False Economies

by Barbara J. Sloan

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The recent change in gasoline prices led me to think about what frugal living really is. While saving money is certainly frugal, I began to realize that sometimes when I try to save money, I really waste it instead. Here are some examples. All address myths many of us believe about saving money.

Have you seen the ads that advise new parents to buy life insurance for their babies while they are "still insurable?" Not only is this insurance expensive per dollar of coverage, but in most cases, it is totally unnecessary. The primary purpose of life insurance is to replace lost earnings. Babies usually do not earn money, so there is no income to replace. Usually the baby will be financially better off if their parents bank the insurance premium money and earn interest instead.

Do you hang onto that twenty-year-old refrigerator or other appliance because "it still works?" In some cases, new appliances will actually pay for themselves. For example, a new refrigerator of comparable size and style is likely to use only half as much electricity as a ten-year-old model and maybe a quarter of the 20-year-old model. Therefore, you might be better off buying a new appliance that will pay for itself in energy savings in a few years while providing more reliable service.

Do you buy things just because they are on sale? Do you own clothing that still has the tags after weeks or months? Did you buy that jar of spaghetti sauce last year? Did you put away food as the government recommended after 9/11 and never use or rotate it? How old is it now? Money on the shelf is not working for you. How much money earning interest does all that extra food in the pantry represent?

Do you buy "convenience" foods, such as ready-to-cook dinners? This might be the worst false economy of them all. Most convenience foods are high in saturated fats, trans fats and sodium, which most of us do not need. If eating these undesirable foods leads to obesity and its accompanying illnesses, you may spend more time and money at the doctor's office than you saved at the grocery store. Check the label. If it is high in saturated fat and sodium, leave it on the shelf. Make an easy vegetable-based stir-fry instead.

Manufacturers call the largest size of detergent, cereal, etc., the "economy" size. Especially when smaller sizes are on sale and more especially if you have a coupon as well, the so-called economy size might actually be more expensive than smaller boxes. Be sure to check the per unit prices and do not be fooled by one size being rated by the pound and another by the ounce or the count. Do the math!

Even in "warehouse" stores, larger sizes and quantities are not always cheaper. Consider how much you can use in a reasonable amount of time, the "cost" of storing the extra supply, and whether any will be wasted, especially with fresh produce and other fresh foods. If you have to throw it out, it is not a bargain at any price. You might as well save time and just throw the money in the garbage.

Do you belong to a warehouse club because they have lower prices on big-ticket items like plasma TVs and tires? If so, do you actually plan to buy those items this year? At $45 or so per membership, people like me with small households may find they save more money at grocery stores and sales. With high-tech items, waiting until the "new" wears off usually results in much lower prices for the same functionality.

Do you run to the library when you realize a book is due? In my town, an overdue book costs a dime a day. I live three miles from the library. At an average cost of $2.20 a gallon and my car's 30 mpg, I will spend 46 cents on gasoline to drive to the library and back. If it costs 43 cents per mile to operate my car, the trip costs $2.56. Hardly worth it to save a few dimes. It might be another story, however, if I have to return three videos on which the fine is a dollar a day. Better yet, keep track and return those books when you have other errands in the same vicinity.

Do you bring the same foods for lunch to work from home every day? Do you eat at your desk? Lunchtime should be break time. Whether you exercise or go out for a healthy meal, take a break and improve your health at the same time. You will probably find yourself more productive in the afternoon. As we are often told, time is money.

No doubt, you can find other false economies in your own life. Weed them out and enjoy a more frugal and satisfying life.

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