There’s a Right Time to be Frugal

Everyone likes a good deal—but when do penny-pinching ways becoming too much?

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Looking for coupons and discount codes to snag good deals makes good financial sense, but experts say sometimes it’s acceptable to splurge a little.

“It doesn’t make sense to be frugal all the time,” says Jelena Ewart, a credit card expert at personal finance website NerdWallet. “We can achieve a lot more in terms of happiness if we have a little fun.”

There are also times when the cheaper alternative can cost more in the long run.

Take health care, as an example: Forgoing the medication your doctor prescribes to save money can cost you more in care when your health suffers down the road.

“This is penny-wise, pound-foolish, because you may end up with larger health bills down the road,” says Paula Pant, operator of the affordanything blog. “Besides, the purpose of money is -- at its core -- your health and survival.”

She says other moves like holding onto mascara after an eye infection or buying unhealthy meals because they are cheaper fall under the same umbrella of frugal moves that could cost more later.

According to Ewart, often people will evaluate the savings they are getting on a new home purchase the same way they look at the discount at a restaurant, which could get them in trouble, particularly if they walk away from buying a home they love because the discount isn’t large enough. “Saving 10% on a car is a much bigger difference than saving 10% on a t-shirt,” she points outs.

When it comes to buying expendable items, frugal people are often quick to get the cheapest, without thinking about quality. Going with the lowest price on a one-time use item usually makes sense, but for longer-use products, quality should be taken into account with the price.

“If you are purchasing an article of clothing that will likely fall apart in one season, it might not be a good deal,” says Ewart. When determining how to much pay, says recommends consumers evaluate how long they are going to use the item and how long it will realistically last.

Pant says living a truly frugal lifestyle goes beyond saving a $1 or $2 on mundane purchases.

“People like to pat themselves on the back for saving $2 by switching to generic laundry detergent, and sure, that's great. But at the end of the day, if you're buying brand-new cars and living in a sprawling McMansion, you're not really making any progress, no matter how cheap your laundry detergent might be,” she says.

To truly slash a budget, she recommends cutting back in these areas: housing, transportation and food. Downsizing to a smaller home, buying a used car and driving it into the group and only eating out for special occasions can bring significant savings to a budget.

“Our attention and energy is limited, and it should be directed to the highest-value activities. Trim your budget in the big way -- like by picking an economic housing situation -- but don't obsess over nickels and dimes,” says Pant. “Instead, focus that energy on working overtime, picking up a second job, or learning how to invest.”

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