I see a trap many hardworking smart people fall into to save money. You’ll see these posts pop up from popular budgeting blogs about “easy” ways to save money. One that I thought was particularly egregious was about how to optimize loading your dishwasher. As if running only full loads will make you a millionaire. Please. I find a lot of these posts to be penny wise and pound foolish.

To me, being penny wise and pound foolish means doing an optimization activity that takes an inordinate amount of time and ongoing effort for little gain.

Here are 5 “penny wise and pound foolish” things people do and what to do instead.

#1 Clipping coupons

I used to clip coupons. Like, actual paper coupons that came in the mail and the Sunday paper. It was the main reason we had a newspaper delivered. There would be a lot of stress and organizing put into the coupons. The effort of carefully clipping coupons was so time consuming. I’d spend at least an hour going through and clipping coupons and making myself a list of items I needed at the grocery store and putting an asterisk next to the items that had a coupon. Then, remembering to use them, weeding out the expired ones, standing in the aisle of the grocery store trying to figure out which size jar met the requirements of the coupon. Yuck.

I canceled the newspaper subscription, which alone, probably amounted to all the savings I would get from clipping coupons. Also, I refuse to spend more than a couple of minutes finding coupon codes for online purchases. If I can’t find a relevant coupon for [Shutterfly] after a 5 minute search I either won’t make the purchase or just suck it up and pay for shipping.

Do this instead:

Buy store brands. We’re big fans of Costco and we regularly buy the house brand, Kirkland. The house brands are usually just as good (or better) than the national brands and are cheaper because you aren’t paying for marketing costs.

Another cost savings I’ve found helpful is making a list of things we DO NOT NEED. Have you ever been at the store and debated to buy something because you weren’t sure how low you were running, if at all? This trick saves me the hassle of buying extra of something we don’t need and risk that spoiling before we can get around to consuming it or taking up valuable space.

#2 Driving out of my way to save $.10 a gallon on gas. Or even $.25 a gallon

This one kind of blows my mind. I absolutely refuse to be hamstrung by paying a fraction of a dollar less for gas. Typically, we shop at Costco about twice a month. We fill up there whenever we shop. In between, we fill up wherever is most convenient. I am not about to use an app or drive around to find the cheapest gas.

Do this instead:

Take time every year to review your homeowners/renters/car and umbrella insurance policies. Your rates can go up a lot in just a year. If you shop around or bundle your policies you can save hundreds. The commercials are true. My parent’s insurance premiums went way up. I called their insurance agent and we were able to save almost $300 by having them sign up for a safe driver monitoring program and a couple of other loyalty discounts.

#3 Not using the dishwasher (enough)

I literally let out an audible angry groan when I come across a TikTok showing people how to Tetris in dishes to fill their dishwashers. The idea being that by running a full load they are saving on energy and water costs. Sure, you’re going to save some money by running full loads. BUT, modern dishwashers only use about 3 gallons of water and less than twenty cents of electricity to run per cycle. And then there’s the detergent. But seriously, if you’re hand washing dishes, pots and pans to save money, you are being penny wise and pound foolish. Just run the dishwasher. If you are washing your dishes before putting them in the dishwasher, stop. Scrape off anything bigger than a grain of rice and put them in. If they come out dirty, run the dishwasher again. Financial freedom won’t elude you because you ran the dishwasher.

Even if our dishes, pots or pans are handwash only, I still put them in the dishwasher. There are a few things I won’t put in such as an olive wood ladle we got from Greece. Its special. Everything else either survives the dishwasher or doesn’t. If pots and pans get ruined, I buy new ones that are dishwasher safe. Running the dishwasher instead of handwashing is going to save you time. Time you can use to do something more worthwhile.

Do this instead:

Learn to do a couple of common home repairs and maintenance. For example, if your dishes are always coming out dirty, perhaps the sprayers are clogged or the filter needs a rinse. You can YouTube most ways to maintain an appliance like your dishwasher. A little maintenance will save you a lot of time and money by extending the life of your appliance and getting more and better use out of it.

#4 Taking advantage of sales or BOGOs

My cousin and I love to reminisce about a funny thing our moms would do. Our moms both worked in retail and they would buy things that came up on sale or clearance at their stores. My mother would routinely come home very proud of her latest purchase. She would ask us, “Guess how much I paid for this?” Mostly, we’d reply back with a number we knew was too high and act amazed at the price she did pay. She’d always be so detailed with all the discounts she was able to wrangle.

I remember this one time my father wasn’t so accommodating. She had bought a set of sheets at an impressive discount. But, instead of amusing her, he challenged her. We had a closet filled to the brim with linens – some still in their original packaging. “Wouldn’t you have saved even more money by not buying them at all?”

Sure, if Costco is having a special on diapers and wipes, we’re loading up. However, when it comes to more durable items, especially clothes, shoes, linens, dishes etc., buying an extra pair of shoes or shirts you don’t really need isn’t saving you any money regardless of how cheap they are. It’s costing you money. If you look around your home and in your closets and drawers, how many of those items were bought just because they were on sale? All those things sitting idle cost money.

Do this instead:

If its not something you had originally set out to buy, don’t buy it. In the long run you’ll find fewer cramped spaces at home and more money to invest. If you do find yourself saving even $5 by not buying into a BOGO, put those savings to work by investing it.

Here’s a good one; remember to do your returns!! We buy a lot of things off Amazon. This works out well for us most of the time, but sometimes the item isn’t what I expected and its something we need to return. Just performing your returns will save you space and money.

#5 The promotional cash reward for opening up a bank account or getting a (slightly) better rate

I’m in a lot of personal finance groups and recently there’s been a lot of posts regarding optimizing the interest rate your money earns in checking or savings accounts or “epic” promotional offers for opening a new bank account. Yeah, you could earn a little more on your checking or savings account, or even get a $300 bonus for a new account at a bank and keeping a high balance. Is it really worth it, though? We have a lot of our bills automated to be deducted from our checking account. If I switched banks, I’d have to set all that up again. The chances I forget an account are pretty high and late payment fees are even higher. Plus, the risk of my credit score getting dinged because of late payments… Just not worth it.

Do this instead:

Instead of searching out the latest and greatest interest rate and switching banks, move the majority of your savings into I Bonds. I Bonds are sold by the US Treasury and are meant to keep your money up with inflation, automatically.

We keep a “working amount” of money in checking and savings on an ongoing basis to pay our ongoing bills. Capitalizing on an extra .5% in interest by switching banks wouldn’t even get us a cup of coffee at Starbucks. Not worth my time or mental energy to worry about. Instead, I focus my energy in making sure our money is put to work in investments. Make sure that you aren’t keeping too much money in bank accounts or I Bonds. I Bonds won’t make you rich. You can’t save your way to wealth. Take your extra savings outside of emergency funds and working capital and invest it.

Penny wise and pound foolish no more

What you have probably noticed at this point is that I refuse to do the money saving things where I’m expending a lot of energy and time to save small amounts of money. Your time and mental power aren’t best spent on an entire Saturday morning opening up a new checking account and reassociating automatic withdrawals and deposits so you can get an extra $23 a year in interest.

There are so many ways we all tend to be penny wise and pound foolish. Focus your efforts into saving (and earning) meaningful amounts of money. Smart people can get carried away optimizing in ways that aren’t always optimal. Remember to ask yourself if what you’re doing is going to produce a meaningful gain from the amount of time it takes to earn it.

Cheers!

Mrs. Moneyaire

If you want to add to the penny wise/pound foolish things that annoy you, leave a comment below.