What the Gas Crisis Taught Me about Saving Money


There have been some excellent posts in the blogosphere about how to save money in this ridiculous economic crisis. New Midlife Mommy wrote the most informative piece on clipping coupons that I’ve ever read in my life. If you clip, you’ve got to go over there.  There’s also a great post up at Antique Mommy where readers share what they’re doing in the money crunch.

I am very much “into” money. I do all the bills, I check the account balances, I figure out what to put where and how much. I really enjoy it, actually. I pay attention to sales and shop bargains. I come up with the family budget. I check interest rates to see if we should put our money elsewhere, and figure out whether we should try to pay off our car faster or save it for something (emergency fund, retirement, etc) instead.

But over the years, I’ve realized that typical money saving methods do NOT tend not save our family money. And here’s the main conclusion I’ve reached: Saving Money is not necessarily the same as Spending Less Money. Or, in other words, getting a “good deal” is a bad idea if I buy something I didn’t need to begin with. Or, to put it one final way, it’s far more important to look at the big picture of my overall spending, rather than the little picture of savings on an individual item. For example:

1.) Clipping Coupons: I did this obsessively for years. But when I really tracked our money, I realized I was buying items that we didn’t use or need. For example, if I had a coupon for peanut butter, and the grocery store gave double value to coupons, it’s a “great deal,” right? It’s not a great deal if I already had peanut butter at home. So even though I just saved money off the cost of peanut butter — if I didn’t have a coupon to begin with, I would have not bought it at all.

I know what you’re about to say — “But eventually, you would need more peanut butter, right? So then you already have it sitting in your pantry, right?” Well, yes and no. If I hadn’t bought the peanut butter with the great coupon, I would have waited to purchase it when I really needed it, which could have been several weeks later. The savings of putting off purchases is sometimes really huge in and of itself. It’s more money in my pocket to use NOW on things really essential, and less money spent overall.

Also, if I had run out of peanut butter at home, I would have probably gone several days eating another kind of sandwich. Those days I’m not eating peanut butter and eating other things in the pantry saves me more money overall, than the coupon ever would have. And remember, manufacturers and grocery stores make coupons because they make big bucks off of coupons not because they’re giving a consumer a great deal. If a coupon causes you to enter a store when you otherwise didn’t have to, then the coupon is costing you way more than it’s saving you.

2. Shopping sales: I always pride myself on a great bargain. Have you been to my house? If you have you know that I talk ad nauseum about the beautiful 8 x 5 rug I have in my office, for which I paid $75. So yes, I do shop sales. But for the most part? Sales do nothing but cause me to spend money. If I take the kids to Kohl’s to buy them a pair of pants, and there’s a buy-one-get-the-second-one-at-half-off deal — this theoretically works well if I have two kids who each need a pair of khakis. But it only works if I just buy the two pants, and not get so excited about the sale that I buy FOUR pants. Because many times, I justify purchasing more things when there is a great sale. This ends up causing me to spend more money overall, despite the fact that my “savings” is big.

Here’s another example. What if only one of my kids needs a pair of pants. And what if the sale is 50% off all kids’ pants? That’s a great deal! But what will I do? I will walk out of the store with 2 pairs of pants, instead of the one I needed. “Aha”– you’re saying — “You still bought 2 pairs of pants for the price of only 1 pair! So you spent what you planned on spending and got 2 pairs of pants instead! That’s a steal!” Yes, that’s true. But the TRUE savings would have been if I just bought 1 pair of pants at 50% off, because that’s all that I really needed. The TRUE savings is not the amount of savings off a particular price– the TRUE savings is the tab at the end.

3. Buying in Bulk/wholesale warehouses. Scribbit recently wrote a great post about her toxic relationship with Costco. Her main point is something I’ve been trying to tell friends for years — Buying in bulk costs you more overall. If you don’t believe me (or Scribbit), I offer you a challenge. Look at how much you spend on groceries and household items every month when you buy in bulk (either at a wholesale warehouse or at a place like Target). Then, stop buying in bulk, and only buy what you need for a certain amount of time (6 months, whatever). Now, calculate how much you actually spent. I’m willing to bet you spent less money money by NOT buying in bulk.

4. Quit going to the More Fun Stores: Scribbit’s relationship to Costco was very similar to mine with Target. I knew I spent too much at Target, but I didn’t realize how much until the Atlanta Gas Crisis earlier this fall. Once I realized that I’d have to go several weeks on one tank of gas, I cut out all unnecessary trips, which meant that I went to the doctor’s office and the dimly lit, Ugly, Boring grocery store around the corner. No more trips to Target.

So for a period of nearly 2 months, I went virtually nowhere but these two places. The Ugly Boring Grocery Store did wonders for overall reduction of what I spent. Yes, it’s much more expensive to buy lightbulbs and diapers at the grocery store than at Target, but again, you have to look at the big picture. Spending more on a lightbulb at one store where you know you’ll get in and out quicker (and spend less overall) costs far less money than going to Target and dropping $25 to $50 that you had never intended to spend to begin with.

The result? In the past two months, my spending has decreased dramatically. I couldn’t believe my last credit card statement. We saved so much on groceries and household items because I simply limited my spending to the Ugly Grocery Store that I was able to make an extra car payment.

So the irony of the gas crisis? Even though gas was outrageously expensive, our expenses went DOWN overall, by a couple hundred dollars at least.

What tricks do you do to save money that sometimes fly in the face of conventional money-saving advice?

Advertisements
Uncategorized

12 thoughts on “What the Gas Crisis Taught Me about Saving Money

  1. Hi Anjali,

    I just came by because I saw your comment on Antique Mommy…I think we’re soul mates.

    Well, maybe not SOUL mates, but we’re certainly on the same page! I just wrote a post about this too, I wrote one today about fearing the state of the economy and then I wrote one today that will post tomorrow about the exact same thing you’re talking about…

    OH, that makes the nerd inside of me giddy.

    …wait, who am I kidding, I AM the nerd inside of me 🙂

    I enjoyed your post, I’d love it if you’d stop by and read mine!

    Renee,
    rightfootforward.wordpress.com

  2. You make a great point about saving money versus decreasing your spending. You really have to know what things cost to make the best decisions, especially for groceries.

    You would hate my house. I buy organic flour in 25-pound bags. In my case, it makes sense for me because I use it quickly enough, and the price of organic flour has risen 100 percent since I originally purchased my current bag. I don’t think I could get that return on investment elsewhere in the stock market–or at least I’m not clever enough.

    I think conventional advice can work depending on your situation.

    🙂 I have been writing the FRUGAL LIVING BLOG over at Families.com for the last two years, and one thing I always stress is to reduce, reuse and recycle whatever you can, be it a pair of pants or a car. That is general advice that usually works for most people.

  3. Great to meet you, Renee. Thanks for stopping by!

    Mary Ann, your Frugal Blog is awesome! Anyone trying to save should check it out.

    I should confess here that I actually do buy 25 pound bags of rice, but it’s one of the few bulk items we buy that actually does save our family money in the long term.

    And the recycling has also been a big saver here — we are using far more rags to replace paper towels, and packing trashless lunches, than we ever have.

  4. I am just the same way about Target. I spend a lot every time I step in that store. I completely believe that you saved a lot shopping at your local grocery, even when you spent more on diapers and lightbulbs.

  5. In 2008, I started trying to act more European in my food shopping. There’s a grocery store between here and Helen’s school (which is too far away to walk to, and she’s terrified of the bus). So we will go there almost every day after school and get the items needed for dinner that night and possibly the next, and anything we might need for breakfast or lunch in the next day or two.

    Even though I go to the grocery store MORE, I spend less TIME in there and ultimately spend a LOT less money. My monthly grocery bill is down about $200, I’d estimate.

    I’m also walking to/from the gym when I can… etc. I drive a LOT less — tanks of gas last me almost another week now.

  6. Thanks for the back up on this–while I hear that some warehouses are better than others I just don’t see that the Costco here does it for me though it has strong supporters who will defend it. I guess it’s just not for me.

  7. Elaine,
    You touch on something I meant to add to the post but forgot to — shopping more often for groceries. I’ve been going twice a week now instead of just once a week (the produce was never making it the whole week so I had to go anyway) and I’ve found that my overall monthly spending has decreased, not increased.

    All of my Austrian relatives do the daily market thing. They must know what they’re doing!

  8. Shopping the “loss leaders” of the store and in season items also helps. For example, this week, whole turkey’s were ridiculously low, so I bought three of them for my freezer (the amount I can comfortably cook and serve in rotation in a reasonable time without my family getting sick of it. There is no point in overbuying.) I also turn parts of the whole turkey into turkey lunch meat, turkey soup, turkey pot pie, etc, meals that can either be eaten fresh or frozen for quick meals later. I didn’t purchase anything else on that trip except eggs and milk.

  9. Ok, I totally get you on the buying in bulk thing. BUT STOP SHOPPING AT TARZHAY? ARE YOU MAD, WOMAN?

    SInce the Tarzhay is CLOSER than the bad grocery store, I can still justify it. I rarely walk out with any more than I need. I only bought one extra thing today because it was a christmas gift that I had been looking for (and a great price to boot). Also? Coupons are evil. I never buy the stuff that they print coupons for. If they made more pullups coupons I’d get them.

  10. I know DG — not shopping at Tarzhay! I get teary-eyed just thinking about it!

    But it’s a good 10 minute drive for me here, so it’s not as difficult to avoid it.

    Speaking of pullups, diapers.com has a promo code for $10 off your first order of $49 of more and free 2-day shipping. If you want the promo code, let me know and I’ll email it to you.

    I’ve never gotten diapers through them before, but that’s a bulk purchase that won’t take me inside a store — which is always good.

  11. I really liked this post. It makes sense. I also have one of those dimly lit (and kind of stinky) grocery stores just a couple of blocks from me, but I almost never go to it. Your post has me rethinking … especially considering how much I drop on “essential items” at Trader Joes whenever I go.

    About buying in bulk: We didn’t have a Costco membership for about 5 years and didn’t really miss it, but for some reason that I don’t remember, we re-joined a couple years ago. Now I buy things like paper towels, toilet paper, chicken broth, ketchup, Ziplock bags, and batteries on my infrequent trips to Costco. I have a standard list and I only go once in a very great while because I find the place to be very unpleasant and crowded. If I’m by myself, I usually can stick to the list. If my family comes along, all bets are off. We walk out of there with loads of stuff we don’t need.

    It’s not that I think I’m saving money by buying toilet paper by the 100s; it’s that I will stay out of Target longer if my garage is stocked with paper goods and if my pantry is full of chicken broth and ketchup. Also, at our vacation cabin, we are far from a store (40 miles), so it’s nice to have a stockpile of goods.

  12. I’m totally with you– I rarely go to Target anymore because I’m a terrible impulse shopper, and I don’t go to Trader Joe’s either, for the same reason.

    I do clip coupons though, but I do really only use them for things I’d buy anyway. Between my store bonus card and coupons, I’ve been saving an average of $15 per trip, which isn’t huge, but is worth the 30 minutes or so I spend on clipping and sorting the coupons. I haven’t bought full-price toilet paper, cleaning supplies or cereal in six months, I’d say.

    I also made a big commitment this summer to using less packaged stuff in the girls’ lunchboxes, and I think that has made an impact on our food cost also. But my biggest cost-saving measure is just *thinking* so much more before I spend money, even if it’s a small amount.

    Have you ever read TheSimpleDollar.com? It’s my favorite frugality blog these days.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s