A big thanks to Jenny Lang for sitting in the driver’s seat here today! She’s an author, mom, investor, content publisher, web and app developer, DIY addict, homeschooler, and owner of FrugalGuruGuide.com, where we show people how they can live richly and spend less. Find her on Google+.
All too often, I hear people dismissively say that they don’t really care to save more—they’d much rather make more, instead, and they’d rather concentrate their energy in that direction rather than in spending less at home.
They underestimate of the power of savings—often drastically. In fact, in a study done ten years ago, it took 15 minutes of comparison shopping to find a better flight between Los Angeles and Houston to saved, on average, $139.
That works out $556 in savings per hour.
Factor in taxes at that income level, and you’d have to be making $800 an hour or over a million and a half per year to be able earn at the same rate that you saved in that quarter of an hour.
Your ability to spend within an hour or even a minute is constrained only by your credit limit. Your ability to earn only increases with a great deal of time and work—time and work that can be worth it, but only when paired with smart spending, too.
Do people really believe that comparison shopping doesn’t really save them anything? I’d argue that they don’t. That’s their excuse—the story that they tell themselves—but having observed a number of spenders of that sort up close, I don’t think that it’s because they are mathematically challenged.
The truth is that they don’t want to think about how much they are spending or could be saving—or, at best, they want to think about it as little as possible.
Why would anyone do that?
Paying attention to how much you are spending triggers the part of the brain that is linked to disgust, which dulls the pleasure of buying new things. Many people don’t want to do anything that might dampen that burst of shopping pleasure. That’s half the reason they shop! They choose to wear mental blinders and tell themselves stories so they don’t have to think about the prices. It’s not really a strategic decision to make more money. It’s an emotional one to avoid discomfort.
Don’t let your automatic reactions trick you. You can figure out when it’s really worth your time. Just give your brain the chance!
It’s a whole lot of work to create a business that yields a million and a half in income per year. But anyone at all can save like a millionaire.
Holly Johnson
I totally agree!!!!! It doesn’t take that long to comparison shop and it can save a ton. I have about $440 in travel credit from the last credit card that I churned and I wanted to take my husband and kids to a waterpark/hotel. I found a place about three hours away for $279 a night. Since that was over my travel credit, I called the hotel direct and they said that they would give us a special rate of $149 per night if we booked right then. That’s a savings of $260 and it only took five minutes! Plus they upgraded us to a two bedroom suite with a kitchenette so we probably saved more.
Matt @ momanddadmoney
Great message here. There’s a lot of value in earning more, but if you can’t also learn how to save some of those earnings then the value is lost. It needs to be a joint effort.
Common Cents Wealth
I love comparison shopping. I compare the prices of products or services of pretty much anything I spend money on. Sometimes it’s probably a bad idea because the savings aren’t worth the time it takes me to find them. That being said, anything that costs over $100 is probably worth comparison shopping for.
Alexa Mason
I totally get the concept of not wanting to think about how much money you spend…that could lead to disgust and guilt for sure. I haven’t flown anywhere in years but on my last little vacation I did quite a bit of research to keep it as low cost as possible.
moneybulldog
I’ve saved a fortune in the past through comparison shopping, especially on insurance. For the small amount of time it takes I can’t think of a valid excuse not to do it!
Nick @ ayoungpro.com
I agree. Why not save money and make more money? 🙂
Mrs PoP @ PlantingOurPennies
I’m all for comparison shopping, but I think it’s a slippery slope to compare that to a job’s wage. After all, how much did you have to spend during those 15 minutes in order to “save” $139?
Short of MLM, what job is really going to require that level of spending, even during a start-up period?
I like frugality, but don’t view it as equivalent to earned income. It’s just money you didn’t light on fire and waste.
Done by Forty
I like the way you’ve framed the money saved: it’s repackaged to seem like a job that pays a ridiculously high salary. That’s a good way of putting it.
I work in procurement, and one of my favorite facts is that a dollar saved is worth a lot more than a dollar earned (due, as you noted, in part to the fact that revenues/income are taxed). And depending on where your savings come from, they can be recurring and can keep “earning” you money indefinitely.
Edward - Entry Level Dilemma
While I agree that you are just throwing money away if you ignore frugality and comparison shopping, I’ve never liked the argument comparing it to earning extra money. To turn $140 savings into $800/hour, you have to do that 4 times in one hour. You may have saved yourself $800, but it required spending a couple grand that you actually did earn.
Looked at another way, treating savings as income can lead to rediculous statements like, I didn’t buy a car today, so that means I earned an extra $20,000!
Budget & the Beach
I think since I’ve been a much better saver in the last year it’s given me a huge amount of satisfaction and pride. I think it’s one of those things that’s really hard at first because you obviously do not get immediate results, and people want that instant gratification. But if people only realized that if you plow through it, there is a much greater payoff with saving (although I’m also on board the make more money train as well)
Pauline @ MakeMoneyYourWay
I often hear that from people going on vacations, they just don’t want to bother with arrangements and pay for a package when booking separately would make the holiday half as cheap, meaning they could go twice on holiday for the same price. Negotiating your bills also offers a great return per hour. I’d rather make more in general but there is no reason to pay more than needed on what you want either.