How Costly Are Your Savings?

In the quest to save that penny do you sometimes end up spending more time, effort and maybe even money? I know that I do. I had a $10 gift card from Lowe’s which was about to expire. To use that $10 card I made a trip to the hardware store. Since I did not have anything specific to buy – I ended up exploring the aisles for a few hours. I eventually picked up some flower bed fencing which cost $15. When I reached home and tried out the fence – it did not fit the flower bed. I rolled up the fence and tucked it in the garage hoping to use it for some other project.

So at the end of this venture which should have saved me $10, what I ended up with was
- A garden product which cost me $5 (after the $10 saving)
- Lost two hours of prime weekend time
- Gas expense for the trip to Lowe’s
- More stuff in the garage (which I will have to spend time cleaning out someday)

Time and effort both have value. They can translate into financial value also. Two hours spent researching a stock or investing in a side business may reap more rewards than chasing a $10 saving at Lowe’s. Sometimes hiring professionals not only saves you time but also ensures a quality product. To understand the true cost (or savings) of a home improvement project you should consider time investment, tool costs, experience requirements, quality considerations and project complexity. When planning to visit 3 stores to do groceries (to get the best deals) consider your time investment.

The point is that smart savings make a difference. And smart saving requires considering the cost of the saving before pursuing the elusive penny.