Do you follow every money saving tip you hear? Sometimes it can be a bad idea. These frugal living myths are the ones that can sucker you in and can actually do your finances more harm than good.
When I first began finding ways to save money, I devoured any tips I could get my hands on. We’re talking everything from your basic frugal living blog to financial gurus such as Dave Ramsey. I wanted to learn everything I could so that I would be more successful.
Have you ever done the same thing as you try to learn how to save money?
Frugal Living Tips That Can Harm Your Finances
I know. It seems odd that I would say a tip about saving money could harm your budget, but the truth is that not everyone knows what they’re talking about and not everyone has your best interest in mind.
Most people will not intentionally mislead you, but some people do just want to watch the world burn.
Gardening Is a Fast Track to Saving Money
While starting a garden is a great way to feed your family healthier foods, it is not always the fast track to saving money. In fact, unless you are an experienced gardener, it will likely take you two to three years to make your mistakes and learn from them.
This does not mean that having a garden is not worth it. It only means that you should not expect a huge harvest the first year or two and that you should not rely on your garden until it is successfully producing.
Gardening is Cheap to Start
Another myth about saving money people like to tell is that gardening is super cheap to start. Frankly? It often is not.
Even if you do things such as build DIY raised garden beds, you very likely will have additional costs for things such as garden soil, organic fertilizer supplies, seeds, garden shade cloth and garden hoops, planters and more.
Some of these costs will be yearly while others will be once every few years. However, fooling yourself into thinking that starting a garden will be cheap is a great way to suddenly find yourself spending more than you expected to spend. If you do what you can to start a garden on a budget, but expect or plan to spend more, you won’t be caught off-guard if your plants cost more than you thought they might.
$1,000 is a Big Enough Emergency Fund
Answer a question for me; how many of your bills does $1,000 really cover for your family?
Likely not that many.
I know personally, that does not even cover our monthly house payment.
While a $1,000 emergency fund is better than having no emergency money, the truth about this financial myth is that not having a fund that will cover at least one month of your total expenses could lead to true financial issues for your family. You could find yourself unable to pay your bills or worse.
Credit is Always Bad
It is pretty common to see frugal and financial bloggers advise people something akin to “credit is the devil,” but the truth is that in today’s world, a good credit score is necessary for a lot of things that don’t include borrowing.
In a digitally based world, your credit score is often used for things such as finding rental housing, renting cars, and can even determine whether you get a new job or not. It is for this reason that you absolutely do need to have a good credit score.
Now with that being said, I do not mean that you should go debt for thousands of dollars. While I do believe you should have good credit, I also want to stress that your credit use should be responsible and that you should only borrow what you can truly afford.
You Can’t Earn Legit Money Online
The internet can be a great place to spend your time or a hole that drags you down. But if you are in a position where you need to make extra money online, some people will tell you that it can’t be done in a way that does not involve taking your clothes off.
Yes. It absolutely can.
There are quite a few legitimate ways to earn money online, but the two biggest are starting a money making blog such as this one or working legitimate survey sites.
With InstaGC, you complete offers and surveys, watch videos and more in exchange for points. There is no minimum amount to be paid and once your first payment is processed, your payouts will be instant. They offer payment by gift card, Paypal, direct deposit and even Bitcoin. Since they offer payment in Bitcoin, it is a fantastic way to earn free Bitcoin.
Sign up for InstaGC HERE and get 10 free points when you confirm your new account.
With Swagbucks, you earn points for searching the internet, playing games, watching videos and a whole lot more. You can even earn points for printing coupons!
Sign up for Swagbucks HERE and you’ll get free points with your new account.
For those interested in starting their own blog, I have a photo tutorial right HERE on how to do so for less than $50.00.
Phantom Power Doesn’t Cost Much
Have you ever heard of phantom power?
Phantom power is what we call the power that items that continuously stay plugged in draw even if they are not turned on. This is things such as your coffee pot, toaster, tv, etc.
I have seen far too many people say that phantom power does not cost much, but when you do the math, you will find that it adds up very quickly.
Let’s math it:
The average phantom power cost per day is approximately $0.50 per day. Doesn’t sound like much, does it? Keep in mind that your average may be more or less depending on how much you have plugged in.
However, $0.50 per day for a month is $15.00 per month.
$15.00 per month times twelve months works out to $180.00 per year!
Now I don’t know about you, but $180 is not sneeze money to me. Because it does add up to almost $200 a year, the best way to cut this cost is to simply unplug those items when they’re not being actively used. If you have a lot of things plugged in that are in the same area, a power strip can be extremely helpful.
Having a Stockpile Doesn’t Save Money
Most people do not have a realistic concept of how much those items can cost per year. But if you normally spend $400 a month on those items and your stockpile allows you to skip shopping for a year, that means you will save $4800 in that year.
In addition, your stockpile will also protect you from rising costs. As of this writing, grocery costs have jumped 10%+ in just a few months and it does not seem as if it is going to stop rising anytime soon. When you purchase items on sale or at a lower price, you can avoid paying those much higher prices as they continue to rise.
Anyone who tells you that a stockpile does not save you money, does not have your best interests at heart.
Reusing Things Does Not Save Much Money
I have always been big on reusing things for a reason.
It saves much more money than you could ever imagine!
Whether you take the time to find a new use for just about everything in your home or you simply pick and choose from a list of things to reuse, each one will save you money.
It may only be a couple of dollars each item, but that couple of dollars will always add up to bigger savings.
Quality Over Quantity Only Matters Sometimes
Another thing I have talked about quite a bit on this site is quality over quantity. Basically, the cheaper item is not always the best buy.
Folks who tell you otherwise are spewing a frugal living myth that has been around for decades.
Often, the cheaper item will only result in your spending more money over the course of time than you would have if you had simply bought the more expensive option. This is the case with things such as shoes. Cheaper shoes often only last a few months. The more expensive option. however, will likely last years.
With all of that said, the more expensive option is not always the better buy. The key to knowing the difference is to do your due diligence on the purchase before you actually pay for it.
You Absolutely MUST Have a Budget
Thisis what I consider to be one of he biggest frugal living myths out there.
Not everyone absolutely needs a budget. While having a budget is never a bad thing, some people are quite capable of managing their money without one.
For these people, a budget can actually cause financial confusion and create unnecessary financial issues. If you are one of these people, don’t force yourself to do a budget that simply doesn’t work for your family.
If, however, you have tried life without a budget and found it does not work for you, consider looking into how to create a simple budget. As with anything, the simpler your budget is, the easier it will be to follow.
Your Health Does Not Affect Your Budget
I pretend to be healthy a lot, but the truth is that I am quite sick. I have been for almost fifteen years. It took me thirteen of those years to get a diagnosis.
And as someone who is sick everyday of my life, I will tell you that even with the really good insurance my husband’s work offers, being ill is expensive.
Like really expensive.
In the past year I have paid $1800 for an MRI, $200+ per month for medications, more than $2,000 in co-pays for various doctors and so on. That is not including the walker, shower chair and other medical equipment I have had to use at different points of the year or the loss in income because low dose chemo medications made me so sick I couldn’t get out of bed and I lost work hours.
And that does not include any loss of income because you are too sick to work.
I am doing far better these days, but I hope I have made my point. Your health is directly tied to your finances. Simply put; the sicker you are, the closer to broke you will be.
Pro Tip: Blink Health is a great way to help yourself save money on prescriptions. With the programs they offer, you can often save as much as 50% on them.
Clearance Buys Are Always a Good Buy
Finally, the single biggest lie – yes flat out lie – about frugal living that I have ever heard is that clearance buys are always a good buy.
Frankly, sometimes they’re not.
Clearance meat is a great example. I don’t care if you’re getting that T-bone for $1.99/lb. If you can’t get it frozen and/or used before it spoils? It’s a waste of your hard earned money.
If you buy those clearance jeans, but discover after you get home they were marked down due to a manufacturing flaw and they rip a week later, you wasted your money.
This isn’t to say that you should avoid clearance. I love clearance deals. I am only saying that it is best to ensure you can use the deal before it goes bad and/or that the item really is in good shape before you purchase.
Saving money does not have to be a long, drawn out complicated process. But the more of these frugal myths you make room for, the harder time you will have really saving. Instead, it is best to decide what money saving tips you use simply by asking yourself if they will work for your family.
And if it won’t? Skip it.