A Dollar Saved
Answer me this: You’re standing in the bookstore holding a copy of a book you’ve been dying to read when the woman next to you says, “I saw it just down the street for $18.” Would you head off to the store that’s 15 minutes away to save $7?
I would. Yup, the walk would be good for me, and I just can’t pass up a good book.
Everyone has stuff they can’t pass up. For some it’s that fine cup of coffee. For others, a great handbag. Some guys love browsing the aisles of Crappy Tire, looking for the perfect tool that will make that job at home worth doing.
But how many of the things you buy come as a complete surprise to you? You don’t set off to buy a new set of glasses, but there you are standing in the store, paying for them. Sure, they’re great looking glasses, and you can always come up with a good reason or three why you need them, but they’re an impulse purchase.
Could it be that you can’t stay focused on what you DO want? You want to be debt free, want to save money for a home, want to have a big, fat emergency fund, or want to have a baby, but that’s such a far-off goal. It may be wonderful to be debt free, but giving up your day-to-day indulgences just doesn’t feel like it’s worth it. After all, it’s going to take months, even years, to get out of debt, and who wants to spend all that time denying all those small pleasures?
You can feel the pleasure of the coffee as the warmth moves through your mouth and down your throat. You can smell the pleasure of the next sip. And when you throw out the cup, the memory of having spent the $3.45 is gone.
So how do you make your goal feel satisfying when you’re skipping all that coffee, not buying that purse, forgoing the walk around the tool department, to make it a reality? How do you pass up dinner with friends, a movie with the kids or that fabulous cruise you’ve been dying to go on with your honey?
Here’s what I suggest parents do with their children when they’re trying to keep the kids focused on a goal they are saving for:
Cut out a picture of whatever your child wants to acquire and paste it on a page with the price beside it.
Find out how much your child wants to save each week, and divide that into the price of the item. So if item costs $20 and your child plans to save 50¢ a week, that would be a total of 40 weeks.
Draw 40 small boxes on the page with the picture on it.
Each week, as your child sets aside the 50¢ she’s saving, she gets to check off one of her boxes.
Charity drives use a version of this when they draw what looks like a big thermometer and then fill in the amount they’ve raised toward their total goal, raising the mercury each time they get another contribution. You can do the same thing with your goals.
Here’s another question about saving money. Let’s say there’s a new computer you’ve been saving to buy. You’ve done your research and you can get exactly what you want for $789. The man beside you turns to you and says, “That exact computer is on sale down the street for $782.” Would you take the 15-minute walk to save $7?
If you said “yes” to my first example of the book that was $25, down to $18, but said “no” to the computer alternative, my next question is “why?”
After all, $7 is $7, whether it represents a 28% savings or a less-than-1% savings, it’s still seven bucks and gets you $7 closer to your goal, whatever that may be.
Maybe it isn’t that you just can’t commit to saving, paying down your debt, or whatever else you wish you could do. Maybe it’s that you’re focusing on the wrong thing. Like the shopping example, if you’re focusing on the percentage you’re saving, you lose track of the value of the dollars themselves. It’s all very nice to save 50%, but a buck is a buck, whichever way you cut it.
And getting $1, $10, $100, $1,000, $10,000 closer to your goal has to be as satisfying as buying another cup of coffee, purse or tool. It just requires having the right perspective.
April 15th, 2008 at 10:40 pm
Beautifully put.
There is another, less practical side to going the extra mile for the bargain… literally. I also know people that will drive around all over town to save a few pennies on tomatoes or a couple bucks on a shirt. I figured it out, for me to drive to the other end of town, I need to factor in at least $8 in fuel! So I have to consider that before I get too excited about the “savings” and multi-task the trip with other errands to make it worth my while.
I quickly do the math while I am shopping…. “sure I know it is $5 less at the big box store, but is it worth the extra fuel, time and inevitable other irristable impulse deals I will find when the local place has it?” USUALLY the answer is no. Then I need to ask myself another question (knowing it is less expensive elsewhere) “Can I wait untill I’m at that other store for this item whenever that may be?” thankfully it is usually a self explanitory answer.
April 15th, 2008 at 11:26 pm
Hubby and I have started to make our wishlist of tasks/events we want to save for, split them up into attainable quarters of the year, and we review each quarter and how we did. We’ve done this for the last two years and a bit, and it has worked really well.
April 16th, 2008 at 12:16 am
Great advice. We’re looking for a new place to rent and we set our budget… but a nice house comes up and I think “oh, well, it’s only $50 over the budget… but it’s NICE” and suddenly $50 seems like “not so much”.
Thanks for the reminder!
April 16th, 2008 at 12:21 am
Sometimes the price is not everything. There, I said it.
Is the item really the same? Computers need careful comparison because every once in a while, you get what you pay for! Is a store or a salesman more compatible with you? Return of merchandise policy, salesperson’s approach, etc… When we buy a product, there can be a cost associated with better service. Some bank have higher fees, and some offer less services. Is cheaper in 10 days ok for this purchase? It depends.
Make sure that a saving is really a saving! (I completely agree with cost of gas issues, and time can be money!)
April 16th, 2008 at 11:26 am
My favourite way to shop is - as I stare at the item tempting me - I ask myself - need or a want? Because every time I see something tempting - my first thought is - I NEED, I NEED! So my brain is now trained to say - Hold on, back up lady - need or want - do you really NEED that 9th handbag, cause it is looking so delicious right now? 99% of the time, I can walk away without buying.
I also shop with a friend - and we talk each other out of buying anything we don’t need. Before we enter the mall, we tell each other what we need - for eg, all I really need today is a pair of flip flops cause my old ones broke - then off we go and keep each other on track.
And another tip is - make a list of all clothing, shoes, etc - go through all the closets for the family, make a list of everything that the family needs and walk into that mall with it. Example, my son needed a spring jacket, his old one was too small for him - every time we went to the mall, we all kept a look out for a great deal, well, last saturday he got it - Timberland spring jacket - $24 down from $138! Whoo hoo! Kid happy, mum very happy!
You are all such smart ladies and I agree with everything said. Gail - saving money never felt so good and it’s all your fault! We love you for it!
April 16th, 2008 at 12:02 pm
Interesting topic today. Now, if it was me buying the computer, I’d buy it at the store I was at, if they had the price match plus the 10% as most major consumer electronic stores do. I actually did this for laptop, the price difference was only a penny, but I made the salesperson do it anyways, to prove the point. I could just go down the street, and buy it there. She made the adjustment. In fact when I purchased my photo printer, the price went down 2x in 2 weeks, which is the restriction for pricing matching on computers and computer accessories, my $300 printer ended up costing me $80 in the end. I live in walking distance of the store, so no transportation costs.
April 16th, 2008 at 2:52 pm
Every little bit counts.
That, and a $1 earned is really $2 because the government eats half LOL!!!!!
I like the idea with the charts for children. I’ll make a note to do that to my kids in the future when I have ‘em
April 16th, 2008 at 6:11 pm
my husband laughs but i’m a researcher. once we had the $ set aside it took me over a month to purchase a vacuum (dirty floors yuk). i could get one anywhere, but i wanted the best bang for my buck. best features, most practical use, longevity etc. and i love vacuuming now (it’s a sexy vacuum mind you) but because it was a GOOD BUY! it wasn’t on sale, i found the listed price reasonable, it was well researched and i love it. and most importantly it’s paid for upfront. never carried over.
so for me, i do love a deal, but a GOOD BUY, providing you always have the $ upfront, makes my day!
April 16th, 2008 at 11:58 pm
I buy one cheap but nice looking purse about once a year or a bit more, and use only that until it’s nearly falling apart. I find shoes interesting through the plate glass window, but I’m blessed with an innate immunity against feeling like I have to have them. Two or three pairs TOTAL do me for a long time. I scoff at lottery tickets (you will never win; put the five bucks in the bank!) and ALL anti-aging products (waste. of. time. and. money.) This has saved me zillions over the years! Which is good ’cause I have honking student loans to pay down!
I do have a taste for the expensive coffee, but I am trying a new thing of asking for a medium filter coffee rather than a large Americano — I don’t even notice the difference except when I pay and it’s /below/ two dollars! If it’s not fresh enough, I speak up and ask for a replacement, afer all the freshness is /their/ responsibility, not mine! I swear, it is actually making a difference to our bottom line.
Gail, you rock my world. I’m so glad I ‘discovered’ you and that you are putting your expertise and charm to such great use. You are actually saving lives and liberating people — how wonderful. Oh, and you blow the socks off that /other/ show, which really pales by comparison!
April 17th, 2008 at 10:46 am
Jenny, splurging $2 a day on that Americano results in about $700 annually. Take that amount and dump it into an RRSP and you can rake in a fortune from now until you retire! Since I’ve discovered Gail and other financial guru David Bach…Im bring my coffee into work and I’ve saved tons of cash.
As for Fab Broke’s comments $2 saved is $2 earned when you put that $2 into an RRSP or that new Tax free savings account introduced by the Tories! So now you can actually save tax free!
As for buying electronics such as a computer….unless you absolutely need it, I would recommend refraining from getting one. A computer becomes a distraction in life not to mention a sinkhole for your hard-earned cash. Take a $1000 PC, add the cost of internet for one year say at $40+tax/mth, add the additional electricity needed to run the machine…say $10/mth, not to mention any online purchases you make because you’ve fallen for one or two ads. For the first year of your PC purchase, you’re looking at additional expenditures of $700+ just to have the luxury of surfing the net at home. Multiply that for say 5 years and you’re looking at $4500 ($3500 + cost of PC)! Now think of the things you could do with that!
Now many of you may think that I am hypocritical by posting a message on a blog about the pitfalls of a PC; however, I am at work. On my designated breaks I pay my bills, do my surfing and read Gail’s advice.
April 17th, 2008 at 11:27 am
How about instead of shopping for new items, like clothing and some household goods, browing the aisles of charity shops like Sally Ann, hospice thrift shops, Humane Society shops for used and still good condition/quality stuff? Amazing how much designer and ‘label’ goods are found at amazing prices!!
April 17th, 2008 at 8:23 pm
Interesting concept. I see others have pointed out the logic of factoring in fuel costs. I wouldn’t lug a computer 7 blocks for fear of dropping it, so fuel and parking fees must be factored in. But more importantly, that $7 is a false economy if the store can’t give me the same service or tech support I need. Whereas a book? Same book, same author, no warranty/service needed.
I think I’m rare here in that my time is worth $7. I would NOT walk 7 blocks for a book bargain if I had other important things to do. However, I might if I had the time.
That said, I do get your point that the dollars add up. A couple bucks extra for the fancy cable package, a few cell phone calls, that extra item in the shopping cart…
April 18th, 2008 at 2:57 pm
Elvin, I do see your point about the coffee, and I am thinking about it, but the bigger picture is that I am a mom to 3 little ones and the coffee could be filed under ‘mental health’ most of the time. It gives structure to my walks with the kids through the neighbourhood and something ‘grown up’ to look forward to. I have no social life-related expenses to speak of since I haven’t been out at night in about nine months, so the 2 bucks is not a big deal in my case — that is, the deprivation would be harder for me than for some. Having said that, I have begun brewing coffee in advance to take out on walks in order to cut a /bit/ of the coffee bill!
I guess what I’m saying is that all this depends on the individual. That is what Gail says over and over too — she can’t tell you what’s ‘worth it’ for you. Right now I would go mental without the cafe stops; in the next two years I’m gearing up to go back into career land and things will change again. Thanks for your comment though — certainly food for thought. I love this forum! It keeps me in that energizing ‘fight the stuff-lust’ mode and excited about saving. Hurrah!
April 18th, 2008 at 4:02 pm
I completely second Jenny’s comment about how this show keeps her in the ‘fight the stuff-lust’ mode….this forum does that for me also!