As the recession drags on, consumers are hunting for more ways to stretch their dollars. Not all spending cuts are equal, however.
As the recession drags on, consumers are hunting for more ways to stretch their dollars. Not all spending cuts are equal, however. There are times when being frugal can actually cost you a lot more money in the long run than any short-term savings. Consumer gurus point to a number of not-so-wise cost-cutting moves.
You might be tempted, for instance, to skimp on your car maintenance. Bad move, say automotive experts. Postponing oil changes may save you $40 or $50, but a build-up of dirty oil could ruin your engine, setting you back thousands of dollars for a new engine or even a new car. Not having your tires checked and rotated may also save a few bucks, but will most likely hasten the day when you’ll have to shell out hundreds of dollars for new ones. With most of today’s cars, however, you can stretch the time between tune-ups, saving $250 to $300.
Another cost-cutting mistake is to lower the amount of insurance on your house. You may think that move is justified because the value of the house has gone down, but housing experts point that the cost of rebuilding the home has actually gone up. If the house isn’t insured for the full replacement cost when disaster strikes, your insurance company may prorate any reimbursement. A better way to save on house insurance is to bump up your deductible, which could cut as much as 25% off your premium.