To Save Money Is an Art Misunderstood. Here Are 15 Ways Poor People Burn Money Thinking They Are Saving It.
Aluxers if you want to save money, there’s a famous saying to understand: “Penny Wise, Pound Foolish,” and its meaning is simple. We often work our asses off to save a few cents, but don’t take into account the bigger picture of what it’s costing us.
Poor people try and save money to accumulate a little wealth, but often those money saving choices are not saving money at all. In fact, they’re costing money!
So, be sure to read until the end to understand the important lesson of this article.
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If instead of reading you would prefer watching your way to a million dollars, here’s all of the content of this article packed in a video:
With that out of the way, let’s look at 15 “saving” strategies to destroy a bank account in the long run.
I see it, I like it, I want it, I buy it… well, Aluxers, that’s all fine except if you keep buying cheap quality clothing, it’s not going to last you very long. After a few washes, your clothes will start falling apart, the fabric will stretch, colours will fade and before you know it, you can’t wear that item anymore.
Poor people think they’re saving money by buying the cheaper options, but when you have to keep buying it, it ends up costing the same as buying one good quality item. It would be more beneficial to save that money and buy once. You’ll look better in the item; it will feel better on you and it will last longer.
Buying a Bigger House Further Away From the City
Aluxers, let’s paint a picture.
Steve and Kyle both have $100,000 to buy a home. Steve isn’t super well-off whereas Kyle is doing well. Steve decides to buy a bigger, modern house further away from the city while Kyle opts for a smaller house in the city that needs a bit of work.
Here’s a breakdown of costs:
Steve has $100,000.
House costs – $75,000
He buys new furniture to look the part – $25,000
Kyle has $100,000
House costs $95,000
Kyle doesn’t worry to buy new furniture and makes do with what he already has.
Steve spends a fortune getting himself to and from work. He wastes time every day during the commute. Sadly, his house doesn’t gain much value or save money and when it’s time to sell he makes little profit.
What Steve saved on the initial purchase is lost on other expenses.
The rich guy, in this case Kyle, slowly renovates his house. He doesn’t spend a lot of money on gas and has plenty more time to do those renovations. He ends up selling his house for a tidy profit and has made a sound investment.
Skipping Routine Medical Checks
One of the biggest mistakes poor people make, is not going for their regular check-ups to save money. Whether it’s the dentist, the optometrist or gynaecologist, these should always be a priority.
As A. J. Reb Materi, a Canadian church official once said, “So many people spend their health gaining wealth, and then have to spend their wealth to regain their health.”
Here’s a typical scenario.
A poor person chooses not to go for a dentist check-up because they don’t have the extra funds. Over time, they experience the worst toothache you could imagine and have to go to the dentist. The dentist finds several cavities, a rotten tooth and gingivitis. The bill is now thousands of dollars, and that person who wanted to save money is on the contrary poorer now than had they just gone for their regular check-ups!
While we’re on the topic of medical checkups, we thought you might be interested in our article covering the “Top 10 Richest Doctors of The World.”
Buying on Sale
Sale items are like click bait, you see bright red and your buying instinct just kicks in. Plus, you’ll save money, right? Wrong!
When you buy something on sale, sure it costs less than the regular price, however, money has still left your wallet and it hasn’t been invested or saved properly.
Aluxers, be honest – have you ever bought something on sale and then taken the money you saved and invested it properly? Chances are slim. The saved money has just disappeared, and you have nothing to show for it.
Poor people see a sale sign and they just buy because, well, they’re saving money. And Aluxers, we’re not saying avoid all sales – hell no! But be sure that the item you purchased was something you were already planning to buy, and you have a solid idea of its cost. When you spot it on sale, bonus – you have saved some money!
Incurring Unnecessary Penalties or Fines
Aluxers, we guarantee you that your government or municipality is not out to target the poor. All they want is everybody who drives a vehicle to have an up-to-date paid for vehicle licence, or if you have a TV, some countries require you to pay a TV licence.
When you don’t renew your licences, you get penalized and the fine received is far greater than the amount it would have cost to renew the licence in question.
And you’re not that poor that you can’t even pay attention, so listen carefully to our next suggestion!
Doing It Yourself When You Don’t Know What You’re Doing
In order to save hiring a professional, poor people like to attempt the job themselves. As noble as what that sounds, it can lead to way bigger problems!
These words would resonate with a poor person:
I don’t always do DIY, but when I do, I drill into a water pipe at 6pm the night before a public holiday.
DIY jobs are best left to the professionals, and Aluxers, these are the most common DIY accidents – so try and avoid these at all costs!
- Cuts from knives while cutting cable and carpets
- Slipping with saws while cutting wood
- Paint dripping into eyes from painting the ceiling
- Slabs falling onto hands and feet.
And there you thought it was hammering your thumb with a hammer!
Obtaining a “Cool” 2nd Hand Car at a Bargain
We’ve heard it ad nauseum how new cars lose so much value and it’s better to buy a second hand car, but there is a stark difference between buying a reputable brand that is safe and buying a car just because you think it’s cool.
With used car purchases, if you don’t do your homework properly, could cost a fortune in the long run.
Poor people will skip having the car checked by a mechanic, to save costs and they buy the vehicle based on looks. Without the proper checks being done, the maintenance and repairs of the vehicle can really mount up over time.
“Super deal,” “unbelievable savings” and “buy 2 and get 1 free” are all great at catching your attention and making you think you’re really saving some cash dollar.
However, poor people end up wasting money by doing this because they don’t need 40 cans of tuna or 30 bags of spaghetti!
It’s even worse when it comes to fresh produce or perishables. Stores need to turn the stock quickly, so they create these “unbelievable” deals, and you end up taking 10 bunches of spinach home to save money. How much of that would you genuinely eat and how much would go to waste?
There are other consequences of bulk buying. The surplus really takes up a lot of space. You tend to eat more, because if you’ve got 10 packets of biscuits you got on special, you’re likely to eat 10 packets of biscuits that you got on special.
Things that are ok to buy in bulk include TP, and I mean that was a luxury at the beginning of Covid, pet food, cleaning products, and dental care… to help you avoid those cavities, rotten teeth and gingivitis we mentioned earlier.
Eating Unhealthily and Buying Convenient Foods
Virginia Woolf once said, “One cannot think well, love well, sleep well, if one has not dined well.” This is a hugely negative factor influencing the poor. Dietary choices affect our entire being. We can’t perform well if we’ve been eating processed foods, convenient foods or takeaways.
There are several socio-economic factors that explain why poor people gravitate towards foods that are high in fat, salt, and sugar, and low in nutritional value.
The obvious reason is that it helps them save money but there’s the not so obvious reason; making fresh healthy food from scratch is time-consuming. Poor people are often working several jobs to make ends meet, trapped in a financial, mental and emotional crisis that requires every ounce of energy to survive the day, so by the end of it – it’s a case of buying whatever is convenient.
In response to Jaime Oliver’s #adenough campaign, where he wanted additional tax added onto sugar, Twitter user @sibylpain explained how different it is growing up dirt poor, and ended her well thought out points by saying, “if they had raised prices on sugary and fatty foods when i was a kid, we wouldn’t have eaten. plain and simple. in my humble opinion, it’s much better for a kid to eat a pizza than not eat a damn thing.”
Gambling, Get Rich Quick Schemes and Lotto Tickets
Tata Ma Chance, Tata Ma Millions is the slogan for the South African Lotto. And the slogan says it all… take a chance and you could take millions, but it’s a chance.
According to the North American Association of State and Provincial Lotteries, In America, more money is spent on Lotto tickets than any other forms of entertainment.
To compare – in 2014, $70.1 billion was spent on lottery tickets compared to $63 billion spent on sports tickets, movie tickets, music, books and video games. The Atlantic further explains that those that spent the most money on tickets are on the lower end of the socioeconomic spectrum. A report from NC Policy Watch confirmed that people from the poorest counties bought the most tickets.
Gambling and get rich quick schemes are all the same. To gain proper wealth is a gradual, well thought out process and poor people lose more than they gain by not putting thought into their financial outlay.
Aluxers, we know how crazy expensive razors are! It’s surprising that we all still bother shaving. We’d probably all be wealthier and happier in the long run!
Anyway, we digress.
If you buy your razors at the dollar store, you’re gonna have a bad time.
Those cheapy razors do one shave and they’re poked, and then you replace it, and it’s one shave and poked. Not only is this terrible for the environment, but it sucks the life out of your budget.
Rather buy decent razors! Your skin will love it. Your budget will choke initially, but you’ll soon see that you’ll save in the long run.
Dying Your Own Hair
Poor or not poor, we’ve all had that one botched home dye disaster, and we’ve learnt our lesson!
However, poor people who think they’re saving money doing their own hair, end up costing themselves money… and hair.
Hair gets burnt, damaged and dry. It falls out, doesn’t grow, and turns orange! It then costs a fortune to get it back to its original state.
You can tell a lot about a person’s income by the state of their hair, like we explained in our video, “15 Ways to Look Expensive Without Spending a Fortune“. So, rather spend the money on a professional and never have to worry about a botched dye job again.
Next up, a study reveals some surprising results.
If you suffer from OCD – Obsessive Couponing Disorder – then you could be making yourself poorer instead of richer!
A study done by two British academics, David Gill and John Thanassoulis, had some surprising results. They confirmed that people who couponed were less satisfied and didn’t save money in the long run. Their study was called “Competition in Posted Prices with Stochastic Discounts” and it said that the more people that buy discounted items resulted in the overall prices shooting up for everyone else.
Couponing takes time, and fuel if you’re driving from one store to another and often you buy things you don’t need just for the discount.
Using Saving Apps
Saving Apps may save money, but Aluxers, they certainly don’t save you time. Have you ever tried using one yourself? They take a lot of time, research, and they’re just not worth the effort.
Much like our previous point, you’d be better off just purchasing everything from one store, saving you time, fuel, data, and exposure to Covid!
Doing Your Own Taxes!
Many are under the false assumption that doing your own taxes would be cost effective and save money, and sure, if you have the most basic information and income – it probably will. However, hiring someone to do your taxes for you, often leads to a higher return.
The average refund of people filing their own taxes is $1,492 according to RGBrenner.com and are roughly $300 more when you hire a professional. If you save money like that, you could use the amount to pay the fees of the professional, plus you wouldn’t need to do the work yourself!
Like Albert Einstein once said, “the hardest thing in the world to understand is the income tax.”
What do you believe poor people ultimately waste finances on when they think they save money? We love hearing from you Aluxers.