Penny wise, Dollar Foolish: The Right Way (And The Wrong Way) To Save Money

How To Save Money The Smart Way

We all like to save money, but many of us forget that in the pursuit of a penny wise lifestyle, we may, at times, become dollar foolish. How do we avoid falling into the common traps? By knowing when it’s wise to save money, and when you just need to walk away and take a hit. Here are some guidelines to help you along the way.

Time IS Money

We all like to save money, but many of us forget that time is money too. Oil changes are a prime example of this. You can usually get an oil change at a quick lube establishment for $20 or less. However, many people still try to change their oil on their own to save money. This just doesn’t make sense.

Think about how long it will take you to change your own oil. Probably about 2 hours unless you’re very experienced. This includes getting everything ready, buying the oil, getting under the car, etc. Now, when you consider that the oil itself will cost you at least $5 you’re only really saving $15. Divide that by two hours, and unless you think your time is worth less than $7.50 an hour, then you’re not really saving money when you change your own oil.

Waiting in Line For a Price Adjustment

Making sure you pay the right prices for groceries and other items you buy is also an important way to save money, but don’t let it get out of hand. I know one woman who was overcharged for a box of cereal by five cents. She waited in line at the service desk, then waited as they did a price check and then waited even more while she waited for her five cent refund. Not really worth it in the long run, is it?

My rule of thumb is unless the price difference is more than fifty cents, I let it go. If there’s going to be a long wait, I up that amount to $1. I do love to save money, but I don’t want to lose my mind in the process.