Common Sense applied to saving cents

“Waste neither time nor money, but make the best use of both. Without industry and frugality, nothing will do, and with them everything.” - Benjamin Franklin

I saw two articles today that described situations where a person loses money while trying to be thrifty and save.

In the blog post, Jeep Incapable Of Selling To Man With $24,000 In Cash, a car salesman tries to convince a buyer with loads of cash to finance the car instead to get $1,500 back. Trouble is the loan will cost $31,732, an extra $7,132 over the cash price. Would you spend $7,132 to save $1,500? No Deal!

In another blog post, Shopping For Low Gas Prices Is A Losing Proposition, the author, Len Penzo, points out that driving to the next town to buy cheaper gas will actually cost you money. Here are the numbers. You drive 5 miles out of town to save 4 cents per gallon. You buy 12 gallons of gas, so you save .04 * 12 = 48 cents.
BUT you drove a total of 10 wasted miles to get the gas. At $4 a gallon and a car with 20 mpg this means 10/20 * 4 = $2.00 for the cost of the trip.
So if this case study describes you, you just spent $2 to save 48 cents.

Even at $2.00 a gallon, the cost of the trip is $1; still more than you save. My recommendation: buy cheap but only along routes you normally travel. Don't make a special side trip just for gas.

Bottom Line

You have to use common sense and consider the total cost when trying to save money. You might get a great deal on something at 75%-off but the money is wasted if you don’t use what you bought.