Are You Saving Pennies And Losing Dollars? – Save Money By Being Smart

12 Comments March 23, 2010 / Posted in Personal Development

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Are you really saving money when you are pinching pennies? I certainly do not think so. Many people have mistaken that by pinching pennies, they are being frugal and saving money. However, I think that is certainly not the case and by pinching pennies, you may be wasting more money instead.

There are people who can scout the mall for the best deal by visiting every store available before making their decision. It is smart to find out various deals before making your decision, as it can let you have a feel of the market and available offers. However, you may not be saving money when you took into account of the time and effort you spent searching for the best deal.

Saving A Few Dollars On A Movie Ticket

There was once when I saw one of my friends trying to save a few bucks for a movie ticket. To save a few bucks, he decided to commute for an hour and a half to an old cinema for a movie. Back and forth, it would have taken him 2 to 3 hours of commuting time. On top of that, the cinema is in a rundown condition and it certainly cannot provide him with a very pleasant movie experience.

He might have thought that he had saved a few bucks but in my opinion, he does not.

Spending a total of 2 hours plus to 3 hours of commuting time to a rundown cinema for a movie does not seems to be saving money to me. What about the transport fees? What about the value of your time? What about the overall movie experience?

If you take the cost of transport fees, the value of your time (how much are you earning per hour?) and the overall experience of the movie experience, the pennies you pinch is costing you more instead.

Think About Value, Not Price

Being frugal isn’t about pinching pennies, it is about being smart and getting the best value out of the price that you pay. Let us look at an example here; compare a G2000 shirt that cost $59 and a shirt that cost $29 that you get from some neighborhood store.

If the shirt is of the same quality than getting the $29 shirt is definitely the right choice. But what if the quality of the $59 G2000 shirt is way better than the $29 shirt that you got from the neighborhood store? Which means it looks better and last longer. On top of that, it looks good on you and makes you feel like a million bucks.

The value you will get out from the $59 G2000 shirt is much more than the $29 shirt and suddenly it is not wise for you save the $30 bucks anymore. Paying the additional $30 bucks for the benefits seems to be a much wiser and a more frugal decision.

Be Frugal, But Be Smart

Do not mix up being frugal with pinching pennies and losing value. Look beyond the price and see the value you are getting. It makes more sense to pay more to get more value rather than pinching pennies sometimes. Being frugal is a great habit to have and it can help you to accumulate wealth. The next time when you want to pinch pennies and be frugal, think about the value you are getting to help you make your decision.

Vincent
Frugal Living


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12 Responses to “Are You Saving Pennies And Losing Dollars? – Save Money By Being Smart”

  1. “A penny wise but pound foolish” is the quote that comes to mind when I read your post.

    I was raised in a conservative family who believed in “drop, drop fills the bucket” but if you look at it rationally, instead of from a fear of loss perspective, it doesn’t make sense.

    I also look at opportunity cost, what will spending this money cost me in return.

    Cheers,
    Rishi
    .-= Rishi @ Self Improvement Explained´s last blog ..5 Benefits From Meditating with Holosync By Centerpointe =-.

    • Vincent says:

      Hi Rishi,

      You used a very good word over here. Opportunity cost needs to take into consideration before making any financial decision.

      Cheers,
      Vincent

  2. Oftentimes it can take a person to place the info before you before you recognize that every person have to consider additional treatment.

    • Vincent says:

      Hi Dannie,

      Sometimes people need just a little nudge or inspiration to allow them to be enlighten or discover something new. :)

      Cheers,
      Vincent

  3. Being frugal but smart is a big thing to me. I am not into paying a premium for designer ;labels if there is not a measurable difference in quality. I’ve also learned to avoid expensive high-fashion items that are out of fashion as early as the very next season.

    • Vincent says:

      I’m not into paying premium for designer labels too but I usually go for goods that have higher quality. Sometimes getting goods that are good enough is usually good enough.

      Cheers,
      Vincent

  4. Credit Girl says:

    Vincent, I really enjoyed this post. You make a great point comparing the difference between being frugal and being not smart when it comes to saving. Likewise, I also know many people who will go to the ends of the world to pinch pennies which can be great but it’s quite sad because they fail to enjoy the bigger things in life. They save their entire life and never get to spend their savings.

    Also, with spending money I think it’s like exercising in that it’s not a single change that is so drastic that will give you results it’s the slow and gradual lifestyle changes. For instance, when you intend on starting an exercise regimen, you wouldn’t run 3 miles really hard the first day and then not work out again until next week. You want to start slowly and be consistent. So in terms of spending, you wouldn’t just start not spending at all- you might find ways that help you save when you spend like finding coupons or maybe limiting yourself to eating out. Small lifestyle changes that will save you money in the long-run. Consistence is key.
    .-= Credit Girl´s last blog ..Traditional Passport Savings Accounts: Westside Bank Offers .25% APY =-.

    • Vincent says:

      It will be painful not to spend at all. I think it is all about spending smart and getting value for every penny spent.

      Cheers,
      Vincent

  5. [...] Here’s my definition of frugal: Paying for best value. Here’s the solution: Look at the highest quality first, and then the price tag. Your question should always be “what am I getting?” Vincent from HealthMoneySuccess.com calls it “Saving money by being Smart” [...]

  6. Debt can be so burdensome to so many. Hopefully people will get some help from the excellent posts you have made.

  7. Man… if he really wanted to be frugal he should of just gotten a movie from his local library, :-P hehe. But yes, that is a concept that many people have not learned, and that is the opportunity cost. Well at least the only good thing is, they are conscious of their money… which is good, but needs to go more than that you know?
    .-= American Bison´s last blog ..Yellowstone park =-.

  8. Maybe they just enjoy window shopping so it’s not really a waste of time..besides it’s also a nice form of exercise..you get to lose a few calories and get the best value for your money :)