7 of the Worst Ways to Save Money

woman buying products in supermarket
Be wise when it comes to how you choose to save cash. | iStock.com/nd3000

Saving a large sum of money can be a real accomplishment, but it’s not uncommon to hit some bumps along the way. For some, saving money comes easily, but for others it can take great effort. Roughly 26% of adults have no savings for an emergency, and about 36% have not even started saving for retirement, according to personal finance website Credit Donkey.
This isn’t surprising, considering many consumers are struggling with high-interest debt and mountainous student loans. Consequently, many Americans are living paycheck to paycheck. This is a recipe for disaster because a financial emergency could strike at any moment. All it takes is a job loss, major illness, or divorce to significantly impact your financial well-being.
If saving doesn’t come naturally to you, this might have caused you to look for shortcuts, so you could stash more cash in your bank account. You’re determined to save a few dollars by any means possible. If you’re looking for ways to save money, good for you. However, there are some methods you should avoid when it comes to keeping cash in your wallet. If you’re not careful, you could harm your finances and even your personal life.
Here are seven of the worst ways to save money.

1. Always buying in bulk

woman with shopping list
Bulk doesn’t always save money. | iStock.com/tanialerro

Buying household items in bulk isn’t always the best move. If you live alone and don’t have frequent house guests, there’s no need to pay for a membership at a warehouse club. You’ll just end up spending more money in the long run. Let’s be realistic. Are you really going to use these bulk items in a reasonable amount of time? And where are you going to store all of this stuff?
Jeff Yeager, author of The Cheapskate Next Door, also points out that just because an item is from a warehouse store doesn’t automatically mean you’re getting the best price. “Warehouse stores rarely have the best prices on groceries and other items. Shopping the loss leaders at grocery stores — aka ‘cherry picking’ — with or without coupons is widely accepted as the best way to score the absolutely lowest prices on groceries,” Yeager said in the book.

A better way to save

banking and people concept
You can save money when you buy generic. | iStock.com/dolgachov

It’s sometimes more cost-effective to hunt for individual deals than to buy bulk items you might not use entirely. You can save a bundle by purchasing generic products whenever possible. Research shows generic items are just as good as brand names. A grocery store survey conducted by Consumer Reports found some store brands rival more popular brands in the taste and price categories. You can save up to 25% when you switch to a store’s private-label brand.

2. Applying for a store credit card

credit card
Store credit cards could spell big trouble. | iStock.com

Many stores will try to lure new customers by offering a discount (usually about 10% to 15% off) if they apply for a store credit card. However, this is not a smart way to save money. Adding another credit card to your wallet will likely tempt you to spend more. If you already have a lot of credit card debt, this could make your situation worse.
In addition, interest rates on store cards tend to be higher than traditional cards. A survey by CreditCards.com found the average APR on retail-branded credit cards was 23.84%. Nearly half had an APR close to 25%. These rates are much higher than the national average of 15.5%. So digging yourself deeper into debt so you can save 10% doesn’t make much sense.

A better way to save

woman searching what to wear in a wardrobe
Do an audit of your closet. | iStock.com/DeanDrobot

It’s tempting to apply for a retail credit card when you’re at the mall. You might see an outfit you love at a price that doesn’t fit your budget, so a store card with a discount might look very appealing at that moment. Instead of applying for a store card so you can get a deal, try staying home and shopping from your closet. It’s likely there are several items you’ve either never worn or have only worn a few times. Do an audit of your closet to see what you already have. This way, you can avoid purchasing items you don’t really need.

3. Skipping retirement savings

retirement label on jar filled with coins
It’s best to start saving early. | iStock.com

We’ve said it before, but we’ll say it again: Save for retirement. Although you can take advantage of catch-up contributions, it can be harder to save as the years go by and financial obligations compete for your attention.
Fidelity gives an example of someone who starts saving for their golden years at age 25 rather than 35. The hypothetical saver who starts squirreling away retirement savings at 25 (assuming an annual $5,000 contribution and tax-deferred compounding with an annual return rate of 7%) will have more than $1.6 million by the time he or she retires. However, the saver who starts 10 years later, at age 35, will only have $796,687. Think of your future self when you’re tempted to skip retirement savings to save money.

A better way to save

pink piggybanks
Save what you can. | iStock.com/AndreyPopov

Don’t make excuses for why you can’t save for retirement. You’ll be sorry you didn’t start earlier. Start contributing to your retirement fund as early as possible. If your employer offers a matching contribution, this is even more of a reason to contribute. If you don’t, you’re basically leaving free money on the table. So, if money is tight, contribute at least enough, so you can qualify for your employer’s match. Who doesn’t like free money?

4. Skipping emergency savings

man holding money
Don’t skip savings. | iStock.com/Alen-D

The best way to prepare for life’s “gotchas” is to have an emergency fund. Skimping on — or skipping emergency savings altogether — is a risky move. Life is unpredictable, and your next financial emergency could be just around the corner. It’s better to be prepared and rest easy, knowing you have a healthy cash cushion, than to scramble and reach for the credit cards whenever you’re faced with tough financial times.

A better way to save

piggy bank with dollars
Start with small savings goals. | iStock.com

Instead of ignoring your savings fund, save what you can. Although most financial experts recommend saving anywhere from 10% to 15% of your take-home pay, that’s not a realistic goal for everyone. Even if you can only put aside $20 a week, it’s a start. Take slow steps toward building your emergency cash cushion. You can even ask a friend or family member to be your “money buddy,” so you can be held accountable for your savings goal.

5. Relying on the dollar store

woman holding open wallet with pensive expression
The dollar store could spell trouble. | iStock.com/fizkes

You can get almost anything at the dollar store. For some consumers, it’s the primary way they stretch their paychecks each month. Shopping at the dollar store for most of your household needs might sound like an obvious way to save, but it could cost you. Researchers have found many dollar-store products contain carcinogens. So, you might solve your money problem but end up with an expensive, incurable disease. That doesn’t sound like such a great trade-off, does it?

A better way to save

hands of a young woman using mobile phone
Look for deals. | iStock.com/imtmphoto

Instead of shopping for everything at the dollar store, make an effort to look for deals at your local supermarket. Also, take time to search for coupons. In addition, choose generic over name-brand items whenever possible. It might take a bit more work to replace your dollar-store deals, but it will be worth it, considering the potential health implications.

6. ‘Borrowing’ office supplies

man using office pen
Don’t take that pen. | iStock.com/gpointstudio

Don’t attempt to save money by pilfering from your employer. This is a quick way to get yourself into hot water. Sure, you might love the smooth, office toilet paper or those clickable pens, but they don’t belong to you. Deliberately taking items from work is theft. And if your supervisor finds out, you could be fired for stealing. Saving a few bucks in pens isn’t worth losing your job.

A better way to save

pencils in a cup
Buy your own supplies. | iStock.com

There are better alternatives to taking supplies from the office. If you enjoy those supplies that much, find out where your office manager purchased them, and get your own stash. When you’re ready to make a purchase, you could mention your employer is a customer and try to negotiate a discount. That way, you’ll save money and your job. It’s pretty much a win-win all around.

7. Skipping credit card payments

credit cards over grey background
Don’t skip payments. | iStock.com/Kenishirotie

Have you skipped a payment here and there because you were having financial trouble? This could eventually ruin your credit score. And a low credit score could significantly affect your ability to get the best rate on a car loan or even qualify to purchase an apartment. Payment history accounts for 35% of your FICO score. Missing payments has a big impact on your score, so you should aim to pay in full and on time every time.

A better way to save

buying online with a credit card
Man makes an online purchase with a credit card. | iStock.com

If you’re having trouble keeping up with your credit card payments, don’t keep it to yourself. Inaction due to fear or embarrassment will just lead to your account being turned over to a debt collector. Then, you’ll have a whole other set of issues. As soon as you see you’re having trouble keeping up with payments, call your credit card issuer. The representative might be able to change your due date or connect you with a certified credit counselor, so you can discuss your options for managing the debt.
Follow Sheiresa on Twitter @SheiresaNgo.