Manage Your Finances

Are You Penny Wise and Pound Foolish?

Penny wise and pound foolish examples are everywhere. The term comes from an old English proverb that is sometimes used in the United States & Canada as well. Penny and pound refer to English currency. Those that are penny wise and pound foolish make decisions that appear to be financially beneficial, but actually cost you more money in the long run.

If they pay a penie or two pence more for the reddinesse of them .. let them looke to that, a foole and his money is soone parted. – ye olde English proverb

Penny Wise and Pound Foolish

If you’re on a personal finance journey right now then you most likely know all about the ‘big stuff’ – spending less than you earn, investing, avoiding debt, not paying for coffee at Starbucks. 🙂

But after you’ve picked all the “low hanging fruit” from your budget then your next steps are to look for other ways to be efficient in your life.  This is where penny wise & pound foolish can come into play, because you might actually think you’re making the right move, when in fact you’re putting roadblocks on your own path.  That’s no good.

Penny Wise and Pound Foolish Examples

Here are a few examples of being penny wise and pound foolish from the major areas in our budgets.  Take a look and let me know what you think, and if you’ve got any examples of your own then please do leave them in the comments.


  • You don’t have renters insurance because you’re being frugal, but your place gets flooded and your furniture, clothing, electronics, etc. are all ruined.  Spend the $10-$15 per month on insurance now and save yourself thousands and thousands of dollars later.
  • You go with the cheapest contractor you can find to replace the roof on your house and save a few bucks up front, only to find out later that you get what you pay for.  Your shingles were installed incorrectly, you’ve got a leak in your roof which is going to cost you far more money than you “saved” up front.


  • You’re sick, but avoid going to see your doctor because you don’t want to make that co-payment.  Besides, you’ll be fine, right?  36 hours later you’re in the (very expensive) ER after your appendix burst.


  • You eat inexpensive, fast food because you think it’s cheaper and more efficient than buying and preparing fresh meals at home.  After a while your heath suffers and you end up paying for doctor visits, expensive prescriptions, etc.
  • You eat for $5.00 per day by dumpster diving, but end up paying far more in medical bills due to whatever virus you’ve caught by eating out of a dumpster.


  • You skip oil changes and regular maintenance on your car to save a few bucks, but end up paying for costly repairs down the road.
  • Driving miles out of your way and waiting in line of idling cars at your local Costco to save $0.10 per gallon on gasoline.  The amount you save isn’t worth the time, effort, and wear & tear on your vehicle.
  • You’re driving through Ireland with a buddy when suddenly the spare tire you are driving on blows out …. check out the rest of this story in this awesome example from Retire Before Dad


  • You don’t save for retirement today because you can’t afford to.  But you’re not getting any younger and are unprepared when retirement age rolls finally around, so you have to continue trading your precious time in exchange for a meaningless paycheck.
  • Doing your own taxes rather than paying for a professional.  You might save a couple hundred bucks up front, but cost yourself thousands down the road in penalties or unclaimed tax benefits.


  • You’re dependent upon a paycheck, but don’t give your all at work. Why? Because you’ve become distracted with your ‘side hustle,’ which isn’t earning your much money yet.  As a result of your lack of focus you fail to get a promotion, or you get a smaller bonus, or worse – you lose your job.
  • You take advantage of your employer (take home office supplies, are too liberal with discounts) and end up getting fired.  Nice work saving a few bucks – it just cost you a fortune in lost income.


  • You’ve been married for nearly 20 years and fail to continue dating your wife on a regular basis. Why? Because dinner and a movie and a babysitter for 4 kids is bloody expensive? A babysitter isn’t nearly as expensive as a divorce! Yikes. Nothing is more important that your relationships – don’t skimp in this area!*

* While some of you that know me might think I’m describing my own situation here, that’s not the case.  My wife and I go on a date every Friday or Saturday.  Best money I spend all week, without a doubt!

#PennyWisePound Foolish examples are everywhere. You're probably guilty of being #PennyWiseAndPoundFoolish yourself. Check out these examples to see if you've falling for short term gain and long term pain.

Chime In

So that’s what I’ve got off the off the top of my head.  Any of these ring true?  Have you ever done anything to save (or make) money which ended up costing you more in the long run? Leave a comment below.

By Ty Roberts

Ty Roberts is the founder of Camp FIRE Finance, and a husband and father of four living in the Seattle area. He's a fan of the 4% rule, 80s movies and music, dad jokes and cast iron cooking.

14 replies on “Are You Penny Wise and Pound Foolish?”

These are all good tips, Ty. I think many people skimp on the home. Renter’s insurance, as you mentioned, is very important. As homeowners we’ve found paying for maintenance along the way can ward off a larger cost. This is why we have an HVAC contractor who inspects our furnace and air conditioning system. Car maintenance, too is important, Mr Groovy’s a firm believer in not putting off oil changes.

“preventative” spending can be a tough pill to swallow for many, whether that be on health care, home repairs, or can maintenance, but it’s actually very important and reminds me of another proverb: “a stitch in time saves nine” I guess it’s a proverb kind of week for me 🙂

Mr. MSD is famous for looking for the lowest gas prices. I remind him of the 80 cents he saves to go to the other end of town…hard to get him to break that one! We usually get three bids for things like a roof and we generally go with the middle bid. We’ve been lucky so far – by not skimping but not thinking we need the “best” either!

Good points! Skipping out on insurance seems like something that could be penny wise and pound foolish. The cost of getting life insurance and disability insurance through an employer are generally very low, but the lost income from death or disability could be massive and could really destroy your family’s finances.

Love this post. It’s important to look at the bigger picture to understand the true saving / spending decisions. I like that you outlined various parts of one’s life that could be affected. I’m a proponent on having insurance to not regret it later 🙂

Nice tips Ty, I completely agree with what you’re getting at here.

You can easily use your phrase on the income side too. With a lot of ‘making money’ you have to spend money – like further education, setting up a business or simply investing.


Great topic. “One house, one spouse” is the best early retirement plan. Having multiples gets really expensive really fast, so it’s worth taking care of the ones you have!

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