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Old 04-28-2009, 12:13 PM
RHB RHB started this thread
 
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Quote:
Originally Posted by sonarrat View Post
Also the much older "penny wise, pound foolish." Sometimes it's better to chase the pennies, but those cases are few and far between. It's much better to know the value of the pound.
I guess that's what I'm missing, and why when I read that phrase, I feel like it's a scolding.

As an example...if I save $5 a month (pennies) by making my own laundry soap, I see that as a good thing. The it takes me very little time (about 20 min every 6 weeks) to make the soap, and I wouldn't be making any more money (dollars) doing anything else. I see alot of these type savings (pennies) and the cases aren't far and few between.

I do agree with the driving 20 min to save $.10 on a gallon of milk is probally not the most cost effective thing to be doing. As are the other examples given. But it goes back to thinking through your purchases.

So...
When I read the phrase "walking over dollars to get to pennies" I should be reading...are you thinking through your purchases? Is there a better way to be spending your time and resources than doing X that might be more cost effective?

Am I getting a handle on this?
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Old 04-28-2009, 01:33 PM
 
Location: San Jose, CA
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Quote:
Originally Posted by RHB View Post
I guess that's what I'm missing, and why when I read that phrase, I feel like it's a scolding.

As an example...if I save $5 a month (pennies) by making my own laundry soap, I see that as a good thing. The it takes me very little time (about 20 min every 6 weeks) to make the soap, and I wouldn't be making any more money (dollars) doing anything else. I see alot of these type savings (pennies) and the cases aren't far and few between.
Assuming that the $5 is the difference in materials cost, and the cost to acquire the materials to make your own soap is negligible, you're basically making $15 an hour in your own time making your own soap. That would be worth it for most people. Now, if the materials cost you $5 more compared to the ready-made laundry soap, then you'd be walking over dollars to save pennies.

Quote:
I do agree with the driving 20 min to save $.10 on a gallon of milk is probally not the most cost effective thing to be doing. As are the other examples given. But it goes back to thinking through your purchases.

So...
When I read the phrase "walking over dollars to get to pennies" I should be reading...are you thinking through your purchases? Is there a better way to be spending your time and resources than doing X that might be more cost effective?

Am I getting a handle on this?
Most products have a cost to use as well as a cost to acquire. A car is a good example; once you've bought it, you still have a variety of costs associated with keeping it and driving it. With hybrids becoming increasingly prevalent in the market, you have an option that saves on the fuel bill, but comes at a considerable premium at the sticker over a traditional gas car. So you're paying more to acquire in the hopes that it will cost less to use. That rarely works.

There are plenty of other examples. Once I scheduled a payment against a brokerage account which didn't have funds in it. I raced up to San Francisco, brought cash into their branch, and then was told that the only way to make funds post that day was to do a bank wire. I balked at the cost of doing so and didn't do it. I left the cash with them and hoped that it would come out in the wash. Then I got hit with a $34 returned payment fee by my CC company and had to make a desperate phone call to get my defaulted interest rate returned to normal. You bet I was wishing I had paid for the wire. It would have saved me the trip, the NSF fee, and the phone call.
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Old 04-28-2009, 07:30 PM
 
Location: Portland, Oregon
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I always like to add it's ignoring the cost benefit ratio of projects when you start.

I have family who spend hours to save a couple bucks on groceries or drive hours to get a couple bucks off an appliance...it doesn't matter how much they pay or what the product is, just how much they saved off what they expected to pay.
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Old 04-29-2009, 12:15 AM
RHB RHB started this thread
 
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Quote:
Originally Posted by sonarrat View Post
Assuming that the $5 is the difference in materials cost, and the cost to acquire the materials to make your own soap is negligible, you're basically making $15 an hour in your own time making your own soap. That would be worth it for most people. Now, if the materials cost you $5 more compared to the ready-made laundry soap, then you'd be walking over dollars to save pennies.
To say I'm "saving" x dollars, doesn't that imply that I've done the math? I assume that when someone posts they "saved" that they figured what the cost of purchasing minus the cost of making to come up with that figure. I factor in my time, because I work outside the home, and how I invest my time is important to me. When I was a stay at home mom, I had more time available, so that wasn't as much of a factor.

I'm not trying to be arguementitive, and I 'm not upset/mad or anything, I just wanted to get a handle on the phrase. I understand what you all are saying now...Thank you
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Old 04-29-2009, 06:28 AM
 
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I say "stepping over the dimes to pick up nickels" all the time.

When I'm saying it, I'm generally calling the person I'm talking about foolish. For instance, a friend who drives across town (15 miles+) to buy bags of flour at 69 cents apiece rather than 1 mile away at $1.25. She bought 4 bags - one broke in the SUV while coming home and one of her kids dropped one on the way into the house (it was bring your own bags, she didn't have any, so loaded everything loose into her SUV. Between the gas and the broken bags, she spent more than if she had just bought 1 bag. The following week she got news that she'd been waiting for... her dh's new orders were coming in and they were moving to HI. She gave me a bag and a half of flour when she left, among other things.

She claims they're always broke... well DUH! Her dh makes more than mine, and she gets child support for her oldest two kids as well... I know she always gets the checks each week- she's always at my house to cash them (our bank allows us to scan them in/deposit at home).

I have several family members who buy stuff just cause it's on sale but then can't find what they need in their "stash" and have to go out and rebuy it all at full price when they need it. It's how I was raised. It took me YEARS to get over it... and they call ME wasteful! My aunt bought fabric and craft supplies for over 30 years, squirreling it away for when she would have time. Well, when she and my uncle divorced, she didn't have room for most of it. While sorting it, she found that much of it rotted and most of what she had left was seriously "out of date". On top of all that, she has fibromyalgia (sp?) and can't do the sewing and crafts for more than 20 minutes at a time before having to rest her arms and eyes. And she needs a couple days to recover when she does push herself to do any of it... LOTS of wasted money there... but ALL of it bought on "sale" or "clearance"... not to mention the costs of the storage containers, the loss of the room she used to store it all in for those 30 years indoors before she outgrew the room and had to buy the huge storage shed for the backyard and the YEARS of fighting with her husband over it all. Just foolish!

I have MANY more of these types of stories too... my dh is always telling me I need to write a book or two about all the people that I've come across in my life!

People are always telling me how "lucky" I am to have what I do. I've told them - it's not luck, it's the Grace of God and smart living. I do not claim to always be smart with our money, but I prioritize and NEVER "step over dimes to pick up nickels".
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Old 04-29-2009, 10:17 AM
RHB RHB started this thread
 
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Thanks sskkc for your honesty - I'm calling them foolish - I kind of got that impression from the way it was being used.

I think if I were to ever use the phrase, I'd pose it as a question. As people learn and try things, there are going to be "mistakes" and we learn from them - I'll grant you, that some peoples learning curve is greater than others - but it's still learning, and a helping hand in the process isn't a bad thing...getting people to think it they "counted all of the costs"
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Old 04-29-2009, 12:30 PM
 
Location: Right where I want to be.
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Quote:
Originally Posted by RHB View Post
To say I'm "saving" x dollars, doesn't that imply that I've done the math? I assume that when someone posts they "saved" that they figured what the cost of purchasing minus the cost of making to come up with that figure. I factor in my time, because I work outside the home, and how I invest my time is important to me. When I was a stay at home mom, I had more time available, so that wasn't as much of a factor.

I'm not trying to be arguementitive, and I 'm not upset/mad or anything, I just wanted to get a handle on the phrase. I understand what you all are saying now...Thank you
I think it's fair to factor in your time only IF it has actual value.
For example, my dad can take time off of work to do some of his own home maintenance but missing 3 days of work will cost him $X so he has to factor in what his time is worth. It may actually be better for him to go to work and hire a handy man. IF he plans to spread the work out over several weekends (when he wouldn't otherwise be getting pay) then his time isn't worth any actual dollars. His labor is free now and he doesn't factor in his time to the cost of the project.

Similarly, you wouldn't add your hourly wage at work to the cost of making laundry soap at home (or mowing your lawn, or painting a room, etc). Unless you would otherwise be paid for your time it is free and the cost is $0.00.



Of course I also understand that time is valuable not only in a monetary sense but that's not what I'm referring to here.
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Old 04-29-2009, 03:01 PM
 
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Quote:
Originally Posted by RHB View Post
Okay that makes sense.

It's like when I was thinking of replacing my freezer. The payback on an energy saving model would be approx 5 years. I kept the one I have, because it still works, and I wouldn't realize the savings until 5 years down the road.

So the phrase is used in reference to "big ticket" items.
Your initial investment will not be paid back for five years BUT you are realizing real energy savings throughout the five year period.

personally, I like the paypack period closer to three years.
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Old 05-04-2009, 09:28 PM
 
Location: Conejo Valley, CA
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I often use a similar phrase, "Penny wise, pound foolish". I see a lot of people that try to save pennies, but some rather big things. The "big things" I often see people make mistakes on are more financial related, that is things like investments. Also, big ticket items like automobiles, remodeling, etc.

One screw up on a big ticket item will wipe out many years of being penny wise.
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Old 05-04-2009, 11:51 PM
 
Location: Kailua Kona, HI
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Reminds me of prospective tenants that I have encountered. Showing a very inexpensive studio, at about $800/mo rent, they were seriously doing the math in their heads, I could tell. Asked about possibly less rent? yadda yadda. We left. I saw them get into their vehicle. A $35,000 pickup truck that had to be only a year or 2 old. Imagine their payment? AACK!! No wonder you can't even afford an $800/mo studio for yourselves and your tiny little baby! Ah, but daddy has that big truck he wanted, huh? <sigh>
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