Saturday, June 11, 2011

Am I saving money?

A lot of people who find out I'm frugal assume that I must use coupons, or that I buy things on sale.  I don't.  These people assume that coupons and sales allow them to save money.  They don't.

If you see a dress that originally cost $125 and you buy it on sale for $25, you haven't saved $100 -- you've spent $25.

This is an important distinction, because a lot of people who say they're interested in "saving money" really mean they're interested in getting a lot of stuff for less money.  But if you keep getting a lot of stuff, even if you "save" a lot while you do it, you end up spending a lot of money.

The truly frugal person doesn't think about how much she "saves" while buying something; she thinks about how much she spends, and also about what she spends it on.  I don't buy clothes on sale, but because I do yard sales, I can buy pretty much all of the clothing I want for $1 a piece or less.  Because I repair clothes, my clothes last longer and I need to buy less of them.  I don't use coupons, but because I cook from scratch, use very little meat, and try to buy vegetables while they're in season, there have been many months where I spent less than $100/month on groceries for two people.  [Why two people?  This was before we adopted our second son, and while my husband was serving overseas in Iraq].  I don't save any money at all on health club memberships or yoga classes, because I run with my friends (for free).

We will often justify this sense of saving by saying we "needed" something.  The dishwasher broke and we needed a new one; the store had one on sale so we "saved" $100 by buying that brand.  But in fact, the vast majority of what we think of as "needs" are really just "wants".  Many people in this world survive without dishwashers.  Many people in this world have so few clothes that they do not need closet organizers.  Many people in this world survive without color printers, or cars, or even refrigerators.  I'm not saying those things are bad -- I have all of those things myself -- but I also know that when I bought those things, I spent money; I didn't save it.

At the same time that I try not to spend money on things, I think it's important to make sure that I do spend money on people.  Taking a friend out to lunch, providing a decent wage for my sons' babysitter, supporting local charities -- those are areas where I try to find ways to spend more.

So here's how you really save $100:  you take $100 from your paycheck and you put it in the bank.  And then you leave it there.  The end.  

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