The top 20 biggest false economies

Scattered Women's Shoes And Purses
We're all keen to bag a bargain nowadays. With years of austerity under our belts, we have perfected the art of stretching our dwindling pay packets to cover our rocketing costs. However, in the pursuit of an ever-bigger-bargain, we are making some stupid mistakes which end up costing us more.

And now a study has revealed the 20 biggest false economies we're wasting money on.
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The study, by Gocompare.com found 20 flawed approaches - which fall into four categories - financial corner-cutting, focusing on price, forgetting maintenance, and simple money wasting.

Financial corner-cutting

Cutting corners when it comes to our finances is fraught with potential disaster. The biggest false economy was just paying the minimum off your credit card bill each month - which 54% of people said had wasted them money.

Claire Peate, customer insight manager from Gocompare.com, said: "Making the minimum repayment on a credit card bill justifiably tops the list of false economies and can be a very expensive mistake. Credit card issuers add interest to any outstanding balance so the longer you take to repay the debt, the more money you will owe them. For example, it could take up to 37 years to repay a debt of £5,000 if you only make the minimum repayment each month."

Third place went to lying on your insurance application to get a cheaper premium - which 48% of people said wasn't worth it. It stands to reason, given that insurers are dedicating millions to spotting lies, and when they find someone out they can cancel their cover - leaving them virtually uninsurable.

In fourth place was travelling without insurance - which 47% of people said was a ridiculous way to save money - especially when an illness or accident abroad could see you having to pay tens of thousands of pounds if you don't have cover. In 11th place was refusing to buy car breakdown cover.

Focus on price

The second major category is buying from the bargain bucket - because in many cases we get what we pay for. Buying cheap fakes which look terrible and fall apart made it to second in the list - with 51% of people saying they'd wasted money on this.

Buying cheap shoes was sixth, cheap paint was seventh and cheap toilet paper was eighth - which goes to show that it's worth spending some money on those essentials you'll notice every day. Other cheap options to be avoided seem to include cars (13th), bras (14th) and moisturiser (16th). Overall, the mistake of comparing only price, not quality made it to 10th place on the list.

Maintenance
The third category was cutting back on maintenance - which only results in breakdowns further down the road. Not having you car serviced was fifth on the list and not having the boiler serviced came 9th.

Waste
The fourth area was buying things which turned out to be a waste of money. This saw gym memberships in 12th place and mobile phone contracts at 15th.

Flawed

However, there was also a fifth category - things included on the list because it seems the respondents tried perfectly sensible cost-cutting measures, but something went awry.

Down the bottom of the table was shopping in £1 shops (at number 17), and while it may prove a false economy if you buy poor quality items, there are plenty of people who swear by buying groceries here.

Next on the list was doing it yourself rather than getting an expert in. Clearly, bodging is an expensive mistake, but surely a bit of time and care should make DIY an excellent economising move.

In 19th place was trying to avoid baggage charges on airlines. This could prove a major error for those who go over their allowance or end up having to buy things while they're away, but proper planning makes this a great idea.

Finally, multi-buy or 3 for 2 offers was 20th on the list. Clearly this was chosen by people who had found themselves with rotting fresh produce and items they never used, as opposed to the highly sensible option of taking advantage of these deals on items you use regularly and won't go off (once you've checked that there isn't a better deal on elsewhere).

But what do you think? Are these the worst ways to waste money? Let us know in the comments.

Rank

False economy*

%

1

Just paying the minimum amount off your credit card each month

54

2

Buying counterfeit goods

51

3

Lying on your insurance application to get a cheaper premium

48

4

Going abroad without travel insurance

47

5

Not having your car serviced

45

6

Buying cheap shoes

41

7

Buying cheap paint

41

8

Buying cheap loo roll

40

9

Saving money by not having your boiler serviced

39

10

Comparing only price, not quality

38

11

Not having breakdown cover for your car

33

12

Gym memberships

31

13

Buying a cheap car

27

14

Buying a cheap bra

25

15

Mobile phone contracts

19

16

Buying cheap moisturiser

17

17

Shopping at £1 shops

14

18

Doing-it-yourself rather than employing a tradesman

14

19

Trying to avoid baggage charges on budget flights

13

20

Multi-buy or 3 for 2 offers

13

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