MoneyMerc

[First post of the year - work has been crazy lately, but I still intend to post at least once per month, with my goal at twice.  Thanks for reading and commenting!]

photo by emdot

These are tough times.  Everyone seems to be trying to save a little more, and spend a little less.  Watch out though, sometimes that ‘deal’ ends up costing you more than you think.

“Save money faster with double cash back.” ~HSBC credit card rewards ad

“It’s ok, it’s a tax deduction!” ~stupid person

“Buy two, get one free.” ~Walmart

Do you really need two?  or three?  Do you realize that a tax deduction is only a small discount? (at most equal to your marginal tax rate, and often much lower, as in the case of meals)  Are you starting to look for houses so you can get your $15,000 piece of the stimulus package?  Do you spend on credit cards more freely because you know you are getting rewards?

I call all of this “going broke saving money”. It’s very easy to fall into this trap.  I saw the HSBC ad above walking home from work today – man that pisses me off.  Credit card companies can really be vultures sometimes.  Always try to make purchasing decisions based on need, and then evaluate prices accordingly to get the best deal.  Think of the money saved or rewards earned as a bonus.  I guarantee you’ll be spending less money overall.

And please don’t buy a house unless you need a house, you find a good deal, and you have the money. Something is very wrong with your math if an extra $15,000 makes a house affordable.

Seen any other idiotic ads or have a story when you spent too much but didn’t realize your mistake after?  Leave it in the comments!