Money Smart Tip #6: Avoid Saving Yourself into the Poor House

clearance 300x199 Money Smart Tip #6:  Avoid Saving Yourself into the Poor HouseIt is a ton of fun to find free toothpaste, 12 boxes of free pasta, a leather bench originally $300 for just $75, etc.  Finding a great deal is addicting.  I love the adrenaline rush and shopping high of saying – And I only paid $…!

It seems like it is all positive, right?  You are buying things on 75% off sales, Target’s clearance end racks, at thrift stores, or from garage sales, etc.  You only paid $5 for that shirt after all – that’s a steal!  You are saving your family SO much money.

However, there is a dark side to all of this saving.   The lure of saving money can be as much of an addiction as alcohol or overeating.  It is quite possible to save yourself into bankruptcy.

Saving Yourself into Bankruptcy

  • If you are buying a bench for $75 that you don’t need, that is $75 you could have put into a college account or toward paying down your mortgage more quickly.
  • If you are buying 5 bottles of shampoo because they are $1 after coupons, but you don’t use that brand and end up giving it away or throwing it away – that is $5 wasted.
  • If you are buying 4 shirts at $5 each because it is such a good deal, but you don’t end up wearing them because they don’t really work for you – you’d have been better off spending $20 on the one shirt you wear every day.

What about the Free stuff?

You bought 12 boxes of free pasta – how can that be bad, right?

What about when you have so much free food that it expires?  Maybe you are arguing that you didn’t spend any money, so it doesn’t matter if you use it or not.

But here’s the flip side – did you really get it for free?

How much did you pay for the coupons you used to buy that item?  How much was the toner to print out the coupon or the newspaper or the coupon clipping service?

How much was your gas to get to the store?

But most importantly…

The Value of Your Time

How much is your time worth that you spent shopping instead of interacting with your family?

How much would you have made if you spent that same time updating your resume to get a higher paying job, or taking a class to improve your skills, or following up leads for some other money making enterprise?

My point?  Be careful.  There is always an expense when you spend money in order to save it.  Don’t fool yourself into thinking it’s always positive.  Sometimes it is and when it is – GO for it!

Just make sure you don’t get blinded by the allure of the Clearance ticket and buy things you don’t need or won’t use.

4 Responses to Money Smart Tip #6: Avoid Saving Yourself into the Poor House

  1. Catherine says:

    Great points! I think as a society we are so trained to spend spend spend we really forget how to step back and look at deals objectively.

    • admin says:

      I am so guilty of this! I see 75% off and my adrenaline kicks in. I am trying to teach myself to be more objective and to realize that even those – It’s only $1 – items add up when you buy enough of them. I have a long way to go!

  2. Barb says:

    It’s such an easy trap to fall into. Thanks for the reminder that the ‘great deal’ is probably going to get stuffed in a closet with all the other ‘great deals’ I find.

    • admin says:

      I do love myself a great deal! This is my financial weakness by far. I have a goal this year of really getting smart about buying quality items that we NEED, rather than chintzy stuff that’s on sale and we don’t really need or want. I have a long way to go! :)

Leave a reply

CommentLuv badge