The recession has many of us looking for ways to pinch pennies. We glory in small savings, and look for ways to shave a little more off the bill. Of course, small savings can add up to big savings down the road. But, in some cases, penny pinching does not actually result in big picture savings. Instead, we might find that we are being penny wise and pound foolish, introducing inefficient elements into our finances. After all, sometimes small savings are just…small.
Some examples of being penny wise and pound foolish include the following:
- Driving out of your way to save a couple cents a gallon on gas. By the time you get back on your route, you might have negated the savings.
- Going all over town to find the best price on something, ultimately saving a couple of dollars. By the time you pay for the gas, and consider your time, in the search, you might have negated the value of the savings.
- Skimping on quality and having to buy the item again sooner than expected.
- Impulse buying something you don’t need because it’s selling for a “great price.”
The above examples illustrate the inefficiency of looking to rack up small savings in some cases. Instead of looking at the big picture, you might be so narrowly focused on penny pinching that you are actually losing money in the long run.
Instead of looking only at the immediate small savings on occasion, it is a good idea to consider that you might do to more consistently save on recurring, monthly expenses. Looking for ways to trim some of the fat out of your regular budget, and looking for bigger savings on things that you need, might actually help you get ahead more than if you are always looking to shave a few cents off the cost of something.
While you still might want to do some penny pinching, make sure you consider the overall cost, and the big picture. You don’t want to be pound foolish.