Can you afford to be so frugal?
As you can tell from some of my previous posts, I’ve been on a contrarian personal finance kick. The advice most often given on personal finance websites, blogs, and the like are what conventional wisdom says. Often that’s the best advice, but the problem with it is that it’s too tailored for the “general” person, not you. As I talked about before, everyone’s telling you to save, save, save. Honestly, that’s good advice, but what if you don’t need to save so much? In terms of happiness, can you afford to save as much as you do? Today I’m asking you, can you afford to be so frugal?
A couple days ago FMF (of Free Money Finance fame) posted the article, “Why I Pay More to go to a Car Dealership For Service Work.” To make a long story short, he’s willing to pay more for the time saving and enjoyable amenities that his car dealership has to offer. We’re not talking chump change either - $20 bucks more for oil change service. The “catch” is that his dealership offers free food, drinks, wireless internet and private work cubicles.
Still, $20 is $20 right? How could a frugal personal finance blogger justify this? By spending the extra $20 bucks, he’s not only gaining the free food, but he’s regaining the productive time that would have been lost.
Have you ever made the effort to think about how much time (and money) you’ve wasted trying to be frugal? So often we talk about the time value of money in terms of saving, but we rarely think about money value of time in spending!
How much time do you waste searching for the cheapest gas? How much time do you waste deal surfing on the internet? How much time do you waste getting your oil changed at a place that leaves you sitting on a chair watching Jerry Springer on TV when you could be sitting in a cubicle with free food, drinks, while your surf the internet doing work? Well, that one was tailored to FMF’s situation, but you get the point!
I challenge you to look at your activities and determine the value of the time lost in that activity as opposed to other alternatives. You may find that you’ve made the best decision, but chances are you might find that you’ve chosen the expensive frugal option!
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March 13th, 2006 at 5:08 pm
Nice, finally someone articulated it better than I’ve been able to! This is a wonderful post!
March 13th, 2006 at 6:44 pm
Ah, but what if you enjoy comparing prices and such? You’re saving money and being entertained.
March 13th, 2006 at 9:19 pm
Well, as far as shopping for the cheapest gas, that’s why I don’t expect ppl to deviate too much from their set routes. To me, it’s mostly about knowing which of the gas stations already around you generally have the cheapest.
Time and Money aren’t equal, but they are certainly related!
March 14th, 2006 at 6:36 am
Great post. I agree. I know people who spend a lot of time seeking out the best deal, when all they’re really saving is an extra buck. Like those who shop at 3 different grocery stores, because at one place the green onions are on sale 3 for $1, whereas the others are charging 2 for $1. When it comes to smart spending, one really has to measure both time and money saved.
March 14th, 2006 at 9:58 am
I had a Major I worked for in the Army once tell me “when you are making decisions thing of a triangle with “cheap” “fast” and “easy” at each point. For every course of action you can get only two of the three. If it is Cheap and easy, then it isn’t fast etc”
I have found this to be so true. I guess you just have to decide what is worth more to you at that point. Right now as a SAHM I have more time than I have money, so doing things that take a lot of time are worthwhile financially to me (I’d sit around in the cheapo oil change facility-as long as I could keep the kiddos occupied) But when I was working full time my time was what was more valuable to me.
I like that you are pointing out that there is not only one way to be frugal. Each person has to find their own balance.
March 14th, 2006 at 8:07 pm
Hmmm… Guns or butter? Guns or butter? I choose butter. But it doesn’t matter if you choose guns, as long as you consciously choose. Too many sleep walk spend. That’s when it’s a real problem.
March 16th, 2006 at 1:56 am
[...] Can you afford to be so frugal? [...]
March 16th, 2006 at 10:53 pm
[...] Are all frugal practices worth it? (Kirby on Finance) [...]
March 17th, 2006 at 9:27 am
It’s a good point, but I just assumed everyone goes for this balance. I must really be out of it.
March 19th, 2006 at 9:15 am
There are other advantages to going to a dealership: I used to go to a shadetree mechanic I really liked who specializes in my make of car, but after $400 worth of his not being able to figure out what was wrong with it, I took it to a dealer. It turned out that not only was it a known issue with my car, but that the manufacturer’s warranty had been extended to cover the problem (the mass airflow sensor needed to be replaced). If I had taken it to the dealer in the first place, I would have saved the $400 I paid my mechanic.
A lot of this is old-style conventional wisdom meeting new-style cars. Back before everything was computerized, and before emissions standards were as rigorous as they are now, any competent mechanic could take care of most cars, and they charged a lot less for labor than the dealerships. Also, they were generally nicer to deal with, and if you found one you trusted, you had a pretty good thing going, because they would do things like look over a used car you were thinking of buying, or let you know if one of their other customers was selling a car you’d be interested in. But these days, there are so many make-specific issues and diagnostic codes that you almost *have* to take your car to a dealership for service.
For oil changes, though, I go to the place that will do an oil change, interior detailing, and car wash for about $30. I just take a book and ignore Jerry Springer and the inevitable Loud Guy on Cell Phone in the waiting area.
March 20th, 2006 at 1:59 pm
[...] Can You Affordto be so Frugal? [...]
March 20th, 2006 at 5:25 pm
[...] 5:25 pm Mr. Kirby from the Kirby on Finance blog gives a fresh insight to the value of being frugal. In his post, he articulates the fact that our time is just as valuable as saving a few extra bucks. The basic philosophy of too much of anything is a bad thing holds true in this case. A compulsive bargain hunter might spend too much time searching for savings that he or she may actually waste time. And as we all know, time is money in this fast-paced world. I encourage you to read his article and the rest of his blog! [...]
March 22nd, 2006 at 10:38 am
[...] Kirby on Finance thinks we may be overly discounting the future of our time [...]
March 27th, 2006 at 8:59 pm
Well, the problem with time=money question is what are most people going to be doing with the time if they aren’t bargin shopping?
If you’re self employed and could be billing someone $200 for your services, you’re a damn fool for wasting half an hour to save 4¢ a gallon to fill up your car. But if you’re just going to go home and watch Springer anyway, what difference does it make? Your time isn’t that valuable, and being stuck in the waiting room has cost you nothing.
March 29th, 2006 at 7:36 am
The wealthiest self-made person that I know would nod at your ideas, Kirby. Sometimes I go crazy as she’d rather buy something used and half broken because it’s cheaper. She prefers to save money rather than save time. Free food? Always. $20 more for the “free” food that’s probably unhealthy and old? Never.
April 1st, 2006 at 1:03 pm
How do you think the rich got that way? By spending frivolously? Not on your life. I had a millionaire relative who drove his Rolls to McD’s becaz he said he liked the coffee! And dressed rather like a rag picker - It’s the broke nouveau riche who are into conspicuous consumption. But on the other hand, my rich relative was so driven by his fear of poverty that he didn’t really enjoy his life, either & left his $ to his heirs - The best is always the mean between the 2 extremes. (They used to make fun of misers in the old days.)
April 6th, 2006 at 3:01 am
I never thought of it that way…but you’re right. And there’s another thing too…often times there’s a good bit more aggravation involved in going the frugal route. There’s a time element there too, as in more stress = shorter life span.
Ray
April 14th, 2006 at 12:26 am
[...] Can You Afford to be so Frugal? [...]
May 1st, 2006 at 1:29 am
There are some things that I gladly pay for due to the time they save me. Sure I could do them cheaper myself. but I7d rather spend the time doing something else. When you save money, you have these options.
May 3rd, 2006 at 8:36 am
You can be comfortable while still saving. You should not have to compromise all of your time. I save a lot of money on my grocery bill by using and it takes no extra time than writing a shopping list. That is how I save money.