17 Surprising Ways Penny-Pinching Costs You More

17 Surprising Ways Penny-Pinching Costs You More

By Gabrielle Olya

Frugal living could cost you in the long run.

It's hard to resist seemingly good deals when we see them, whether it's a bargain home in a pricey neighborhood, a tempting cable company promotion or a $10 T-shirt. But sometimes deals that seem too good to be true actually are. Although the initial investment might be low, it could end up costing you in the long term, whether through maintenance costs or missed opportunities to put your money toward a more worthwhile purchase.

GOBankingRates spoke to financial experts to find out which seemingly "good deals" you should always avoid. After all, if you're hunting down deals and steals, you want to make sure that they're ones that will pay off.

Purchasing a Home That Needs a Complete Renovation

You might be able to find a great deal on a fixer-upper compared to a move-in-ready home that could come at a hefty price. With the median home value in the U.S. recently hitting about $230,000, it might seem like a smart move to save money upfront by buying a cheaper home and fixing it up. But that's not always the case.

How This Might Cost You More

Martin Eiden, a licensed associate real estate broker with Compass Real Estate, uses the example of a property selling for $700,000 when neighboring, finished homes sell for $1 million.

"A newbie buyer would look only at the cosmetic work and say, 'I can put $100,000 into the property to bring it up to the $1 million (value) and save $200,000.' However, it is not as easy as it seems," Eiden said.

"You often need an architect to create and file plans — which can take months — and get city approval, which can also take months. In other words, it often takes six months of design and approval before work can begin. Construction can take another six to 12 months. During that time you cannot live there since it's a construction site, but you still have to pay for heat, water, taxes and a mortgage. Meanwhile, you have to rent an apartment for a year. As such, there are double housing costs."

Leasing a Car

Leasing a car is often "more affordable" than buying a car, but it could ultimately be a worse financial decision.

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