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penny wise lb foolish?

Posted by numbersjunkie (My Page) on
Fri, Mar 22, 13 at 0:28

I'm amazed at some people. I know 2 couples who go through the paper every week and clip coupons and then run to several grocery stores to make sure they get the best deals. Yet these same people buy big ticket items without doing any research or price shopping. I'm talking about home renovations and the like. They accept the first bid or estimate and then make fun of me for the time I spend researching major purchases. Then they suggest that I need to read The Millionare Next Door because I don't play the grocery game and am therefore wasting money. These are highly intelligent people.

I guess they believe the old saying that if you watch your pennies the dollars will take care of themselves. Any one else see this type of irrational behavior?


Follow-Up Postings:

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RE: penny wise lb foolish?

Maybe they are frugal is some areas so that they CAN spend more in others.
I am that way.


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RE: penny wise lb foolish?

They need that proverbial V-8 smack on the head.

It's interesting they don't see the logical conclusion to managing all areas of their spending and decided to wear "budget blinders". But I also don't see any reason NOT to "play the grocery game" either - with or without the aid of coupons.

Several years ago during a household budget cutting meeting we decided to cut the newspaper delivery to Sunday only. I didn't want to give up the coupons thinking I was saving a lot of money by using them. After tracking the coupon savings for 3 months the coupons didn't add up to enough to pay for the Sunday newspaper, so we canceled the paper and saved even more money than using the coupons they contained.

BTW, we have a $125 per month food budget for two adults. Setting a budget amount is the first way to save. On that kind of a budget you stick to nutrient-dense basics, cook from scratch, and make your own "convenience" foods, and don't purchase most of the food items represented by coupons.

I receive coupons from the store for foods I regularly purchase with an occasional coupon for a free jar of peanut butter or a free dozen eggs, and I can download others to my store card from their web site. I stack savings by using them when the items are also on sale. More often than not I can find a similar item at Aldi at a lower price than the grocery store WITH a coupon.

-Grainlady


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RE: penny wise lb foolish?

The only way I can see that as consistent with saving is if they have carefully picked their contractor/supplier/whatever knowing the job would be done right, fully guaranteed, and without major headaches. Ultimately it will cost less to pay a little more for one job done right than one crappy job that needs to be ripped out and redone. Or pay a little more for an appliance from an authorized dealer to keep the warrantee intact vs save a little and risk a major problem.

If it's just literally pick based on the first thing that meets the criteria of what they want, that's a bit crazy.


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RE: penny wise lb foolish?

Maybe they can afford to make the decisions they make without worrying about it and don't understand that you can't.


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RE: penny wise lb foolish?

Yes, I agree that you don't need to shop around if you have a contractor that you know is worth it. But these people don't have any relationships like that. And in my opinion they don't get work that is worth the premium price they pay. One of them had a new kitchen installed and they drilled a drawer wrong - for a knob and not the handles they ordered. So now there is a hole in the drawer front under the pull. It seems to me that any decent contractor would have replaced the drawer front right away, even without being asked. So I don't agree that paying more will always get a better result, And it makes me wonder what other "defects" there are that may not be so obvious. I think these contractors spotted these people as an easy target. I wish I had something to sell them!

I also agree that coupon clipping is a good thing if you have the time. But I work full time at a professional job, have my own clients on the side, manage our vacation rental property on my own, as well as managing our finances, investments, and general household matters. I have 2 college age children, and no cleaning service, and we keep our vehicles until they die. I just can't imagine spending the time and gas needed to make money from playing the coupon game and running all over town. But I can't imagine plopping down money for anything major without doing "due diligence".

And yes, one of these couples can probably afford anything they want. That's due in part to the fact that they had a downs syndrome sibling declared a ward of the state so they were able to prevent having to sharing their inheritance with her. Then they bought a condo at the shore and a new mustang convertible that sits in the garage. They are the ones who implied that we weren't frugal because we don't run all over town to get the best price on chicken. The other family is probably upper middle class, but more generous with their money than they probably should be. We're financially well off, willing and able to pay a fair price for a quality job or product,

Maybe what I am trying to say is it seems many of the ideas are posted here are good tips for saving small amounts, and although I agree that those small amounts can add up over time, I expect many people don't focus on things that can save a lot more money with less time/effort. For example, have your INDEPENDENT insurance agent re-price your homeowners & car insurance every few years. My savings - over $1000 this year. Also check your cable or or dish TV/phone plans every few years. My savings -over $1000 this year. I also have a 529 plan which I funnel all tuition payments through to get the extra 10K State tax deduction each year. These are just a few examples of things that can yield far more savings than many of the ideas posted here. Of course, if you have the time you should them all. But please don't overlook the ways that can really generate meaningful savings with very little time and effort. And don't criticize others who don't look for savings in the same way you do - it doesn't mean we're not as frugal as you are.


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RE: penny wise lb foolish?

How do you know that they don't research or compare bids? Do you really know all their financial details? It's their money to spend as they wish, as long as they're not asking you for loans to bail them out.


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RE: penny wise lb foolish?

My comments were about their spending not about the quality of work they get for their money.


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RE: penny wise lb foolish?

What is foolish is wasting your time analyzing how others spend their money....


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RE: penny wise lb foolish?

One these couples have been our best friends since our daughters were in kindergarten together - now in college. They are really great people, fun to socialize with. And I don't know the details of finances, but that's not really the point. I do know they run all over on Saturdays to get the best prices on food, because they often share which supermarkets have the best prices on grapes, or chicken, or whatever. And I do know them well enough to know they have made many major purchases without shopping around.

It never bothered me before - to each his own. That is until I became the butt of their jokes when they bought a new sliding door from the first guy who came to give them an estimate, and they laughed (along with the other couple) about how they don't research everything they way I do. As if I was being ridiculous. So that's when I got irritated - when they acted like I was one who was irrational. I guess I just needed to vent. And based on my experience with these two highly intelligent couples, I wondered how many other people are very focused on saving a dollar here and a dollar there, yet they totally ignore opportunities to save major $$$. I suspect many people fit in that mold, and I hope its not you!


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RE: penny wise lb foolish?

I agree, it would irritate me too! I'd just tell them you save your way and they save their way. If they still harass you about the weekly ads, I'd also ask them to track for a week how long it takes them to clip those coupons and compare ads, then how many stops they made and how much they saved so you can determine if that's a strategy that's worth it for your own needs. One of you might be surprised, not sure who though!

I used to go to more than one store, but not regularly. If something I used a lot was nonperishable and offered for a fantastic price I would go. But I decided long ago that for our two person home those rare savings were not worth the trouble. We no longer get the Sunday paper.


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RE: penny wise lb foolish?

No I don't fit into that mode, nor do I seek out the company of people that criticize me, because I don't do things the way they do.


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RE: penny wise lb foolish?

I shop at several stores in my area not because one is cheaper on a product than another but because different ones have different qualities and items in what they carry. Even within the same chain there are differences. All are within the area that I have activities so are not an extra trip. The place I purchase meat has poor fish and produce but the other in the same chain has just the opposite.

I would look at how frequently you have brought up the coupons to the other couples. For some they seem to take over their lives. Stand back from yourselves and look at how you come accross to others. Nothing wrong with saving money with coupons unless it takes over your life.


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RE: penny wise lb foolish?

My mom did calculations on saving money via shopping several stores, back in the 1970s. Fuel was a good deal cheaper then. According to her math at that time, visiting more than two stores to shop would use more money in fuel than would be saved on groceries. Of course, it depends how close the stores are to one another, how efficient your car is, et cetera. Amy Dacyczyn of Tightwad Gazette fame came to a similar conclusion though, and rotated through a series of stores each few weeks. She purchased from each store the items that vendor sold most economically, and IIRC found some items went on sale on a regular schedule. (So if store A sold boneless skinless chicken breasts every six weeks, she bought six weeks worth.)


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RE: penny wise lb foolish?

I have to say that for several of the big purchase 'fixups' for my little house I bought about a year and a half ago that had to be done by pros (I am doing a lot myself, but I leave some jobs to experienced folks like roofing and so on) the BEST money I spent was for a one year subscription to Angie's list.


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RE: penny wise lb foolish?

My MIL had plenty of faults but she had "some" good ideas. She said, when buying things for your home, buy the "best". It may be more expensive but will last longer. After she died, her house was so clean and in good shape it sold the first day on the market.


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RE: penny wise lb foolish?

jannie, there is that philosophy that "Poor can't afford to buy cheap."

I would council folks that if you're buying something you intend to keep a long time, buying the best you can afford is a good idea. If one is buying a table saw to put a small addition on the house, and one hopes to never use it again, you may not need the best.


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