How to Be Penny Wise but Pound Foolish

Have you ever hear the phrase, “Penny wise, pound foolish?” Mom used to use it (among many others!). It means that you are watching your small stuff like a hawk but not taking care of the big stuff. Sometimes it means that by refusing to spend a bit now on something it costs you big time later on.

Here are some examples, and some stories of times I’ve been penny wise and pound foolish.

Saving money with free internet security software but then having to buy a new PC when a virus destroys your old one.

This happened to me in 2011. I surf the net a lot researching items about which to write. I used the free anti-virus software provided by my internet service provider and it failed big time. I ended up contracting malware that eventually destroyed my laptop AND my desktop – costing me big time for technical diagnosis, repair and replacement.

Opening multiple credit cards for rewards points then losing money on interest payments because you don’t pay off balances each month.

This one I don’t do!

Refusing to hire an expert or a consultant and then losing out on money making opportunities because you don’t know what you are doing.

I’m in denial on this one. I should hire help with SEO and web design, but I still want to learn more about it myself. I’m sure it is costing me in page views and visitors and in revenue.

Doing work yourself when you could be using your time more productively by hiring someone else to do the lesser skilled jobs.

Hubby and I are big on doing things ourselves – when we feel like it. When we don’t, things usually don’t get done at all. I probably should hire the house cleaned, but still spend time on that.

Avoiding a profitable transaction due to expected negative tax consequences.

We are into this one big time. We have avoided taking investment profits due to the thought of having to pay taxes on the proceeds! Bad, bad, bad on us.

Refusing to pay for addition training or education now to earn a bigger paycheck later.

Not guilty on this count!  I paid to go back to college to learn computer programming and paid multiple times throughout my career for added training and certification.  I did get a much bigger paycheck because of it!

Buying a cheaper house in a sinking neighborhood with lower rated school districts and then selling at a loss and having to pay a tutor to catch your kids up to where they should be in school.

Our first home was in a declining neighborhood and a declining school district. It was only $10k cheaper (which was about 30% at the time) than homes in a rising neighborhood with highly rated schools. We got out after 10 years, right before the whole area went into a fast downward spiral.  I didn’t have to hire a tutor (I have smart kids :D!)

Pouring over coupons for hours to shave a few cents off the grocery bill and then not having time to move on that money making deal.

Not guilty. I buy generic and save money in other ways at the grocery store. However, I will look around for coupons on big ticket items.

Have you ever been penny wise and pound foolish? I’d love to hear about it in the comments.