Personal Finance

Things you should never skimp on to save money

Qualified mechanics often will warranty parts and work - something you might not get if have your work done another way.
Qualified mechanics often will warranty parts and work - something you might not get if have your work done another way. MCT

Cutting costs is a good idea if it means getting spending under control, so you’ll have more money to pay down debt, build savings or achieve other financial goals. But your cost-cutting efforts can backfire if you opt to pinch pennies on the wrong things.

There are several products and services that are worth paying a little more for because the cheaper alternatives could cost you additional cash in the long run. Here are six things you probably don’t want to skimp on just to save money.


One way that people find themselves paying more over the long run is by opting for only the minimum amount of auto insurance coverage required by the state. It might make it cheaper to own a car, but if you get in an accident, you could end up forking over a lot of money.

“Paying for car insurance isn’t exactly something that people enjoy, but skimping on your policy can really cost you down the road,” said Neil Richardson, a licensed insurance agent and expert at car insurance comparison marketplace The Zebra.

For example, if you live in Texas and have just the minimum coverage for $25,000 in property damage but total someone’s new truck that’s worth $50,000, you could be on the hook for the difference, Richardson said. He recommends adding comprehensive and collision coverage (if you have a vehicle that hasn’t depreciated significantly), uninsured motorist coverage and ample liability coverage.

“More complete coverage does not have to be more expensive,” said Chris Long, an insurance agent and founder of Longevity Insurance Brokers in Denver. You can keep costs down by getting a discount for bundling multiple insurance policies – such as auto and home insurance – with one company. He also recommends asking your insurer about discounts for factors such as a good driving record or good grades earned by teen drivers.


When it comes to car repairs, there are certain items you should never skimp on, said Nicole Firebaugh, manager of Preventative Maintenance Repair in Marion, Ill. First, you should do your research before buying any parts for your car to ensure that you get the right type for your vehicle.

“Putting the wrong types of materials in your vehicle can cause parts to go bad quicker or cause damage to other parts,” she said. Additionally, you should check out the warranty on any product you purchase. “It might be an extra $50 to have five more years of a warranty, but that is five more years your part is covered. Just be sure that you research what the warranty actually entails, so that you do not get in even more trouble down the road.”

Finally, don’t avoid going to a mechanic just to save money.

“Even if you have seen the YouTube video or gotten advice from your local auto store expert, some things are better left to the expert,” Firebaugh said, adding that many mechanics will provide a warranty for parts and labor, so you’re covered if anything goes wrong.


The recent flooding in Louisiana offers a stark reminder that skimping on insurance can leave you financially unable to repair the damage from a natural disaster. Standard homeowners insurance doesn’t cover flood damage; this type of policy has to be purchased through the National Flood Insurance Program. Yet, only 21 percent of Louisiana residents have flood policies, according to the Louisiana Department of Insurance. So, those without coverage are left paying for losses from the recent flooding on their own.

Nationwide, just 12 percent of homeowners have flood insurance policies, according to a 2016 survey by the Insurance Information Institute. On average, a flood insurance policy costs about $700 a year, according to FEMA. That might seem like a lot, but it’s a fraction of the average paid flood claim, which is $31,000. And if you don’t live in a high-risk area, you could get coverage for as little as $137 a year, according to FEMA.

Standard homeowner policies also don’t provide coverage for other disasters, such as earthquakes, mudslides and sinkholes, according to the Insurance Information Institute. The organization recommends checking your policy to see which disasters are not covered. You might be able to add a separate policy to cover events such as earthquakes.


If repairs need to be made around your home, taking the cheap option could be an expensive mistake. In particular, don’t skimp on anything related to leaking water and water damage, said Justin Pritchard, a financial planner and personal finance writer.

“Water can cause rot and mold, and fixing those problems gets expensive,” said Pritchard, who has first-hand experience dealing with water damage in his home. “In addition to fixing whatever gets damaged by water, you’ll need to replace drywall, repaint and pay other finishing costs.” If you ignore the problems, it could be hard to sell your home down the line.

To keep costs down, Pritchard recommends asking the contractor what tasks you can tackle in advance, so he doesn’t have to charge for time spent doing things other than fixing the problem. Also consider buying high-quality materials for your contractor, he said. It might cost more upfront, but you don’t want to use substandard materials that have to be replaced soon.

Above all, be wary of offers from contractors who show up at your door offering to seal your driveway, fix your roof or make other repairs at hard-to-resist prices. They could be scammers who use subpar materials or who take your money and run, according to the Better Business Bureau. Before hiring contractors, the BBB recommends finding out if the companies are insured and bonded, researching them at and getting several quotes.


If you’re a renter, you shouldn’t try to cut costs by skipping on renters insurance. Mike Delgado, director of social media at the credit bureau Experian, said he made the mistake of not paying for renters insurance for years.

“I thought I was being frugal by not paying that monthly fee,” he said. “And then someone broke into my garage and stole my not-so-frugal mountain bike.”

Don’t assume that your landlord’s insurance policy will cover your personal property – it won’t, according to the National Association of Insurance Commissioners. However, a renter’s policy will pay to repair or replace your items if they are damaged or stolen. And the cost is just $15 to $30 per month, according to NAIC.

Delgado said that if he had renters insurance, he would’ve paid only a small insurance deductible after the theft, and the policy would have covered the remaining cost of replacing his bicycle.

“Overall, I could have saved several thousand dollars by just paying 12 bucks a month,” he said.


When it comes to your safety, or your family’s safety, opting for the least expensive products to provide protection might be downright dangerous. For example, properly made bicycle helmets that fit correctly can save lives and prevent brain injuries, said Julie Rains, road cyclist and founder of the blog Investing to Thrive.

“I had friends who hit their heads on pavement at 15 to 20 mph and walked away from crashes,” she said, adding that it’s best to buy a helmet from a bike shop where you can be fitted and shown how to wear it properly.

It doesn’t have to be the most expensive, high-end version, which would likely be one designed for racing, she said. Instead, ask for a good helmet that is affordable – perhaps even last year’s model that’s on sale.