Big Bang, Little Buck

The best way to penny pinch is to basically forget everything you know about penny pinching in the first place; ditch the coupons, stop driving to 5 different stores, and learn how to prioritize for the biggest saves.


The web is full of financial advice- most of it written by people who think the impoverished buy $5 cups of coffee every day (or “The Latte Factor” as Piggy and Kitty like to call it over at Bitches Get Rich) and drop $3 on a roll of fluffy ass paper towels each week like it’s just couch change… Any of us who’ve actually been impoverished at any point in our lives, though, know that’s not usually the case.

Ok… Some of us really do drop $5 on Coffee every morning. But who can seriously begrudge us for it? The caffeine need is strong, I tell you… But also: It has a wide range of mood, energy, and health boosting effects that are good for you- even if it is pretty much immediately negated by all that sugar.

As annoying as financial advice from a nevimp is, though? Sometimes their advice has nothing on the well intentioned advice given by those that should probably know better; people who live somewhere around the lower middle class marker- not quite in poverty, but still usually pinching pennies for one reason or another.

Actually growing up in poverty, though, remains another boat on a different sea entirely. I know, because I grew up in that space… And in that space, there are lessons that those who’ve never lived in abject poverty will likely never learn or understand. Those lessons are why most financial advice for saving money (whether from the voluntary penny pinchers or the never impoverished at all) is usually a load of horse shit; why it feels unrelatable and out of touch; why it makes us roll our eyes… And why it doesn’t save you as much money as you think it does in the long run.

See, a lot of them focus on saving money by doing three main things: 1. Cutting out superflous purchases, or “luxury expenses” we don’t really need; 2. Buying lower priced items (usually generic brand), secondhand items, items in bulk, or items on sale; and 3. Increasing your reuse rate, and reducing your overall waste.

Now, don’t get me wrong. There’s not a whole lot wrong with this advice at its core. It’s solid, for sure; being frugal, penny pinching… When done correctly, these are all great tips that can definitely help you save money… But the conventional wisdom found in the background of most this advice takes a sort of “throw everything at a wall and don’t wait around to see if it sticks” approach to it.

In other words, it encourages you to do every “money saving” action you can think of all at once- but it never actually encourages you to number crunch the data on the back end to see just how much you’re really saving when it’s all said and done. And in doing so, it ultimately fails to acknowledge one of the most important lessons of saving money… A lesson that only poverty can really teach you: Not all savings are equal.

I hate to break it to people, but some savings literally aren’t worth your time. Thankfully, there’s actually a pretty simple formula to figure out if you should waste your time on shit or not.

Formula

Admittedly, my Algebra is a little rusty. Still, it’s a pretty fool proof formula that’s served me well over the years- and I promise, it looks far more complex than it is in practice.

Here, I’ll give you an example

Let’s say that I currently purchase paper towels. In an effort to save money, I’m trying to figure out if switching to a product like Cloth Rags is going to be worth my time… First I need to figure out how much of that product I’m currently using within a specific time frame. I also need to figure out what I’m currently paying for that product per individual purchase, and how much I’m paying for my total use within in that time frame.

So let’s say I already buy the cheapest option that my store of choice sells- which is $0.50 cents per roll. Now let’s say I only use one roll per month. If I set a time frame of one year, that means I spend roughly $6 per year on paper towels.

If I want to make the switch to Cloth alternatives, I have options as low as $6, to as high as $86, depending on how I go about it… Whatever I pick, though, I also have to consider how many I’ll need for my kitchen. And don’t forget the fact they’ll have to be washed more frequently- and the fact that they should be replaced every two years. I also can’t forget the fact that, if I run out and need more immediately, they’re not as easy to get as paper towels are.

So let’s say I decide to buy, and I find some for $1.00 per rag. If I buy 5 then I’ve spent $5 USD- which is $1 USD less than I spend per year on paper towels; if I replace the cloth alternatives every two years like you’re supposed to, then that’s a $2.00 USD savings overall.

That $1 – $2 USD savings is automatically negated the second you factor in the order’s shipping costs compared to the gas you’re already using to go to a store you were already going to in the first place… But we’ll roll with it for the sake of this example; now the big question is: Is a savings of $1 – $2 USD per year worth the time and effort it takes to achieve said savings? More importantly, will a savings of $1 – $2 USD per year make any sort of tangible financial impact on my life?

No, it’s not.
No, it won’t.

What I’d save by making the switch is negligible and has no significant long (or even short) term effects on my finances; it might feel good to see that extra dollar sign at first, and it might seem like I’m saving myself money. But the reality is that I’m not. So why bother doing it in this first place? The short and sweet of it is that you shouldn’t.

At best, they only provide marginal pocket change and a little bit of wiggle room. Wiggle room isn’t the same as financial stability, however, and pocket change isn’t the same as an emergency fund- which is what most people are looking for when making budget cuts like these… And for those trying to save for shorter term or even immediate financial security? Small changes like this are completely worthless over the long term.

Small savings like that are the equivalent of interest on your savings account: It only racks up significant benefits over longer courses of time (think near decades instead of single years)- and only if it’s left the fuck alone to continue accruing. Relying on them to make up the bulk of your savings means that all you’re doing is wasting valuable time and effort that could be better directed at something that will actually have a greater financial impact overall.

Figuring out how to do that, though, requires learning how to prioritizing two things: Labor (or how much effort is required to achieve the savings), and purchase (or how you’re purchasing those items). For the fancy pants smarty pants out there, this is what’s called your Return on Investment– a necessary factor of consideration if you actually want to achieve anything… Because you can’t just throw shit at a wall and not pay attention to what sticks. You have to be intentional about what you’re throwing at the wall in the first place.

So how do you do that?

Easy… You use the damned formula; compare what you’re already paying for something (B) to the cost of the alternative (A)- including the hidden fees we’re not taught to pay attention to, and the amount of extra labor that may be involved… If A is significantly greater than B? Congratulations. You’ve got a good deal, and you should probably consider prioritizing it… But if A is equal to or less than B, or if A’s only marginally greater? Then don’t bother with it unless you need to.

The additional resources, labor, and expenses necessary will inevitably zero it out- meaning you’ll be creating more work for yourself on the back end, and not actually getting any benefits out of it. Sometimes you’ll even wind up paying more than you would have if you’d just stuck with your original purchase. Either way, you’re just wasting your time.

However, some extra labor and expense can be far outweighed by the long term savings… Take my Husband and I’s Coffee consumption as a second example: Normally my Husband needs 2 cups of coffee and a Monster before work. In order to provide that we were purchasing (3) 10 packs of Monster Energy Drinks and (4) 20 ounce bags of preground coffee a month. On the lower end it would cost us about $100 USD… More often than not, however, we found ourselves spending upwards of $120 USD.

Conventional wisdom would tell me to cut back on the coffee we consume and to stop buying the monster because we don’t need it. But here’s where another important part of prioritizing purchases instead of cutting out entire purchase groups comes in: My Husband gets debilitating Migraines if he doesn’t have enough Caffeine– which means it actually costs us more money not to buy Coffee, than it does to make a smarter decision about how we buy it. Cutting back on Caffeine, then, isn’t a realistic or viable option for us.

More importantly, we fucking like our Coffee and it’s one of the few “luxuries” we allow ourselves to splurge on; I’m vehemently against the idea that those trying to save money should be shamed for keeping what others view as a luxury in their budget… Not only because it’s just plain fucking rude, but also because one man’s luxury is most certainly another man’s necessity- as I’ve just exhibited.

So how do you save money without outright cutting what some would see as a completely unnecessary and frivolous expense? For us, the answer ended up coming in the form of Deathwish Coffee; I bought a bag for him as a gift just to try it, and a miracle basically happened: He only needed one cup- and didn’t even touch his Monsters… So we kept ordering it.

Then we found out they actually had a subscription service available for 5 pound bags… Better yet, the subscription service was currently on special- and that special was permanent. So instead of paying the standard rate of $80  USD + Shipping (or worse, the $120 I was already spending on our usual setup), I would always pay $64 USD. You can bet your shiny metal bottom I signed up for a monthly delivery of a 5 pound bag of unground Coffee Beans quicker than he could blink.

One French Press and Coffee Grinder later, it’s a little more time consuming and labor intensive than our previous method. But even when accounting for the extra cash it took to invest in it, and the extra labor I dish out every morning to make it work? I’m still saving $55 USD a month… More, actually, when you include savings from the company’s reward points system (which can get me a free month), or their occasional free shipping specials (which I usually qualify for). Without factoring that in, though, I’m saving a baseline of roughly $660 USD per year by having the subscription service.

Holy shit !

Is it the $1500 USD I’d be saving if we cut coffee out altogether? No. It’s certainly not. But it’s something- and that something’s a hell of a lot better than the $5 or so I’d save by pinching pennies on measly purchases and arguably irrelevant shit. More importantly, it does so without affecting an important part of our overall quality of life, or compromising my Husband’s continued ability to earn an income- and that’s an important consideration.

What people often miss is that saving is about… Well… Saving. And the point of saving isn’t to deprive yourself- nor is it to reduce your quality of life. It’s to improve it. And while sometimes that does actually mean certain “luxuries” get to be sacrificial lambs on the Altar… The fact of the matter is that, sometimes, if you want to save money in a way that has a lasting and significant financial impact? This is how you actually do it: By prioritizing what you throw at the wall to begin with.

As Penny of She Picks Up Pennies writes about hacking in one of her articles:

“If you spend hours upon hours and days upon days, hacking airline miles, hotel stays, or grocery cashback bonus points, you’re not hacking anything. The point of a hack is optimization”.

And that doesn’t just apply to hacks… It applies to saving money as well.

The point of penny pinching is to save as much money as possibly. But the reality is that it takes more than just cutting out fluff purchases altogether, minimizing waste, and reducing your need to purchase things… These things certainly help with little items, but their overall impact is usually small and short lived; sometimes throwing everything at the wall only hinders us, and winds up costing us more money than we actually save.

To really save money, you can’t be hyperfocused on eking out every literal microscopic penny that you can find… You have to find where your largest room for improvement is- what spending habits actually have the largest and most immediate impact. More than that, you have to find a solution that improves them in a way that requires the least about of labor and additional expense.

And let’s face it: Realistically speaking, $1 a year isn’t going to do anyone any legitimate lick of good. Neither is a bunch of little $1 savings; granted, (5) different $1 savings is still $5… But $5 isn’t going to get you anywhere major- not now, and not 5 years down the line. $660 USD, though? Well… That’s half a freaking vacation.


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12 thoughts on “Big Bang, Little Buck

  1. driftyness says:

    “I hate to break it to people, but some savings literally aren’t worth your time.” Yes! One more time for the people in the back!

    I absolutely hate nickle and diming myself to death. I know someone who has an interesting way of looking at things: she “buys” time, if that makes sense. Will she save more money or make more money in the same amount of time? If she will make more money, she won’t always bother with saving money because it doesn’t make sense.

    I liked that you talked about how money management is different if you really haven’t got a lot of it. I’ve seen some pretty cringe-worthy exchanges around this.

    Also, have you ever read the blog Afford Anything? She seems to have a similar no-BS approach to finances.

    Liked by 1 person

    • Anna B. says:

      Buying time’s definitely an interesting way of looking at it! But yeah. Unfortunately there’s more than enough cringiness about the topic.

      I haven’t, no. I’ll check it out, though! I’m always looking for new blogs to read.

      Liked by 1 person

  2. Bry Jaimea says:

    This is such a great post and really informative, especially for those who are struggling with things like this. Financial management isn’t something that can be learned from parents necessarily (mine were useless!) and it still isn’t on many (if any!) school curriculums. So a big thank you for putting in the work for this post and sharing what you’ve learned xx

    Liked by 1 person

    • Anna B. says:

      If I followed every piece of advice my own mom gave me, I’d be in debt up to my ears lol. Most financial advice elsewhere isn’t much better, either.

      Financial management is so personal and complex it’s impossible to give any sort of hard and fast advice. But there are definitely skills you can learn (or, if you’re unlucky enough, be forced to learn) that are more applicable- and certainly more useful.

      Liked by 1 person

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