When “Saving Money” Can Cost You Money

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There’s always plenty of ideas as to how we could all save money and be able to put a little more by for a rainy day. There’s so much advice about the subject it can feel bizarre that anyone isn’t so great at financial management – these tips are so ubiquitous and apparently simple, it begs the question: how are so many slipping through the net? If it’s so easy to save yourself some cash, then why isn’t everyone swimming around in their pool of gold coins, a la Scrooge McDuck?

(Though truth be told, diving into a pile of gold coins is not the most enticing of ideas unless you fancy knocking yourself out cold… come on, Disney, think these things through!)

There are several reasons why people can know all the ways they should save money, but somehow are still managing to end the month praying for pay day:

People know what they should do… but they don’t actually do it. It’s one thing to know it’s a good idea to compare your gas and utility prices, for example, but it’s quite another to actually go ahead and do it. We’re all guilty of assuming something will be more difficult than it actually is and dragging our feet as a result.

Something else comes along as a priority. It’s easy enough to get distracted by work, life, your kids – and suddenly all your money-saving promises to yourself float out of the window.

It costs you money to save money.

It’s the latter that’s worth focusing on, because it’s often the one no one sees coming. Why would it cost you money to save money? Here’s an example.

If you’ve ever looked for money saving tips online, then somewhere you will have seen a suggestion that you try and make your own… well, anything… wherever possible. Don’t buy vegetables where you can grow them for yourself, no need to buy home decor when your crafty side can take care of it – that kind of thing.

In general, this is a great idea. Many of the things we buy are priced that way only for convenience; we’re being charged because we’re too lazy to do something for ourselves. Sometimes, that’s an exchange we’re willing to make; we know, for example, a takeaway meal doesn’t cost half what we’re charged to produce, but we’re okay with that for the convenience.
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So you make the decision to make things yourself. With the nights getting shorter, let’s say you’re after a pair of curtains for the sake of your sleeping child. You have a look around and see prices anywhere between £30-50 for a pay of blackout curtains that will keep your child in sweet slumber a little longer.

No, you decide, I am not going to be overcharged this time. So you resolve to try and make a pair yourself, browsing for online curtain fabrics and eventually settling on a design you like.

If you know how to make curtains, then great! You’ve made a good decision that will save you money and give your child’s room a bit more of a personal feel.

If you don’t know how to make curtains, however… oh dear.

Maybe you’ll luck out, get it right first time, and discover that you have a hitherto unknown skill for curtain design. Or – as is more likely – you’ll make a mess, waste the cost of the materials, and still end up having to buy a pair from a store. So not only do you have to pay the retail cost, but you’ve also got the sunk costs of the materials.
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This is just an example – the same thing can happen again and again if you decide to DIY as much of your life as possible. It applies to the basic, like a pair of curtains, through to the kind of building or renovation work you might be tempted to take on yourself. If you get overly focused on the fact it doesn’t cost as much, then you might forget to ask if you’re really going to be able to do it.

So before you throw yourself into any project – from the small to the huge – you have to be realistic. Look in a mirror and ask if you really know what you’re doing. If you don’t, then you’re not saving money by giving it a go – you’re just postponing (and likely worsening) the point it’s going to cost you. Be realistic about your skills – your bank balance will thank you for it!