5 Ways You’re Wasting Money, Not Saving It-Commentary

I found this blog post that gives five ways you may think you’re saving money, but you’re really not. I agree with these five points, but I do have some comments of my own about them, that I think are better made here (as I tend to get quite wordy). I also have included a sixth bonus point of my own that did not appear in the original article.

Point #1-Buying gas at the least expensive station.

While this would seem obvious, the problem occurs when the least expensive gas station is a few miles off your regularly traveled route. If you are driving across town to save a few cents per gallon, the cost of driving to get the better price will negate any savings the cheaper gas price provides.

Solution: Choose the least expensive gas station that is no more than a mile from your regularly traveled route. You can keep informed on which gas station is selling gas at the best price at such sites as Gasbuddy or MSN Gas Prices.

There isn’t much I can say on this. You really aren’t saving money if you have to go out of your way to fill up.

Point #2-Going to Different Stores to Get Sale Items

People often believe that they are saving money by looking at the weekly discount ads that stores send out and finding the best price for each product they need. The problem is that by driving all around town to the different stores, you waste all of that savings on the cost of operating your car.

Solution: Find the closest store that will price-match. While many stores don’t advertise that they will price-match, a fair number of stores still do. You may need to ask the manager to confirm whether or not the store does. Once you have located a store that will price-match, simply buy everything there and bring in the competitor’s ads to get the best price.

I agree with this in principle, but if you compile a price book and you plan, you can go to different stores to pick up sale items or items that cost less.

For example. I do my grocery shopping at a local/employee owned grocery store chain (Woodman’s) where I do save quite a bit of money. However, I also make at least one trip a week to Wal-Mart. When I make out my grocery list, I can consult my price book and determine where I will purchase a specific item. When I do my grocery shopping, I will pick up those things I decided to get at Woodman’s. When I make my trip to Wal-Mart, then I will pick up those things I decided to get at Wal-Mart. I am not making extra trips to the store outside the trips I normally make. Wal-Mart does price match, but they do not carry a lot of items that Woodman’s does. Woodman’s prices are a lot lower than most of the grocery stores in the area and they do not print fliers in the paper. They also do not take credit cards, they have items that no one else carries, and they have greater purchasing power. Their prices, most of the time are comparable, and sometimes even cheaper than Wal-Mart. This is why I shop at Woodman’s. I have to truck up to Appleton to do this, but with the money I save, I still come out ahead, even with the gas factored in.

The problem where people will waste money is that they don’t plan ahead and they end up making extra trips, wasting time and gas.

Point #3-Buying the Cheapest Instead of the Best Value

People often confuse the least expensive price with the best value. Unfortunately, the products with the least expensive prices are often a poor value. While price is an important factor that contributes to value, it isn’t the only factor that one needs to consider.

Solution: Look beyond price when you purchase a product. Consider how long you need it to last along with its price. Other factors you should consider that can contribute to value include quality, design, warranties and repair costs. By taking all these factors into consideration instead of focusing exclusively on price, you are much more likely to walk away with something that will be of value.

This is also where the price book is a big help. If you buy the cheapest item, and it has to be replaced sooner, you end up spending more money in the long run. I also apply this idea to food and the WW points. In the long run, it’s a better value to spend a bit more on healthy food up front. I firmly believe that eating cheap, pre-packaged, processed foods and eating out is why America is a nation of diabetic lard-butts. Obesity, diabetes, high cholesterol, and cancer cost more in the long run than that bag of fresh apples. You can pay for it now, or you can pay for it later.

You also have to be smart and look past marketing. Clever marketing and the fact that it is so easy to hate on Wal-Mart has led to the public perception that Wal-Mart is for poor people, the stores are dirty, and they sell nothing but cheap crap that breaks, they pay crap for wages, and their employees are unhappy. It’s also led to the public perception that Target always sells higher quality merchandise, is a bit more upscale, pays better wages, and their employees are happy. I’ve gotten some good deals at Wal-Mart, and I’ve seen cheap crap that breaks at Target. I’ve seen very clean Wal-Marts with wide aisles, and Targets that were dirty and had narrow aisles. But I am willing to bet that there are people who refuse to shop at Wal-Mart because they believe the perceptions of the store.

My point is, you also have to get past the conventional wisdom and look at the merchandise for yourself. You may find something of higher quality at the so called “dirty, cheap, poor people, NASCAR fan” store than you would at the “cleaner, snootier, suburban soccer mom” store. But you have to be willing get past the perception and take a look for yourself.

Point #4-Purchasing Items on Sale

Purchasing items on sale is a great way to save money if they are items that you would have purchased anyway even if there hadn’t been a sale. The problem is that many people purchase items they would have never purchased except for the fact that they were found on sale.

Solution: When purchasing items on sale, only purchase those items that you would eventually purchase at full price. If it is something that you would not normally purchase, then don’t.

Again, this is where the price book helps. When you know how much something costs per unit at regular price, you will be able to tell if that sale price is really a good deal or not. Buying things you don’t normally buy to save a few dollars isn’t saving money at all.

Point #5-Buying in Bulk.

While buying in bulk can reduce the cost per unit of the item you’re purchasing, it only saves you money if you consume all of it and consume it at the same pace you would if you had a lesser amount in the house.

Many times when people purchase in bulk, a good portion ends up in the trash because it goes bad before it can be used. On the other hand, some items, such as candy, often get consumed at a much faster pace when there is a lot of it around than when there isn’t. Either of these scenarios can make purchasing in bulk more expensive, even with the lower unit price.

Solution: Take the time to make sure you carefully consider an item’s shelf life and how it will be consumed before buying it in bulk. To solve these issues, consider buying in bulk with friends so that you get the better price yet take home a unit size that avoids these problems.

This is why I don’t have a Sam’s Club membership. There isn’t much I can buy in bulk that won’t spoil before I use it, plus there is storage considerations. My husband and I wanted to take a look at Sam’s to see if it would be worth the money spent on a membership to make certain bulk purchases, but Sam’s doesn’t do day passes. We may try to go with friends who have a membership to see for ourselves.

Bonus Point #6-Clipping Coupons Saves you Money

This isn’t in the original post, but this is something I’ve found for myself.

Coupons can save you money, but the common mis-perception is that they always save you money. Coupons do not save you money if they are for items you do not normally purchase. Coupons also do not save you money, because many times, to get the deal, you have to purchase more than one item to get the savings. The main intent of the coupons you find in the paper is that the manufacturer is trying to get you to buy a specific product.

I’ve tried clipping coupons in the past, but more often than not it was a waste of time and the money I spent on the Sunday paper. The store brands were always cheaper, even after applying the coupon discount on the name brand item. When I had to buy multiple cans or boxes of an item to get the discount, I did not consume it all. The unused item went to waste and that was money thrown away.

Coupons can save you money if they are for items that you normally purchase. Coupons can also save you money if you shop regularly at a store that has double coupon days. I’ve found that store coupons tend to be a better deal than manufacturer’s coupons, but again, you have to be careful and do your homework. Stores still want you to come into their doors and spend your money there.

The same principal also applies to “frequent shopper cards”. Basically, you sign up for a card and you get deals that are available to only those who have the card. You have to use the price book (and I can’t stress the price book concept enough) to determine if the deal is really a deal.

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In the end, if you really want to save money, you can’t believe the advertising. You really need to look past the marketing and do your own homework first. Just because the advertisement for Store A says they’re cheaper, doesn’t mean it is. They want you to come and spend your money there. It’s up to you to determine that for yourself.

Another trend I see is the “green” trend. While I do not dispute that we need to be conserving energy and throwing away less stuff; bottom line, companies are jumping on the green bandwagon because they are trying to sell you a product. Marketers are using a current trend to get you to buy a specific product. It is up to you to determine if they are really green or just trying to sell you something.

In our consumerist culture, it seems that the ability to think critically has disappeared. It saddens me, and it frightens me, that people will take what they see in advertising at face value instead of taking the time to see if they really need it. But this is another article for another time.