Is this penny pinching stuff really worth my time?

[eileen1]

I have lain in bed at night fully aware our garage light was left on by mistake and remained in a state of inertia, despite the upcoming eight to ten hours of pure wasted electricity.

I have been "too tired" to cook dinner many nights and instead picked up the phone to order pizza or Indian carryout.

Sometimes I haven't wanted to bother to organize our donations pile and instead just dropped off a bunch of stuff in bags and didn't itemize it or get a receipt for taxes.

And I think this behavior is typical of many middle class Americans who feel too busy making money at work to bother with the work of saving money at home.

But, of course, this is ludicrous for anyone who dreams of an early or at least comfortable retirement. If you're too tired working to bother with penny pinching, you may well be "working" for the privilege of wasting the money you're working so hard for.

I have a good friend who makes oodles of money as a partner at a law firm, but who at 40 feels burned out. She says she doesn't have the mental energy at the end of the day to study investment theories. But if all her energy goes to working for the money and none is left to manage that money - what are the odds she's making the decisions that will allow her to stop working anytime soon?

We have two huge, dead oak trees in our yard that need to be taken down. My days are busy and the thought of carving out time for three separate estimates aggravates me a bit. I'm assuming about three hours of my time for three estimates. What if I liked the first company and just went with them, "saving" myself the other two hours? And let's say the third estimate would have come in at $100 less than the others.

Teaching law part-time, I figure after taxes, commute, class prep, occasional childcare and dry cleaning, I "clear" about $10 an hour. I came to this figure after reading a wonderful book called, "Your Money or Your Life" by Joe Dominguez and Vicki Robin.

So the two hours I "saved" by not bothering with the other estimates, will cost me ten hours more work to cover.

And what was perhaps $75 worth of clothes and household items in that donation pile that I didn't want to bother with, or the $25 tax deduction it represented, would have taken me about 20 minutes to sort and itemize. Instead I will have to "earn" that $25 through two and a half more hours in the classroom.

That $20 for pizza or $30 for Indian carryout was due to the fact that I didn't want to spend half hour or less cooking salmon patties and microwaving some corn for dinner. But I will now have to spend two or three hours at work to cover those costs.

And what is it costing my friend to turn on the t.v. an hour or so a night to wind down after a long day instead of reading a few books on basic investments?

So next time you don't want to waste your time on penny pinching, realize you're likely going to spend an equal amount of time or more at work to pay for this luxury. You may be surprised how little you actually clear per hour from your job once you've taken out taxes, commute, day care, dry cleaning, and other associated expenses.


And maybe next time you're lying in bed knowing the garage light is on, you'll take the two minutes to run downstairs and turn it off...


Happy Penny Pinching!!

The Frugal Millionairess

[cschin4]

So next time you don't want to waste your time on penny pinching, realize you're likely going to spend an equal amount of time or more at work to pay for this luxury. You may be surprised how little you actually clear per hour from your job once you've taken out taxes, commute, day care, dry cleaning, and other associated expenses.


And maybe next time you're lying in bed knowing the garage light is on, you'll take the two minutes to run downstairs and turn it off...


I think you can drive yourself crazy with this stuff. I think we can overly worried or focused that it drives us bats. We put so many "oughts" on ourselves that at the end of the day we are wiped out, exhausted, etc.
I COULD can my own food, sew my own clothes and what not but I don't have the time or energy. And, instead, we beat ourselves up for not doing those things.
I rarely ever get three estimates on anything. If the price to do what I ask seems reasonable that is good enough for me. I do find that I think more of what I buy so that I am not frittering away money. I don't want to have to work like a dog until my dying breath. But, I do know that I have frittered away a lot of stupid money and it is annoying to know you can't get it back. At this point, I want to downsize. I want to own my time. I really dont' care if I live in a trailer with a junkyard dog as long as my time is my own. I don't want to slave away to pay for more junk I don't need. I am happy to have meal, watch the birds and read a book. I don't want fancy stuff, I dont' want to travel and I dont' want any more junk to take care of. I just want my own time and piece of mind. A lot of my friends are on the fast track and they work like dogs to pay for all their junk. No thanks.

[rob62521]

I think what you are saying is there has to be some common sense to the penny pinching...being wise is one thing, being nuts is another. Had a friend who had perfectly good drinking glasses, but chose to spend hours taking the metal off of plastic frozen juice containers to use as glasses because he might break the other glasses and have to return them. Personally, I thought it was insane.

[eileen1]

Rob, your friend's penny pinching does sound a bit insane;-)....and not a great use of time. My point is it really is just a question of numbers. How much do you have to work at your job to "pay" for the luxury of not doing the penny pinching - and just decide what's worth it. My own husband would happily work at his job for five times the hours it would take to stain the deck.

[marvholly]

Everyone needs to evaluate the cost/benefit ratio of what they are doing.

Changing to CFL light bulbs as I needed to replace bulbs cost me NO extra time but did lower my electric costs.

Cooking extra chicken breasts, hamburger patties, pasta, rice this weekend cost little or NO extra time but I have a base for all of my meals next week.

I plan to wash some windows. I "could" buy windex but it will cost me just about 2 minutes to mix vingegar or ammonia w/water.

I am going shopping for a couple new appliances today. I probably will NOT buy yet; just comparison shop so I can spot a really good deal when I find one. Then I will be saving $$ on electric as I plan for this fall.

I usually pack left overs for lunch at work as I clear from dinner. Cost in time: about 3-5 minutes. Cost savings even from a fast food $1 menu is at least $3/meal. Count in extra medical expenses of eating that carp frequently and its "priceless." Also, with packed leftovers I generally take only 20-25 minutes for lunch so I get paid a few minutes of overtime EVERY day = making $$ without exttending my actual day/cutting into home & family time.

That said, I do do some REAL good eat out deals.
I have just gotten a $5 all you can eat pizza buffet place on one of my frequent travel routes. It also includes pasta & salad. considering a low end take out pizzia cost a minimum of $5 here I will be doing this about 1x/month. Also, Old Country Buffet has published coupons for my closest outlet on the To Go box. I hit them up 1-2x/month and get all the REALLY higher end & entree only items - steak, salmon, baked fish, chicken terriyaki, shrimp stir fry. Eat off the box for an entire week at less in acutal out of pocket than I could buy the raw meats for and NO time or energy spent cooking plus no cleaning of pots/pans......Only the plates I would use if I cooked anyhow.

[MonkeyMama]

I am not a fan of "penny penching." (Spending an inordinate amount of time to save a penny).

BUT, I would hardly classify eating in as penny pinching. Compared to many of our friends, we save $500+/month EASY by being frugal with our grocery budget, and eating in most of the time. (Savings, in comparison to many of our friends). That's a LOT of pennies!

Energy saving? I don't mind turning off a light. It's not terribly time consuming. That's the kind of stuff I don't mind (energy preservation) because it just takes good habits more than anything (remembering to turn off lights, setting the thermostat higher or lower, etc.)

Overall, the article is probably pretty relevant to the average American. We are a non-average group here, I think.

[rob62521]

Overall, the article is probably pretty relevant to the average American. We are a non-average group here, I think.

I would say you are right.

[elessar78]

The law of diminishing returns

Up to a certain point your efforts with frugality are rewarded well, but after a certain point you get less and less return/savings/money for your efforts.

All I can say is find that point where you get the most bang for your efforts and spend the rest of the time enjoying life.

[LivingAlmostLarge]

Depends. I just got back from "vacation" but I spent a fortune on it. Sigh. I'm a bit more stressed than not but I did do a lot of good.

Penny pinching was trying to get a good deal on airline tickets. I got them for $650, not bad, but not great. I could probably land it around $500 if we had traveled in October, saving me $150 each for DH and I, but my DH couldn't travel in October. So I "wasted" another $150.

But this was a trip I wanted at Christmas when it costs typically $1500/per person. So I "saved" $850/per person due to circumstances of not being able to travel at Christmas.

[lehresman]

I'm a budgeting nerd. I've tracked my finances for years, and one main lesson I've learned is that little "penny pinching" decisions add up to huge amounts over time. It's amazing how money can slip through our fingers. Mostly, it happens through little daily decisions like this.

Sure, it's only costing you a few cents to leave the light on in the garage. But if you did it all the time, it would be a few dollars per month. And if you left a few fans on, and a few more lights, that can add up to maybe $5/month. That's $60/year. Sure, that's not huge at all and you can probably afford $5/month to stay in bed longer.

But, like I said, it's the aggregate of these decisions across your lifestyle. A "penny pinching" mindset can save you hundreds of dollars per month.

I had the fortune of marrying someone who is much more frugal than myself. My wife has changed my mindset on many daily decisions to be lazy. As a result, I'm earning almost the same income as before, but chucking $400/month into savings. This came from when we analyzed our budget and decided to make decisions that increased our savings. Now, we hardly ever eat out (that was the big one for us that saved us a TON of money). But as a result, we have a large emergency fund, are out of debt except for the mortgage, and are on target to pay off the mortgage in 10 years.

Don't think of these decisions as independent decisions, think of it as a lifestyle mindset. The savings comes in aggregate over all these decisions, not any single one.

[littlemama]

well said OP. You make some very good points. I am currently reading your blog and it is very insightful.

[Ima saver]

I think small sums really add up. I really learned that by doing the $20 challege for the last few years. Everytime I save money using coupons or getting rebates, I add that to the $20 challenge. I have saved thousands every year doing these little extra things.

[rob62521]

I think sometimes we forget how much we have saved by pinching those pennies and getting into the habit of doing so...like not leaving unncessary lights on, or using coupons, or looking for travel deals.

Then there's the person who claims they want to save money by buying something that is supposed to help and using it in a way that doesn't really save any money. We know a couple who decided to trade in their car and buy an economical model. Have they saved money? Probably not because they are driving even more than they did before because they get better gas mileage. They seem to forget that although they have better gas mileage with this little car, the cost is more than the gas, they haven't figured in the wear and tear on the vehicle and the oil, fluids, tires, etc.

[cschin4]

Spending $20K to "save" money on gas is laughable unless one really drives excessively. A person really needs to calculate this for themselves based on reality by how many miles you really drive per year on avg and the cost of gas vs the cost of trading, buying another car, etc.
For example, if you car gets 18 mpg which my fairly new minivan (05) only gets and I drive 15K miles per year, then I need to purchase about 833 gallons of gas for that year. If gas is $5 a gallon, the cost is $4165 for that year. If gas is less which it is presently, it is about half that amount. So, about $3K for gas.
If I now buy a car that gets 40 mpg, then I would need to buy 375 gallons to go that same 15K. At $5 a gallon, the cost would be $1875, or if gas was less than that maybe about $1000 per yr. It is a pretty good savings, but does it make economic sense to spend $20K to save $2K per year? I don't think so. And, I think the MOST environmental sense is to maximum the use of whatever we already have rather than bringing in and building new stuff for the landfill.

[Ima saver]

Someone on this forum mentioned that they spent $100 to get a $20 rebate at a drug store in one month. I don't spend $100 in drug stores in a year, except for getting prescriptions.