When penny-pinching doesn’t pay

“There is a big difference between being financially prudent and trying to save money by taking short cuts and picking the cheapest product or service,” said Eunice Sibiya, head of Consumer Education at First National Bank.

Sibiya urges consumers to avoid penny-pinching, as that will save you in the long run. She said buying in bulk may seem like a great idea, goods are usually cheaper in bulk, but it doesn’t mean that it will necessarily save you money long-term.

“It is easy to get swept away when you see the lower prices of bulk products, but go through a few check lists in your head such as, do you have storage space for it, what is the expiry date and will you end up consuming more just because you now have a product that is easy to access?” cautioned Sibiya.

Don’t be tempted to buy luxury consumables in bulk such as chocolates, biscuits or soft drinks, she said. “This will lead to consuming more of these products than you would usually do if you buy them individually as a treat.”

She advised consumers to only buy products in bulk that are used on a regular basis and check the expiry date. “A low discount on tinned chickpeas may seem great at the time, but unless you know your family eats chickpeas on a regular basis, you will soon be stuck with tins of produce that have expired, take up space and ultimately need to be thrown away.”

Stick to items that you use regularly, such as household cleaning products that you know you won’t end up using more of just because they are in easy reach.

“Cutting out vital insurance such as car, household or life policies to try save a buck or two is very risky,” warned Sibiya.

She urged consumers to take a hard look at their circumstances. If you are young and single without a car or home, you may be able to get away with no insurance, she said. However, if you have responsibilities such as a family, car and home or household goods, it is never worth the risk to skip or skimp on insurance.

Sibiya said taking the cheapest option for any services, from redoing your bathroom to servicing you car, is not always a good idea. “Rather see the service as an investment,” she added.

Trying to take cheaper shortcuts isn’t always in your best financial interest.