14 Savings Hacks That Don’t Always Work

Have you ever jumped through hoops to save money, only to find you paid more – or, wasted a bunch of time?

Maybe you misread the terms on a coupon, signed up for a fake or deceptive promotion, or just made a poor decision. Either way, it’s frustrating when you discover your money-saving efforts weren’t worth it, or that you were purposely misled.

Despite the fact I can read and count, I’ve been there more than once. But there’s one incident in particular that still stings.

When my husband and I were first married, we were invited to a cookware presentation with the promise of a free $300 travel coupon. All we had to do was sit through the presentation to earn $300 off travel, they said. And no matter what, we didn’t have to buy anything.

We were young and dumb at the time, so we assumed the $300 voucher would come in the form of a gift card. We sat through the entire high-pressure sales pitch feeling extremely uncomfortable, only to find the “$300 voucher” was only good toward a small list of crazy, overpriced vacation packages we would never want in the first place.

So basically, we wasted two to three hours of our lives for nothing, all under the guise of “saving on travel.” Lesson learned, and I know I’ll never do that again.

Unfortunately, these types of things happen all the time. Whether it’s because we fail to read the fine print or we make a short-sighted decision based on few facts, there are plenty of savings hacks that just don’t work.

If you want to avoid wasting your time and money, it’s smart to explore certain money-saving hacks ahead of time to see if they’re legit – and if they’re actually right for you. Here are some other savings hacks that don’t always work the way you think they will, according to more than a dozen financial bloggers.

#1: Investing in actively managed funds without taking fees into account

Paying more for an actively managed mutual fund instead of an index fund in hopes of better returns usually doesn’t work out, says Larry Ludwig of Investor Junkie. “Statistics show that after five years, 80% of actively managed mutual funds don’t beat the index. In addition, the amount you pay in fees is typically equal to or greater than the return the mutual fund generated above the index,” he says. “It’s a fool’s errand trying to figure out which mutual fund will be the best performing fund.”

#2: Using coupons to save money without a plan

“I loved using coupons and for years they helped us get out of debt,” says Lauren Greutman. “They became a problem when I started buying things that I didn’t need just because I had a coupon for them. The result was spending more money.”

#3: Taking advantage of introductory deals without watching the post-promotion terms

“We recently switched our electricity supplier to take advantage of a very inexpensive six-month fixed rate, which resulted in immediate savings,” says Jim Wang of Wallethacks.com. What we didn’t realize was that after six months, the rate would be variable and it ended up being twice the regional average!”

#4: Working too hard for too little

“In an attempt to earn us some extra cash, I signed us up for this home scanner that will earn you gift cards after you’ve made a certain amount of scans every month,” says Jessi Fearson. “It was ridiculous of me to think that, as a mom of three kids under three years of age, I’d have the time or the energy to scan every single thing that we purchased to earn a measly $10 in gift cards. I was putting in way more time and effort than that $10 gift card was worth.”

#5: Using travel deal sites without checking prices

“I’ve signed up for travel alerts in order to find good deals on hotel stays. Rather than uncover great deals, though, the sites typically don’t offer prices better than basic searches deliver and end up wasting time,” says Julie Rains of Investing to Thrive. “For me, it’s generally easier to book cancellable reservations directly with a hotel. If my travel plans change, I don’t owe money; and if prices fall, I can rebook to save money.”

#6: Paying off a mortgage early to save money on interest

“I paid off my mortgage early because it reduced the total interest costs on the loan. However, the next year my investments doubled and then doubled again after that,” says Todd Tresidder, wealth coach at FinancialMentor.com. “I would have been far better off investing the money and just paying the mortgage interest according to schedule.”

Related: Should You Pay Off Your Mortgage Early?

#7: Falling for a wonky rebate

“I saw an ad for an electronic device that had a reasonable price (about $200), plus they gave vouchers of $90,” says Assaf Katzir, co-founder at CreditPilgrim.com. “Sounds like a great bargain. Only later when I wanted to use the vouchers, I found out that the vouchers were split over six months – meaning each voucher had the value of $15 and could be used only in the specified month on the voucher.”

#8: Justifying a purchase because it’s on sale

“I think we’ve all been guilty of this at least once in our life. We decide to purchase something we really don’t need and justify it because it was such a great deal we couldn’t pass it up,” says Kansas City Financial Planner Clint Haynes. “Well, just because you saved some money doesn’t take away the point that you actually just spent money as well. Remember, even when you purchase items are on sale, you’re still actually spending money.”

#9: Trying a new type of budget without assessing your needs

“The best example of a savings fail was using the envelope system. This was for the son of a friend of mine,” says Neal Frankle of WealthPilgrim.com. “The young man was a chronic spender. The problem was, once he had the envelopes for the variety of expenses, he’d invade them all and use up the money long before the month was over, and of course then he was unable to pay his bills. What he needed instead was a daily allowance – not monthly.”

#10: Investing your emergency fund for short-term gain

“A few years back I had several thousand dollars saved for a big move I was making across the country. I figured it may be a good idea to invest that money (which I wouldn’t be spending for a few months) in a portfolio of ETFs that looked great at the time,” says Seattle-based financial advisor Josh Brein, author of The Art of a Plan.

“‘I’ll just stash the money here and let it grow until I need to take the money out in a few months’ was the rational I used to justify this idea,” Brein says. “My plan didn’t work out so well. We hit a volatile patch in the market shortly after I invested, and by the time I needed to take my money out to spend it, I had lost about 20% of my savings for my cross country move because of market volatility that I could have avoided by not being greedy and trying to grow my emergency fund in the stock market.”

Related: Should You Invest Your Short-Term Savings?

#11: Using Coinstar as part of any savings plan

“My wife and I had a saving plan to keep all our spare change in a paint can, and we successfully saved over $300. We found out that our bank and credit union wouldn’t accept the change unless it was rolled. So, we took our spare change to the Coinstar machine,” says Jose V. Sanchez of LifeInsuranceToolkit.com.

“The fees are incredible – you pay $11 for each $100 you save,” says Sanchez. “To avoid the fee, we accepted the eGift Card, spent some of the money, and the rest (six years later) has expired. Net result, we saved zero.”

#12: Speculating about government laws and currency

“In college, I got into saving pre-1972 pennies because they were made of more than 90% copper. The plan was to amass a large amount of copper pennies and then one day melt them down and sell the copper (the copper inside a penny is worth more than $0.01),” says Nick True at Mapped Out Money.

The trouble is, it’s currently illegal to melt pennies and nickels. “I was spending hours sorting through thousands of pennies by hand all in hopes that it will one day be legal to melt discontinued pennies,” True says. “It was a major waste of time on a very unlikely policy change.”

#13: Saving money by performing tasks you’re not qualified to do

“When I launched my business, I did everything I could to cut corners and reduce expenses. One of those corners was doing things on my own instead of outsourcing them,” says Taylor Schulte of Stay Wealthy San Diego.

“For instance, I figured I could save around $200 a month by doing the bookkeeping myself. While technically I was ‘saving money,’ the time I spent playing bookkeeper (and graphic designer, and editor, and administrator) was taking me away from actual revenue generating opportunities. It used to seem backwards, but I’ve now learned that spending money to create more time for things I’m good at makes a much bigger impact on my bottom line.”

#14: Price shopping without considering value

“When my wife and I got married, we were naturally looking to consolidate our auto insurance. She had the same agent for years who was captive with a major auto insurer. Being a ‘wise’ financial planner, I figured this wasn’t the best we could do,” says David Wilson of FinancialTruths.net.

“I matched hers against the cheap car insurance I bought online; her agent’s price was better – and still is. His agency now handles all our stuff,” Wilson says. “When I call, someone answers. When I buy or sell a car, or add a teenager (yikes!), it’s never a big deal. I recently needed info on my homeowner’s policy. I emailed, and the declaration page showed up in my email box within five minutes.”

At the end of the day, Wilson says, value is more than just price. “If you’re getting great service and a fair price, don’t waste time and energy price shopping like I did!”

The Bottom Line

It’s a crazy world out there, and we’re bound to make mistakes. Fortunately, most small money mishaps won’t know your entire financial plan overnight.

Still, it’s important to stay diligent out there. Not all “deals” are worth it, and some are even predatory. Before you employ a new strategy to save money, make sure to run the numbers and read all the fine print.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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