- Personal Finance
It's Not How Much You Save But How Much You Spend
People get so excited about a deal or a bargain. They find something on sale and can't wait to purchase it, thinking the whole time about how much money they saved. I am going to challenge you to think about it differently though. While saving money is great and I encourage everyone to do it, the bottom line is - it is how much you spend that matters, not how much you save.
I was watching Extreme Couponing this week and there was a classic example of this skewed way of thinking. The two women shopping were so excited because Maalox was on sale for $5.49 and they had $5 coupons. They went on and on about how they were going to save $5 on each bottle and they bought 15 bottles. They were going to save $75 on a product that they admitted they don't even use. One woman made the comment that how can someone pass up that kind of savings. My question is why would you spend $7.35 on a product that you don't need or use. I can see buying 1 bottle to have on hand just in case, but 15 of them? I don't see it as a 91% savings, I see it as a waste of over $7.
Manufacturers, stores and marketers have us figured out. They know that everyone likes a bargain. So they proclaim huge savings to try to get you to buy more. Now if you need an item and were going to buy it anyway, then I am all for buying it, even stockpiling it if it is that great of a deal. Most people don't think this way though. How many items do you have in your house that you have never used, eaten, worn, etc? If you think about why, I bet it goes back to you got a great deal and saved a lot of money on the item so you bought it for that reason.
When you come across a great deal, a rock bottom sale price, a drastically reduced item, or some other scheme the marketer has come up with, please stop and think about a few things. Do you use that item? Do you need that item? Do you have to have it right now? Do you have something like it already at home that can be used in it's place? How much does it cost? Not how much you are saving, but how much money will you have to pay for it? Is it worth that amount of money? Could that amount of money be better spent on something else? Start paying attention to how much it costs, not how much you save and I bet you will put half the items back on the shelf.