many younger people put off investing in their retirement because expenses like buying a house or having children are more pressing. If you don’t already have a plan, we strongly recommend facing the issue sooner rather than later.
Time and compounding are important factors in long term saving plans. Compounding happens as you earn interest or dividends on your investments and reinvest those earnings. Because the value of your investments is then slightly higher, it can earn even more interest, which is then packed back into the investments allowing it to grow even more.
8. Owning is always better than renting
This is one of the most widespread money myths - that renting a house rather than owning it is a ‘waste’ or ‘paying someone else’s mortgage’. In reality, when you rent a home, you avoid many non-recoupable expenses like taxes, maintenance, and repairs, insurance, and mortgage interest (separately at least, as they are calculated into the rent).
According to the Financial Consumer Agency of Canada, the first years of homeownership payments mostly go towards interest. With fluctuating values, buying a house can be a pricey proposition - one that needs to be carefully considered rather than be taken for granted as an investment strategy.