While living paycheck to paycheck, you just can’t afford to be ‘penny wise, pound foolish’ or vice versa. On your quest to being debt-free, you have to focus on your pennies, the Tiny Giants but can’t afford to lose focus on the big picture. In other words, you can’t be saving and picking up pennies while dollar bills are falling out of your pockets. Here’s how Chomiji broke it down very plainly:

Penny wise and pound foolish” can be used to describe a person who is “very careful or mean with small amounts of money, yet wasteful and extravagant with large sums.” However, this actually misses what seems to me to be one of the most important points of the expression: when someone is penny wise, pound foolish, he refuses to spend money that will, in the long run, save him a greater amount.

Below are some examples of ‘penny wise, pound foolish’ behaviors and general tips on how to avoid them. Identify the items you’re guilty of and start to fix them ASAP before it’s too late because ‘a stitch in time saves nine.”

Food & Shopping Food Pound Foolish:

  1. Obeying Cosco’s Bulk Law – Costco is known for their amazing bargain when you buy in bulk. But what’s the point of buying perishables like tomatoes, spinach, fruits, yogurt, milk, etc in bulk only to trash 50%-75% of it? It’s wiser to pay $4 for a small container of yogurt that you can finish within a week than to spend $6 on an extra-large container and share half of it with your trash can.
  2. Buying Cheap Toilet Paper – Why buy the cheapest toilet paper available and end up using a lot more than you would otherwise and risking your buttocks become afraid of toilet paper from all the scars. Why not spend $15 on 12 Charmin Ultra Soft mega rolls that’s not only soft and in love with your bottom, but is as effective as 48 regular rolls? It is also just as bad to buy $4 trash bags that you have to double up every time rather than spending an extra dollar or two on trash bags that can hold a person!
  3. Eating Questionable Food – Eating questionable food and using questionable ingredients in your home to save $3 could be a terrible mistake once the food poisoning kicks in. If you’re not sure what the story is on your eggs, butter, juice, etc, don’t use it. Simply throw it away. I understand that it sucks, especially when you are pinching pennies, however, you could end up paying a lot more in medicine and medical bills while missing a day or two of work.
  4. Having a Low Grocery Budget – Frugality is important, however, it makes no sense to have a grocery budget that only allows for just rice, beans, roman noodles and canned meat. Not only is this costly for your health, you’ll quickly find yourself eating out a lot more because your mouth and stomach revolting after 10 straight meals of rice, beans and canned goods combo.
  5. Avoiding Fruits & Vegetables – The extreme opposite of buying too much fruits, vegetables and perishables is buying zero because they spoil quickly and may go to waste. Once again, you must treat your health as the most important piece of your financial journey. Any interruption to your health will not only increase your debt but will halt your debt-free journey. If you must, spend $30 -$80 on a decent smoothie maker and you’ll never waste fruits and vegetables again. Once your fruits and vegetables start to misbehave, either blend them and then freeze them for an amazing smoothie experience, or freeze them first and then blend them whenever you’re in the mood for a smoothie (Add a smoothie supplement for best results!)
  6. Buying Soda – In order to save a few bucks, you avoid healthy drinks and instead, load up on bloated drinks that are nothing but sugar water that’ll only hasten your diabetes timeline and potentially cost you thousands in medical costs down the road which is also counterproductive to a debt-free journey.
  7. Killing Yourself Slowly – Buying the cheapest vacuum cleaner instead of a good vacuum with a HEPA filter and suffering with the misery and expense of a year-round allergy to dust mites. This easily applies and extends to other appliances as well (fridge, washer and dryer, stoves/ranges, air-conditioners, etc.) It’s okay to do your homework and spend as little as possible, however, DO NOT compromise your health in the process. That’s ‘penny wise, pound foolish.’
  8. Miscalculating Shopping Deals – Snagging a great deal only to pay back the entire value in shipping and handling is just unacceptable. DON’T! If a purse is originally $100 and is now being advertised at 25% off with $29.99 in shipping and handling, why would you even think about it? You’ll only end up paying an additional $4.99 for an item you didn’t need in the first place. In fact, why are you even buying another purse or clothes or pair of shoes? Why save 25%, 50% or even 75% when you can save 100% and keep all your money? Go back to your closet and fall in love again with one of the 300 purses, shoes, and clothes already in your collection and put that money to better use – paying off credit cards and loans.

Car Maintenance and Insurance Pound Foolish:

  1. Avoiding Routine Car Maintenance – Not taking your car in for regular maintenance (including tires) and then having a car wreck due to poor tires/breaks or having your engine flip you the middle finger in another prime definition. Don’t save $200 a year on oil changes and routine car maintenance and end up paying 10 times that in repair costs down the line. There are just too many horror stories out there for you to continue this trend. Research how much a new car engine costs before deciding to skip your next car checkup or ignore that ‘check engine’ light. And when it’s time to change your batteries, don’t ignore reputable batteries and pay $60 for a knockoff to save $40. The wrong battery could easily fry the delicate electrical system of your car and discombobulate your speedometer, tachometer, fuel lights, and seat belt warning signs. You’ll end up paying around $3,000 in repair cost…all to save $40. And if you have a newer car that you’re planning to resale someday, invest on car wash and wax or you’ll end up losing thousands in resale value.
  2. Cheating Your Car Insurance – I am not against buying new cars especially if you planned properly for it. However, don’t buy a new car and then try and save money by getting the cheapest insurance allowed. And if you’re buying a used car, I beg you, be extremely careful and make sure you do ALL your homework (which includes paying for an expert to run full diagnostics.) There’s nothing worse than using your hard-earned savings to buy an older used car only to require loans and credit card debt for parts and repair costs.
  3. Cheating Your Gas Tank Stop fooling yourself. You don’t know your car as well as you thinks. You must stop buying $5 gas at a time and allowing your car to go all the way to empty before scrambling to add another $5. And if you have a premium car, please buy premium gas. Don’t spend all your money on a premium car and then use regular gas on it because gas is $3 a gallon and you can’t afford to pay an extra 10 cent. You’ll end up paying $1500 for a valve job…And stop driving 5 miles out of the way to save two cents per gallon…it’s embarrassingly wasteful.
  4. Playing Pokemon Go While Driving

Health and Hygiene Pound Foolish:

  1. Ignoring Routine Doctor’s Checkups – Despite the cost of living, living will always be the most popular thing in the world…and the quality of life you’re able to live is heavily dependent on your health. As I mentioned earlier, any interruption to your health will only add to your debt and halt the progress of your financial journey. The best thing you could potentially do for yourself is to find an affordable healthcare plan…pun intended. Because out-of-pocket expenses will easily bury you so deep that you’ll never recover without a miracle and a Powerball lottery win!
  2. Having Poor Hygiene – And speaking of health, you must take care of yourself…outside of eating well, exercising and getting enough sleep, you must, must take care of your personal hygiene (bathing twice a day, brushing your teeth twice a day and flossing) – These activities go a long way in prolonging your life, enhancing your health and cutting your healthcare costs (regular dental cleaning and checkups are fast and painless, your body is clean and free of bacteria and you are generally a happier human being.)
  3. Saving Money On Water – Water is possibly the least contributing factor to your monthly bills. While I strongly believe that the cost of water can and should be managed, it must not compromise your health and well being. In the process of conserving water, you neither leave your body and dishes half washed nor recycle dirty clothes. You’ll simply pay for it in healthcare costs once your dishes and ultimately food get contaminated and you’ve developed a rash on your bottom from wearing dirty clothes and not washing your body properly.

Self-Rewards and Gifts Pound Foolish:

  1. Miscalculating Drink Specials – Usually when you go to the bar, you max out at 3 glasses of the $7 drinks and then drive home. That’s a total of $21. Why then would you go to the bar for the Thursday $3 specials, drink 7 glasses to match your normal $21 cap but end up taking a $20 taxi ride home because you can’t drive?
  2. Taking Illogical Self-Rewards – I am a big fan of celebrating checkpoints and rewarding yourself every once in a while on your journey to being debt free. However, your self-reward have to make sense and can’t cannibalize your progress. Rewarding yourself with a $600 trip or gift after saving $500 must not happen. Period!
  3. Taking Vacation Loans – I love, love, love to travel. But so many times in my journey I’ve made the mistake of traveling on a credit card…especially for vacations. Don’t do it. You won’t enjoy your vacation as much as you possibly could because you know you have hell to pay once you get back. Long after the vacation is over, the credit card balance balloons and the monthly payments show up…you’ll simply feel like you’re giving your money away to some stranger while getting absolutely nothing in return. And with the added interests, you’ll end up paying a lot more for your trip than you bargained for. Smartest way to travel is to start a savings account and drop excess cash in there until you have enough to pay for the majority of your trip. Not only will you enjoy the trip more, but you’ll truly feel like you’ve earned it. Trust me…I’ve done 30+ countries now and I’ve tried several methods of travel financing!

Education Pound Foolish:

  1. Not Maximizing College Debt Value – College debt is always a touchy subject and you can argue both sides of every education coin. We can all agree that if you have the chance to go to college and get a good education, you definitely should. Keep in mind that ‘going to college’ and ‘getting a good education’ are not the same. It is better to amass a little debt and get a good education coupled with a good paying job than deciding not to go into debt for a proper college education only to end up in an $8 retail job asking if they want fries with that. I fully understand the value and satisfaction that comes with going after your dreams and pursuing degrees that make you happy, however, I’m a firm believer that if you’re going to take out a loan for college, you really should consider go into a reputable field with good job prospects after graduation. There’s nothing worse than graduating from college and still needing ‘two years’ experience’ to get hired for your first job. Or graduating with a 4 year college degree only to end up at your first job with some fries on the side while Fedloan’s siblings, Sallie Mae and Navient are knocking down your door.
  2. Misusing Career Investments – I’m not sure how I feel about this one yet but there has to be something slightly wrong with collecting over $100k in student loans to become a doctor, lawyer, etc only to abandon your career path to become a stay-at-home mom. That’s like cooking the most amazing meal only to let it sit in the fridge indefinitely. If this is by choice, then I guess it’s okay but if it’s because ‘life happened’ and someone had to stay home, there’s something wrong with that!

Parking Tickets Pound Foolish:

  1. Ignoring Parking Tickets – Parking and “just running in” without feeding the meter a quarter, but returning to find a parking ticket attached to your windshield. Then refusing to pay a $15 parking only to end up paying $45 60 days later after it has multiplied. First of all, always put money in the meter…you have no excuse since most meters accept credit cards now and have apps you can use to pay. And if you’re still foolish enough to get a parking ticket, pay it! If you need to buy yourself more time, go online and appeal that ticket. You’ll buy yourself an additional 10 days but by all means, pay the damn ticket. Refusal to pay the tickets would eventually get your car impounded along with other headaches that come with that territory.

Loans & Credit Cards Pound Foolish:

  1. Ignoring Bills and Financial Obligations: All jokes aside, your bills and loans are 100% your responsibility. Do whatever you have to do to make your monthly payments on time! And if you can’t possibly make your payments, don’t hesitate to pick up the phone and call your debtor, document the phone conversation if you can and ask for a written confirmation of the outcome (email, letter, etc.) Most are usually reasonable and can help you push the payment back or reduce the amount required. The worst thing you can do is to ignore your bills and hope they’ll magically vanish or wait until the last possible minute before taking action. Your ignorance is just not worth the amount of late fees and interest payments that’ll visit you and you’ll end up in a cycle of debt that’s hard to overcome.
  2. Over-valuing Credit Card Reward Points – Getting a fancy rewards credit card for the cash back and then spending more than you would otherwise to earn extra rebates and useless points. Or opening multiple credit cards for reward points only to lose money on interest payments because you can’t pay off the balances each month. Just STOP now! Pay off the credit cards that you can and burn them! Credit cards are the devil’s gift to mankind (that’s a topic for another day.)
  3. Undervaluing Credit Score Hits – Refusing to close $200 account and letting your credit score take a hit. You may think you’ve avoided paying $200, but it’ll come back to bite you when it’s time to apply for anything that involves interest rates or security deposits. When you go to rent, set up cable, internet, electricity, water, don’t be surprised if your required security deposits add up to over $1,000. You laid the groundwork for that.

Gadgets Pound Foolish:

  1. Dismissing Internet Security – Saving money with free internet security software only to buy a new PC when a virus destroys your old one; you could even be one of the lucky few that gets their identity compromised which requires hundreds of dollars for resolution. And then you’ll still have to get a proper internet security with monthly payments…and now that you’re paranoid, you’ll even pay extra for added features you would have never needed in the first place.
  2. Mismanaging Data Plan – With some AT&T family plans, there’s about a $40 difference between 20GB and 30GB of data a month. AT&T charges you $15 for every additional GB over your plan. Knowing that you average at least 18GB each month, does it make sense to sign up for 20GB of data each month and end up paying an extra $45/month for 3 additional GBs? Why not pay an extra $40 per month and take advantage of the 5 extra GBs. Keep in mind that your unused data rolls over to the next month on applicable plans.

Home Pound Foolish:

  1. Playing Bob the Builder Without Expertise – I’m a fan of DIY (Do It Yourself) projects. However, you must pick your poison wisely and cannot endanger yourself and others in the process…Not to mention that you may end up spending a lot more than you would have with an expert. Replacing your own brake pads, tackling plumbing issues in your home, fixing gas leaks, sword fighting with bedbugs, etc. The stories are endless.

The Worst:

  1. LYING About Your Financial Position – Of all the items we’ve listed, lying is by far the worst…not just explicitly but also through your purchasing actions. Lying about your financial situation will effectively tie a noose around your neck and give your friends, family and partners the wrong impression about your finances. Especially when the perception is that you’re doing a lot better than you actually are. The best thing you can do for your finances is to be honest with yourself, your partner, friends and family. It’s okay to admit that you’d love to “go and have a great time,” however, you’re choosing to lay low in order to pay off debts, loans, save money, etc…There’s nothing worse than going out with friends and spend every second making monetary calculations and life decisions in your head because you’re spending money that could go to better use. That’s no fun!

With every financial decision you make, there’s always a trade-off. We really want you to avoid having to say IF I HAD KNOWN or IF I COULD GO BACK down the road. That’s pound foolish! Pay attention to the long term impact of your trade-off and make sure that you’re not jeopardizing your future for short term gains and tiny savings! Prevention is always better than cure!

We hope you enjoyed reading this piece and identified one or two areas where you’re guilty. Please feel free to share with us some of your more interesting penny-wise/pound-foolish stories so that we can all learn from it!


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