They say 'penny wise is pound foolish' - what are some frequent examples of this?
I think that a frequent and rather upsetting example of this is when contracts are issued to the lowest bidder on a building or road project only to find out that they could bid low because the materials they use are poor qulality. One recent example near my hometown was a road project that was awarded to the lowest bidder. Less than a year after the road was completed, it gave way to huge pot holes and, in places, disintegrated altogether. The construction company had to redo several miles of a dual lane road. I can't imagine that the company made any money, and they certainly hurt their reputation.
On a more personal level, I think we've all been enticed to buy goods that are of lower quality because they are cheaper only to find out that they don't work as promised. An example of my own: I needed a new potato peeler and didn't want to buy the more expensive model for $6, so I picked up a similar one for $2. It doesn't work properly, and I'll be purchasing the better model anyway!
I think some examples of this are in the form of missed opportunities:
Penny wise: not spending money on a suit to go on job interviews- save $300
Pound foolish: Not landing a higher paying job- miss out on thousands of dollars of additional income
Other common examples are saving money in the short term by not doing routine maintenance on your car or home, only to pay more in the long run due to to value depreciation and more expensive repairs.
If a person had to choose between buying things, he would look at both quality and price. One should always choose the best that he can reasonably afford when it comes to important purchases. If he bought something cheap to cut corners, he would have to replace it sooner and incur a greater price in the end.
Don't waste your money by spending all your energy on saving all the pennies while the hidden costs in big dollars slip away. Avoid the financial mistakes in these real life examples. read more
I see this a lot with food choices and health matters. People buy cheap, processed foods claiming that healthier, whole foods are too expensive. It's understandable, but later on they have health problems due to a poor diet, diabetes or obesity for example, and those conditions ultimately are much more expensive to deal with financially - not to mention quality of life issues.
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