3. Upping Your Insurance Deductible to Save Over Premiums

When you buy an insurance policy, you are asked about the amount of deductible you shall pay from your pocket in the event of damage and loss of property and life. If you agree upon paying a high deductible, your policy premiums are likely to be kept low. Saving money over premiums and spending more over deductibles, is not a rational financial decision.

By agreeing to pay a hefty deductible, your exposure increases towards expenses incurred in event of damage and loss of health and property, hence it’s a very bad idea.

You must understand that the few thousand rupees which you can save by increasing your deductibles will not be enough to pay for repairing a broken car or your flooded house.

More: 8 Most Frugal Billionaires of All Time

4. Opting For Layaway to Feel Like a Saver

If you don’t have sufficient money to purchase the things you want, don’t ever fall for ‘layaway’ purchasing method. In the layaway system, you would be required to pay a deposit to secure an item for later purchase. After this, you make regular small payments until the purchase price is paid in full, instead of purchasing the item on credit and adding interest to the cost.

Layaway may seem like a debt-reduction plan, but in reality it's a marketing strategy that gets lower-income customers to think they're saving over debt interest charges when they're actually accumulating late fees and interest. So never fall for such schemes.

Also Read: All You Need To Know About New Cheque Books