How frugality can cost you money: 5 tips to guide smart spending

You watch your spending. Maybe you’re even a self-proclaimed bargain hunter, celebrating your latest deep discount or crazy good coupon. But have you ever asked yourself: Can being frugal cost me money?

While very well-intentioned, there are times when the cost of being frugal can outweigh potential savings. From spending too little on items that should last to passing up ways to get rewarded for money you’d spend anyway, here are five ways being frugal can cost you money:

1. Buying low-quality products

Are the things you’re buying built to last? If not, your frugality can cost you money if you’re frequently dishing out for replacement products.

“Being overly focused on price rather than quality could make you spend more in the long run to replace cheap goods that keep falling apart,” says consumer savings expert Andrea Woroch. For example, a black pair of pants is a standard wardrobe staple for many professions. Grab the least expensive pair you can find, right? If a $20 pair only lasts you three to four months, you’re spending between $60 to $80 per year to keep those pants in circulation. You may be able to find a more expensive, higher-quality pair that lasts longer and is less than your yearly replacement cost.

Besides clothing, being frugal can cost you money with other items that come with inexpensive price tags and potentially low quality, including electronics, kitchenware and linens. Spending a little more on quality can mean replacing that frying pan once every 10 years instead of once every year.

Chelsea Knapp, a financial advisor, recommends investing a little more in staple items. “Having a wardrobe filled with key, quality-made pieces instead of a closet packed with cheap, poorly made clothes will not only look better, but often saves you money in the long run,” Knapp says.

2. Overlooking credit and debit card rewards

Those with an eye toward frugal living might try to avoid credit cards to prevent overspending and instead favor cash (envelope budget, anyone?). However, this is another way frugality can cost you money. Woroch says there are numerous rewards waiting for savvy spenders who only charge what they can afford to pay off in full each month.

“Credit cards can help you reap many rewards, like free travel and cash back,” Woroch says, which can reduce expenses and help you save even more than you would by paying with cash. To make sure you’re not leaving cash on the table, go through all of the credit cards in your wallet and review their rewards programs.

If you’re still more comfortable with cash and prefer debit, consider opening a rewards checking account. With Discover Cashback Debit for example, you can earn 1% cash back on up to $3,000 in debit (yep, debit!) card purchases each month.¹

3. Cutting corners on health

Being frugal can cost you money—and perhaps even your health—by skipping medical appointments to avoid co-pays and delaying treatments or procedures thinking they won’t be covered by your health care plan. Take the time to fully review your health benefits (think medical, dental and vision) to avoid leaving paid-for benefits untapped.

“Many people neglect regular checkups and dental cleanings,” Knapp says. Even if you don’t have coverage and have to pay out-of-pocket for a visit, that cost will likely be much lower than a medical emergency down the road. Knapp, for example, has seen dental implants and custom dental work easily cost up to $10,000.

Going to your dentist or doctor only when there’s a sickness or emergency is a big cost of being frugal—especially if you are missing out on full or partial benefits you’ve already paid for in your monthly medical premiums.

4. Sticking by DIY

For many people, there’s joy and reward in the do-it-yourself approach. But when it impacts quality and productivity, DIY frugality can cost you money.

If you own a home, there might be times when DIY keeps money in your pocket and saves you the cost and hassle of hiring help—and sometimes not. Sure, you can patch your own drywall in your bathroom. However, you could be covering up a bigger problem that a pro would have spotted.

“The desire to save on outsourcing can greatly sabotage your financial progress and growth,” Woroch says, one cost of being frugal that is definitely not worth it. “It’s better to spend money and outsource services others can do so you can focus on areas that truly need your time and attention.”

The next time a DIY situation comes up, consider if frugality can cost you money. Ask if you truly have the skills necessary to do the job right and in a reasonable amount of time. If you decide to bring in a professional, you can still save on project costs by buying the materials yourself so you only have to pay for labor.

5. Being inefficient with your time

Another way being frugal can cost you money is spending too much of your own time trying to save a buck. Is it worth it to spend hours and hours bargain hunting? Is it worth it to tackle that hardwood flooring installation yourself? While you might save money in both instances, the time lost could be considerable and impact your quality of life.

To avoid this cost of being frugal, financial advisor Knapp encourages people to get in the habit of asking what their time is worth. “I like to consider time as a currency,” Knapp says. “People work with me because the time it would take them to learn how to do what I do could be time spent with their families, on their professions or on other passions.”

Learning the right frugal behavior

These strategies can help you avoid some of the costs of being frugal and help you stay on a better spending path. Avoid learning your lesson the hard way and remember this: It pays to know that less expensive choices may not always be the best financial decisions.

¹ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo^® and PayPal^®, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the US and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.