MONEY TALK: Don’t be penny wise, pound foolish
Posted on 24 February 2014 - 05:36am
I WAS busy reading other financial blogs when I stumbled upon this particular phrase, and it stuck to me. "Penny wise, pound foolish" – an old British saying referring to someone who goes to great lengths to save money, but ends up spending more than what he is trying to save.
It suddenly dawned on me why most Malaysians didn't feel secure about their finances, despite being free from debt – most Malaysians fit this description right down to a tee.
If you think you do too, then here are a few things you might be doing wrong:
You Take Advantage of Freebies Who doesn't love free stuff?
Nobody, that's who.
Whenever you feel the need for coffee, you think about that premium latte you can't live without.
But you can't be spending RM10 on coffee, every day, can you?
So you go to the office pantry and drink packets of those premixed coffee.
This happens every time you feel the urge to spend on a pricey cup of coffee.
The result? Diarrhoea. Migraines. Insomnia.
In short, your health pays for the benefit of "free" or very cheap coffee.
That's the problem with most of us.
We think that free stuff is awesome.
Initially, yes. But in the long term? Not so much.
Treat Your Expenditure Like an Investment. Would you invest in a home at a non-strategic location or a lousy stock just because it's cheap?
No, you would have crappy returns.
It's best to think of quality rather than being satisfied with a "good bargain".
Speaking of Bargains ...
Maybe you've stumbled across crazy cheap deals during your obsessive searches online, and one of your worst purchases happened to be this set of DIY bookshelves.
The set looked awesome in the picture, and fitted so well into your bedroom.
It was so cheap you bought it without second thought!
You were saving so much money compared to buying one from a furniture store.
So, the shelves came in. They were pretty easy to assemble – and just as easy to break.
In the end, you didn't use them at all. You bought them just because they were cheap, not because you needed them.
You're Lazy You aren't making the most out of the goods and services you pay for every month.
Your health card gives you free general check-ups every year, but you think it's a hassle to go.
You have a tonne of excuses for why you still haven't checked online comparison portals to see if your credit card is the right one for you – just because doing online research seems tedious.
You'd have come up with better solutions to your financial woes if you'd only stepped out of your comfort zone sooner rather than later.
Change Now If you exhibit signs of being a penny-wise, pound-foolish kind of person, here are a few tips to help you get through this challenging phase of your life:
1) Unlearn your false saving habits. Think long term.
2) Consider quality over cheap replaceable goods.
3) Persist! Just because you don't have debt or you aren't having financial trouble, it doesn't mean you must make careless decisions.
Practise these steps, and continue to learn more ways to handle your personal finances and, soon enough, you could be confessing you're a penny-wise, pound-foolish person no more!
Andreas Weileris a money-saving expert with Malaysian financial comparison platform, CompareHero, aimed at helping Malaysians save time and money.
For more tips visit www.comparehero.com.
It suddenly dawned on me why most Malaysians didn't feel secure about their finances, despite being free from debt – most Malaysians fit this description right down to a tee.
If you think you do too, then here are a few things you might be doing wrong:
You Take Advantage of Freebies Who doesn't love free stuff?
Nobody, that's who.
Whenever you feel the need for coffee, you think about that premium latte you can't live without.
But you can't be spending RM10 on coffee, every day, can you?
So you go to the office pantry and drink packets of those premixed coffee.
This happens every time you feel the urge to spend on a pricey cup of coffee.
The result? Diarrhoea. Migraines. Insomnia.
In short, your health pays for the benefit of "free" or very cheap coffee.
That's the problem with most of us.
We think that free stuff is awesome.
Initially, yes. But in the long term? Not so much.
Treat Your Expenditure Like an Investment. Would you invest in a home at a non-strategic location or a lousy stock just because it's cheap?
No, you would have crappy returns.
It's best to think of quality rather than being satisfied with a "good bargain".
Speaking of Bargains ...
Maybe you've stumbled across crazy cheap deals during your obsessive searches online, and one of your worst purchases happened to be this set of DIY bookshelves.
The set looked awesome in the picture, and fitted so well into your bedroom.
It was so cheap you bought it without second thought!
You were saving so much money compared to buying one from a furniture store.
So, the shelves came in. They were pretty easy to assemble – and just as easy to break.
In the end, you didn't use them at all. You bought them just because they were cheap, not because you needed them.
You're Lazy You aren't making the most out of the goods and services you pay for every month.
Your health card gives you free general check-ups every year, but you think it's a hassle to go.
You have a tonne of excuses for why you still haven't checked online comparison portals to see if your credit card is the right one for you – just because doing online research seems tedious.
You'd have come up with better solutions to your financial woes if you'd only stepped out of your comfort zone sooner rather than later.
Change Now If you exhibit signs of being a penny-wise, pound-foolish kind of person, here are a few tips to help you get through this challenging phase of your life:
1) Unlearn your false saving habits. Think long term.
2) Consider quality over cheap replaceable goods.
3) Persist! Just because you don't have debt or you aren't having financial trouble, it doesn't mean you must make careless decisions.
Practise these steps, and continue to learn more ways to handle your personal finances and, soon enough, you could be confessing you're a penny-wise, pound-foolish person no more!
Andreas Weileris a money-saving expert with Malaysian financial comparison platform, CompareHero, aimed at helping Malaysians save time and money.
For more tips visit www.comparehero.com.
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