Getting money-saving tips is important. Now, more than ever, it is highly crucial that you learn how to manage your finances effectively. Having a good grasp of your financial health will help you achieve your goals. It will also help you feel less stressed when dealing with financial emergencies.
Plenty of articles exist filled with money-saving tips aiming to help you boost your financial health. However, these tips may be misleading or may be filled with misconceptions. In this article, we will demystify 7 BIG money-saving myths.
Myth #1 Couponing is a great way to save money
The University of Dalhousie, discovered in 2022 that lower-income Canadians use coupons more frequently. They use them at a rate of 18%, compared to 14% for higher-earning consumers. While the temptation to use coupons is understandable, it only makes sense to take a moment to make sure it’s worthwhile.
Often, coupons aren’t worth the extra time and money spent to go out of your way to buy something specific. However, if you’re already shopping at your favourite store the extra effort may be worth it. That being said, don’t spend money just because an item is on sale. Buying something with a coupon that you may not necessarily need or want doesn’t save you money. In fact, it may ruin your financial health if it is done too often.
Myth #2 DIY your way to cost savings
Do-it-yourself projects might seem like a great way to save costs. There are plenty of YouTube DIY videos out there to help fix things around the house. However, they often come at a price such as time and costly tools or parts. There’s also the chance of making things worse for yourself and having to call in the professionals. In other words, hire a professional plumber.
There is nothing wrong with doing things yourself, just consider all the potential costs before jumping in.
Myth #3 Bulk purchasing saves money
Bulk purchasing might seem like the best way to save money. It often is a good saving tactic for people with large families. However, if you are single or just you and a partner, this might be a waste of money.
Bulk purchasing has its drawbacks. Especially when it comes to perishables. When considering a bulk purchase, be truthful with yourself. Are you really going to eat all those crackers before they go stale?
Even when buying non-perishables in bulk take a moment to consider the price. Is it really cheaper? Sometimes we automatically think bulk equals cheaper. That’s not always true. Also, think about if you have the storage space in your home to put your bulk purchase.
Myth #4 Credit card rewards programs help save money
Using credit card reward points as a money-saving strategy isn’t recommended. It can lead to temptation and unnecessary purchases, which can harm your financial health. Yes, using your card will mean your credit card company will reward you with some points. It would be difficult, even impossible, to find a rewards program that gives enough back to cover interest costs. Meaning that if you don’t pay your bill on time, you will end up spending more money in the long run. It’s best to consider rewards programs as rewards rather than a savings strategy.
Here’s what you can do to resist the temptation of buying items just to rack up points:
- Stick to a budget: Create a monthly budget that you think is acceptable for you and your family. Make sure this budget reflects your level of income and what you are comfortable spending.
- Put your credit card in a safe place: Mitigate overspending by removing all credit card information from your electronic devices. This will help cut down on impulse purchases. Also, put your credit card in a place that is hard to get to. This will help you give yourself some time to think if you want the item you desire to purchase.
- Use cash as much as possible: Physically seeing your finances dwindle is known to encourage mindful spending.
Myth #5: You can save money by not having insurance
While immediate cash flow may be eased by forgoing insurance, it’s not a good long-term money-saving strategy. There’s a reason why millions of Canadians choose to purchase insurance. Expect the unexpected. It’s safe to assume that everyone experiences an accident at some point in their lives.
Whether it’s to your physical body or property, accidents happen unexpectedly. Being properly insured prepares you for these challenging times. The cost of repairing/replacing items or taking time off to get better can be really high. Often, what you pay for in insurance turns out to be way less than the cost associated with the accident. Plus, in the meantime, you’ll have peace of mind.
Myth #6: Skipping your daily coffee will save you money
Canadians are big coffee lovers. According to Made in Canada, about 72% of Canadians drink coffee daily. You may think that just skipping your morning Starbucks or Tim Horton’s coffee or mocha will help you save money, but it isn’t really the case. What some people fail to take into account is that skipping coffee doesn’t change the rate of inflation of goods and services. Thus, those few dollars you are not spending to buy coffee will be used to buy other items like food, pay for rent, or build an emergency fund.
Myth #7 Buying cheaper products will save you more money
Buying cheap products may seem like a good way to save money, but it’s not always the best choice. Cheap products often break quicker than more expensive items that are designed better and use better materials. At one point replacing an item becomes more costly than if you had bought the more expensive version initially.
Final Thoughts
The internet is full of great money-saving tips. However, use your judgment to see if these tips can apply to your finances and the lifestyle that you live.
Ultimately, the best money-saving tip is to have a manageable budget and seek guidance from an appropriate financial professional when needed.
When it comes to unmanageable debt, trained Credit Counsellors, like ours, can empower you with the information needed to choose the best debt relief solution to help you get out of debt.
