When you read a lot of personal finance articles, you inevitably reach a point where you can’t buy a water bottle at the corner deli or buy gas without driving around to find something that’s two cents cheaper a gallon without feeling some sense of shame. Those are unnecessary purchases after all, and everyone knows that spending a few bucks you don’t have to is what leads people to unfulfilled, un-wealthy lives. Or something.
In reality, buying small or inexpensive things isn’t always that big of a deal. Sometimes they really enrich our lives, other times they don’t. What becomes a bigger burden is the mental effort exerted to figure out if this purchase is “worth it,” and what the hell that means anyway.
This weekend, I bought a bouquet of $US8 ($11) peonies for my new apartment, a small celebration of sorts. The few dollars were tiny drops in the bucket of money I had just spent, considering the movers, increased rent, fees and everything else that comes with a move. Unlike those costs, however, the flowers were rather impractical. Beautiful, yes, but purposeless. And so as I walked home with them in hand, I couldn't help feel a twinge of guilt. Sure, it was only $11, but with all the other money I had just spent, was it necessary?
For the Simple Dollar, Trent Hamm wrote a few smart guidelines for deciding whether or not that inexpensive purchase is worth spending money on without that mental anguish.
Don’t Give Away Personal Information
Perhaps Facebook and Google know all of our hopes, fears and deepest secrets already, but that doesn’t mean you have to willingly give your information away to everyone.
“If something is demanding my phone number or my address or, even worse, my Social Security number or my driver’s licence number, it’s not worth saving a few cents or earning a few cents in interest,” writes Hamm. “Not only does this increase the likelihood of things like spam calls and junk mail, it also raises the risk of identity theft. I’m not on board for any of that.”
Pay Attention If It Affects Something You Use/Do Regularly
All of us lead different lives, but generally this means if you can save some money on things related to household tasks, kids, houses, driving for most people, etc., it’s worth at least considering.
“For example, I drive frequently, so money saving tactics like keeping my tires at the maximum recommended pressure and sticking with the maintenance schedule are big values for me,” writes Hamm.
“I drink beverages throughout the day, so training myself to drink lots of water is another big money saver.”
Skip If It Doesn’t Affect Something You Use/Do Regularly
Hamm defines this as less than twice a week, but obviously it will vary depending on the person. “If this frugal strategy affects something I don’t do very often and it only saves me pennies each time, it’s probably not worth worrying about,” he writes.
“I don’t worry about saving pennies on things like coffee shop visits because I virtually never go to coffee shops.”
The reasoning is because it simply isn’t worth the energy to save a few pennies on something that doesn’t affect your life frequently.
One of time’s tested and true hacks is that to get better at anything, you need to start small.
Engage If the New Task/Routine Takes Little to No Investment
Pinching pennies isn’t fun, but if a substitute for something can save you a bit and doesn’t require a lot of effort (or your personal information), it’s worth trying.
Similarly, if you have to sign up for something but it doesn’t need more personal info but it saves small amounts, consider doing it. “This is a pretty broad category, as it includes things like making energy efficiency improvements to one’s home, calling around to get your cell phone bill reduced, and doing a zero interest balance transfer on your credit cards,” writes Hamm. Or upping your retirement savings by one per cent.
Skip If It Requires Continual Investment
If you have to constantly remind yourself to do something differently to save a few pennies now and then, it likely isn’t worth the hassle. As always, these tasks and behaviours will be different for everyone, and you need to decide the monetary threshold yourself. An example might be clipping coupons for a few things that you can just buy generics of.
Ideally, these rules will ensure you’re not wasting time trying to decide between the bath soap you want to use and the slightly cheaper version you think you should buy. If you have your own shopping/money saving guidelines, let us know.