Don’t believe these 8 myths about frugal living (they actually cost you more)
If you live a frugal lifestyle but can’t seem to save any extra money, it’s time to take a closer look at these supposedly “frugal” strategies. In other words, being stingy can cost you dearly over time.
Attention: Average monthly expenses by age: Which group spends the most?
Find out: How to become a real estate investor for just $1,000 with this Bezos-backed startup
“When it comes to frugal living tips, I’ve learned that some tips are exaggerated to the point that they’re nothing more than myths that sound good but aren’t practical,” said Mafe Aclado, financial expert and CEO of Coupon Snake.
Here are some myths about frugal living that experts say cost more.
Earning passive income doesn’t have to be difficult. You can start this week.
Myth: There are no limits to DIY possibilities
“You shouldn’t believe this myth because living frugally doesn’t mean doing everything yourself. It’s about finding the most cost-effective solution,” Aclado said. “And the truth is that sometimes the most cost-effective solution is to hire a tradesman instead of doing it yourself.”
She said one of the flaws with this money-saving tip and the reason it will cost you more is because of your limited skills. And that’s true even after watching a few videos on YouTube designed to help you figure out the best way to approach a home improvement project.
“If you’re not an expert, you can never get the same result that an expert would get if you do it yourself,” Aclado said. “So if you do it yourself, it’s not only going to cost you more time because you’re inexperienced, it’s going to cost you more money because there’s a good chance your DIY will cause further complications.”
Learn more: 6 things the middle class should sell to build their savings
Myth: Convenience should be at the bottom of your financial priorities
According to Aclado, one of the main reasons why this myth of frugal living doesn’t work for anyone, but on the contrary costs money, is the lack of balance.
“Paying for amenities should not be your least financial priority. Because while you may be able to save more initially, you run the risk of quickly burning out because this lifestyle is hardly sustainable as it limits your chances of life satisfaction and fulfillment,” Aclado said.
Myth: The cheapest item is the most economical choice
“One of the most popular but untrue myths about frugal living is that cheap means frugal,” Aclado said. “Frugal living is not a lifestyle you are forced into because you are poor and cannot afford high-quality, long-lasting things, but a decision to prioritize utility, quality, durability and longevity over trendy things.”
Not only is this wrong, but this attitude often ends up costing you more over time. For example, if you buy a low-quality product that you end up having to replace often. Finding ways to save money is the best way to maintain a frugal lifestyle.
Myth: Short-term savings should take priority over long-term growth
Forgoing professional asset management to save fees may seem smart, but it often means missing out on opportunities for higher returns.
“Some people think frugality means cutting costs at every opportunity, but in the investment world, that attitude can be costly,” says Peter Murphy Lewis, financial expert and head of growth at WebStreet. “The irony? Saving a few dollars today can cost you thousands of dollars in lost growth tomorrow.”
Myth: When investing, cheap is best
“Opting for the cheapest stocks or funds may seem frugal, but it’s a classic case of ‘you get what you pay for,'” Lewis said. “Remember that the cheapest route often comes with the highest hidden costs.”
When investing, quality matters. If you choose the lowest-cost option without considering potential growth, your portfolio will underperform.
Myth: There is no need to spend money on professional advice
“Another common mistake is avoiding financial advisors to save on fees, believing that investing yourself is the most economical option,” Lewis said.
But without expert advice, investors can make costly investment mistakes or miss out on tailored strategies that could improve their portfolio’s performance, costing them more in the long run.
Myth: You should stick to simple investments
According to Lewis, frugality sometimes leads people to oversimplify their investment portfolios and avoid diversification in order to reduce costs.
“What they don’t realize is that this lack of diversification increases risk and a bad market performance can wipe out your savings,” Lewis said. “A well-diversified portfolio is not only smart – it’s essential for long-term security.”
Myth: You must save before you invest
“Some people think that living frugally means building up savings before jumping into investing,” Lewis said. “But here’s the catch: Every year you wait to invest in a year of compound interest growth, you’re missing out.”
He said the “I’ll invest later” mentality is one of the most expensive mistakes. While these mistakes may seem like good money-saving strategies, they often cost you more in the long run.
“Smart investing is about finding the right balance – being frugal where it counts, but not at the expense of your financial future,” Lewis said.
More from GOBankingRates
This article originally appeared on GOBankingRates.com: Don’t Believe These 8 Myths About Frugal Living (They Actually Cost You More)
