Penny wise, pound foolish
中国日报网 2025-01-21 10:52

Reader question:
If a government policy is described as “penny wise, pound foolish”, what does it mean exactly?
My comments:
It means that particular policy is foolish, rather than wise.
The government must be trying to save money. They refuse to spend small amounts of money on certain projects even though doing so may result in bigger losses down the road.
Let me give you an example. Say, a river bank broke ten years ago during the summer. Locals asked the local government for money to reinforce a few problematic dykes. But the local government kept refusing to do it because it was bent on cutting budget and reducing debt. Last summer, another torrential rain caused another breach leaving many houses inundated.
As a result, the people and the local government suffered much greater losses having to rebuild houses and repay for other damages. Had the government spent the money to shore up the dykes, much greater losses would have been averted.
Those much greater losses are no longer pennies. They’re pounds, metaphorically speaking.
Hence, the local government is considered penny wise but pound foolish, wise and clever in saving small numbers of money but unwise (foolish) and wasteful with large sums.
In Chinese, we use a similar saying to describe someone who keeps picking up small sesame seeds while ignoring large watermelons.
In other words, they’re picky and choosey but have a misguided sense of proportion.
In fairness, I believe we’re all victims to being penny wise but pound foolish from time to time. For example, have you ever bought a pair of shirt because it’s cheap?
You do get to save a little on the purchase but that shirt becomes unwearable after a wash. Result: You have to fork out for another shirt.
Essentially, that’s the meaning of penny wise but pound foolish, making small gains short term while, often unwittingly, suffering bigger losses in the long run.
All right, here are a few examples:
1. At a cost of A$826.1 million in the 2014-15 federal budget, the processing and detention of around 2500 asylum seekers on Nauru and Manus Island is a scandalous waste of taxpayers’ money. The government’s own data shows that offshore processing is wildly expensive in comparison to onshore alternatives. The Commission of Audit reported earlier this year that detaining a single asylum seeker for one year offshore costs more than $400,000.
Late last month, the government announced that it would withdraw $140,000 in annual funding for the Refugee Council of Australia, the nation’s peak body for refugee organisations. This is just one example of how the government is looking to save a few dollars while ignoring the obvious way to save real money – processing asylum seekers in Australia.
Even detaining asylum seekers in Australia is vastly cheaper than detaining them offshore. As the Commission of Audit reported, it costs $239,000 a year to hold an asylum seeker in a mainland detention centre (or around half the cost of Manus Island or Nauru).
It is less than half the cost again to hold asylum seekers in community detention – where the asylum seeker is put into community housing by the Department of Immigration – at less than $100,000 a year. By far the cheapest option, however, is to allow asylum seekers to live in the community on a bridging visa (less than half the cost again of community detention).
The Commission of Audit described the detention and processing of boat arrivals as “the fastest-growing government program over recent years”, with expenditure skyrocketing from $118.4 million in 2009-10 to $3.3 billion in 2013-14. To put this into perspective, the United Nations High Commissioner for Refugees (UNHCR) is responsible for 11 million refugees and 38.7 million “people of concern” globally with a total budget of US$5.3 billion.
…
Whichever way you add up the sums, Australians pay far too high a price for the government’s refugee policy. Last week, immigration minister Scott Morrison reiterated that this “pound foolishness” would persist. Labor too confirmed its steadfast commitment to offshore processing.
It seems we are prepared to pay almost anything to appease Australia’s irrational fear of asylum seekers who arrive by boat.
- Penny wise, pound foolish: How to really save money on refugees, SBS.com.au, June 12, 2014.
2. Democratic FCC Commissioner Anna Gomez said Friday that the shutdown of the Affordable Connectivity Program will undermine the goal of affordable, high-speed Internet for every American.
Gomez, in a statement noting Friday as the last day of the ACP, said adding $30 monthly discounts to the bills of millions of low-income Americans would generate demand for new networks to be built with the $42.25 billion in grant dollars from the Broadband Equity, Access, and Deployment program.
“The end of the ACP will undo the significant progress we have made toward closing the divide and harm millions of Americans,” Gomez said. “Not only that, but it will have economic and competitive consequences for our country if we fail to maximize the $42.5 billion investment we’ve made in broadband infrastructure through the BEAD program. It is, as they say, penny wise and pound foolish.”
The White House today issued a statement calling on Congress to extend funding for the ACP.
In a press release, the White House praised 15 Internet Service Providers that served 10 million ACP enrollees for volunteering to offer plans at $30 or less a month to low-income households through 2024.
- FCC’s Gomez Says ACP’s Demise ‘Penny Wise, Pound Foolish’, BroadbandBreakfast.com, May 31, 2024.
3. Have you heard that old saying, “If you watch the pennies, the dollars take care of themselves”? It sounds like good advice, but it’s not.
An obsession with quick savings hacks can give you the illusion that you’re being financially responsible by constantly chasing nifty ways to shave a few dollars off your expenses.
This can fuel spending anxiety and perfectionism. You become hyper-aware of the price of everything, constantly look for bargains, and second-guess spending decisions. “Is it worth it?” “Do I really need this?” “Can I get this cheaper elsewhere?”
This might sound like a good thing, but having spent years helping people turn their financial lives around, I’ve noticed that people who watch pennies can get fixated on penny-sized problems. They fall into the trap of becoming “penny-wise, pound-foolish”.
After all, you can’t fix $100,000 problems when you’re busy fixing $100 problems.
While you’re collecting points to get $50 off your next holiday or scouring aisles in the grocery store for discounts, you are probably not focused on problems that are worth more to you in the long run. Researching a better-performing super fund, learning about tax saving opportunities, or learning to invest, will have a bigger impact long-term than hunting for cheaper petrol.
Am I saying penny-pinching is bad? No. There are stages in your financial journey where this strategy can be useful. The question isn’t whether it’s good or bad, it’s whether this strategy is helping you create the life you really want.
Given how heavily reinforced penny-pinching is all around us, it can be difficult to see when this strategy is helping or harming.
- Pinch every penny? Not if you want to actually get ahead, by Paridhi Jain, July 3, 2024.
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About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.
(作者:张欣)