I have been perusing personal finance websites lately, and came across a fascinating post on Wisebread about making your own mustard. Blogger Marla Walters tried it after experiencing sticker shock when confronted with a recipe that called for whole-grain mustard, retailing at $5.50 for a 6-oz jar. The process took three attempts before she made a batch that didn’t leave her gagging, right there suggesting that this was, perhaps, not entirely economical. And indeed, she writes that she has three criteria for making a product yourself:
- Is the product I make better?
- Is it cheaper?
- How much time did it take?
These are good questions. She writes that making her own mustard didn’t cut the mustard, so to speak. But unfortunately, a lot of the money-saving tips out there don’t take these questions into account. I’ve written in the past of the whole afternoon I once spent making my own soup stock. It wasn’t better (that I can tell, I’m not a connoisseur). It was cheaper, but by about $4, so I didn’t come out ahead when you consider the opportunity cost of time. If you enjoy DIY projects, this is one thing, but as a frugality measure, the issue in our modern, currency-based economy is that it really works better for people and organizations to specialize. I write, and food manufacturing companies make soup stock and whole-grain mustard. This is why most of us don’t milk our own cows. Isn’t it great that farmers and dairy companies and distributors and grocery stores can all do what they do best and still get us a gallon for less than $5?
I am collecting stories of things we do or have done to save money. I always like Depression-era ones for their sheer over-the-top nature: making kids’ clothes out of feed sacks, collecting those little slivers of left-over soap and mashing them together, starching laundry with the water you used for boiling potatoes, and so forth.
When people were completely out of the cash economy, this may have made sense. But these days we are left with the vestiges of that, which is that frugality on little things is seen as the ultimate in housewifely virtue. This is true to the point where in Thomas Stanley and William Danko’s Millionaire Next Door, they print an “Ode to His Frugal Wife” in which a man gives his wife $8 million in stock in a company he took public. She thanked him, “never changing her position at the kitchen table, where she continued to cut out twenty-five and fifty-cents off food coupons from the week’s supply of newspapers.”
Um, OK. An $8 million portfolio goes up and down $8000 in the time it takes to flip through the newspaper to find $8 worth of coupons. We are supposed to view this story as an example of wise decision making?
Most of us aren’t dealing with these kinds of issues, and I understand why personal finance books and websites like to tout coupon-clipping, making one’s own mustard, or that perennial favorite, shopping around for a better deal on car insurance. These are variable costs, even if they are not huge percentages of a family budget (at least I hope mustard isn’t!), and we believe two things to be true:
- Most people cannot change their income
- The big costs (house mostly, car to a degree) are set.
One of the things I want to ask in this new book is whether these two statements are as true as we think they are. Certainly it’s hard to move right now. But from the interviews I’ve done so far, I think number 1 is definitely changing, and if you go into house hunting mode with the mindset of spending a lot less than you “could” afford by the various calculators, you can buy as much whole-grain mustard as you want.
14 thoughts on “Silly things we do to save money (by spending time)”
I try to get things with our rewards points. Amex’s are very easy to use but I’ve spent hours on the phone with Visa Extras getting all our cards linked and making sure we get our points. Now I did just get a date night worth about $60 paid for so OK, this might be worth an hour of my time maybe. But it probably has taken more than an hour at times with fruitless results and also usually it would be better to just make more money.
I am reading the book The Millionaire Next Door – actually book on tape — new mom trick, I only read (ok listen) while driving — and that book spends two chapters stressing frugality, which I’ll admit is not much fun but makes some good points. Still sometimes we drive ourselves crazy. I’ve also spent hours arguing with the bank over a $35 overdraft fee when I can write this off as a business owner and while it could be avoided, it can be seen as a necessary cost of doing business… for which we can write off the expense. Not the end of the world and maybe not worth the stress of the haggle. Aside from time and money there is the STRESS Test. I think as a working mom sometimes it is not worth it for that stress.
@Cara – yes, it does have some good points, like cars being a depreciating asset, meaning that a fancy car often indicates that someone is not very good at building up a bank account. I also really liked the morality tale of Dr. South and Dr. North — two surgeons earning $700k a year, one of whom is worth $400k, and the other is worth $7.5 million. But the coupon story just bothered me!
Unfortunately, my husband and I have frequent versions of this argument. He grew up in Germany and while his family was middle class, his father (a teen when his family farm was invaded and destroyed) lost everything in World War II. And so he grew up with a similar mentality to what we would call “depression era” in the US.
The one that he still does is visit 3 or 4 different grocery stores on any given weekend (every weekend) in order to buy products that we regularly eat/use on sale. He reads all the sale circulars for Shaw’s, Stop and Shop, and Market Basket, before going. (He seems to have the Trader Joe’s prices memorized). Then he buys a large amount of these products on sale, regardless of whether there is an immediate household need for them. So, if Market Basket has a sale on toilet paper one weekend, we will be looking for places to store the extra rolls because he will buy more than fits in the closet.
I have tried to point out that his time spent, and the gasoline spent driving to more than one grocery store, is probably worth more than the money he saves. But I have never really calculated this out because I find the exercise painful. Besides, he has an unanswerable counter-argument: that although I’d rather have a root canal than spend any more of my weekend in a grocery store than absolutely necessary, to him, grocery store comparison shopping is FUN.
There’s also saving and reusing ziploc bags, which I can’t blame totally on him because I do it also. But I do that for the reasons we talked about on the earlier blog: to prevent taking them for granted, and for environmental reasons, more than for saving money. I also don’t think it uses any more time to save ziploc bags than to use fresh ones, because I don’t wash them out. I might dump out crumbs, but if they get too grungy or whatever, I’ll just toss them and start fresh.
And, in that same vein, we save and re-use gift wrap. But that too has more to do with other psychological reasons than with saving money. I can really get going on the idea that gift wrap is emblematic of waste, excess, and consumerism run amok in this country. Not to mention an unhealthy focus on outward surface appearances. That feeling gets especially strong for me around Christmas time, with all the gifts to be wrapped and unwrapped.
So if I re-use gift wrap and don’t spend any money on it, I feel like I’m sticking it to “the man.” If I think about it, I know it’s a little silly, but it seems harmless enough and it’s kind of fun, maybe the way grocery shopping is for my husband, to challenge myself to wrap a decent-looking gift without having to buy any new paper. And, I noticed when my kids were babies that it was also fun to wrap baby gifts for other people in the same paper that my kids’ baby gifts had come in. It was like a little connection between our families.
@Karen – gift wrap is a subject I hadn’t even considered yet. I sometimes try to buy a few rolls in the after-Christmas sale bin and then keep them for the next year, but then this is sometimes not seasonally appropriate for birthdays (try to find plain red or something). And I have to store it. But boy, I would find it hard to give up gift wrap. I love it. Actually, I love fancy looking presents in general. Since I’ve started trying to buy as many presents as possible online, I wind up having to pay a lot more for getting them gift wrapped (though, then again, I need to figure out the opportunity cost of time…)
Check out The Tightwad Gazette for silly stories galore! In general I found the author’s recommendations helpful during the time when my husband was a grad student and I wanted to be mostly at home with our first baby. But oh my, some of the readers’ suggestions are eyebrow-raising and perhaps hair-raising. The one that still gives me the shudders was the suggestion that you should cut your styrofoam meat trays into blocks for your children to play with. Because a stay in the hospital after you’ve given your child E. coli or salmonella poisoning is so much more economical than a bucket of garage sale blocks!
The wackiest thing I ever did personally was make my own laundry soap, probably using a recipe from Tightwad Gazette. I like to knead my own bread and knit my own sweaters and I much prefer to make my own stock, but the time I spent grating fels naphtha soap falls into the Wasted Hours Of My Life column of the spreadsheet in the sky.
@Jamie – I would hate to see the ledger of that Wasted Hours of My Life spreadsheet in the sky. Definitely the time I spend cleaning up in front of the baby would fall in those categories. He sees me with whatever I’m putting away, and immediately wants it, which guarantees it will be out and back on the floor pronto. Have had this experience with both books and blocks in the past 2 days. I will check out the Tightwad Gazette. Yep, the styrofoam meat trays sounds like penny wise, pound foolish. I somehow doubt blocks are a big part of most people’s budgets anyway…
Years ago I read a Money.com post called the 60 percent solution that argues that if you take care of the big things, you don’t have to worry about the little things:
Elizabeth Warren also makes a similar point in her books.
@Elizabeth: That’s an interesting take, and I agree with much of what he’s saying. If your house payment is low as a percentage of your income, you’ll be able to save even with your lattes or what have you. I’ve never had an official “budget” because I’ve never had a steady income month to month. Ever. I had one regular job after college at USA Today, but even then, I was freelancing on the side so my take-home pay varied quite wildly. I usually lived within the base and banked the rest, but then I went 100% freelance, and had to deal with that variation. Since I’m naturally cheap, though, the variation always meant I was saving more or less. I’ve never had debt.
I love your ideas regarding opportunity cost, as well as the psychological aspect of this. I grew up in a financially strapped household and had to make decisions early on regarding cost/time.
I remember being told– I can save babysitting money for a pair of designer jeans for the new school year, or wait until Christmas.( I waited and got 2 pairs.)
I am still a work-in-progress in this area. I will use the criteria of “Is it… better? easier? more cost effective?” as I continue to change my mindset. I recently threw out an untried recipe for ‘crock-pot yogurt’. Yes, it’s easy to make, but there are plenty of companies that do it better.
On the psychological side, I can’t eat a cookie from a store, or a bakery. My 6-day-a-week working single Mom always made homemade cookies so there’s no reason I can’t–plus they taste better, are healthier and it’s quality time with my kids. A winner in 2 of the 3 criteria, but also in line with my core competencies, something else I’ve learned to keep in mind when weighing opportunity cost.
I’ve also found that as a reforming control freak, this strongly influences time/cost decisions. Mentally, it takes a lot for me to let someone else handle the job. My husband often has to convince me that it’s OK to let go of the need to do it all myself. Then I concentrate my time on making a themed cake, which I really enjoy!
Your blogs and other’s comments give me much food for thought, as well as great ideas.
@Denise: thanks for your comment, and I’m glad you’re finding the content here helpful! I think I will start using the better/easier/cost-effective criteria too. At the moment, with two little kids and a bit much on my plate professionally, almost nothing gets through that algorithm. Someday I think it would be nice to bake/cook with them or do crafts. Hopefully I have crafty boys 🙂
It seems like you’re trying to focus the conversation on house prices/payments for a while, which makes sense since it’s such a big part of most people’s expenses.
My husband and I did something in regard to our house that lots of people advised us against, but I’m still glad we did. We paid our mortgage off early. It was a 15-year mortgage and we paid it off in about 5 years. Everyone kept talking about how we shouldn’t do it because of the mortgage interest tax deduction, but my husband calculated it out, and it wasn’t worth it in our case. So we used money that people told us we should be putting into the stock market or mutual funds to pay off the mortgage principal instead. As a result, although we took a bath like everyone else in our 401Ks and kids’ 529s when the stock market went down, we didn’t lose that much otherwise, our house is worth about what we paid for it, and now we have no housing payments at all.
Sometimes it seems like people go to great lengths to get a tax deduction, when other courses of action might actually turn out better in terms of money in the pocket.
@Karen – certainly, I think that anything that kept cash out of the stock market between, say, 1999 and 2009 (in March) would be, in retrospect, very wise. Paying off the mortgage would be one thing. So would burying gold coins in the backyard 🙂
I’m looking at the issue of housing right now because we almost universally consider it “good debt” and yet in many cases, with the collapse of the housing bubble, people have seen a lot of equity destroyed. Somehow, people forgot that housing prices don’t always rise. Also, the sluggish housing market has rendered many Americans immobile. There are jobs some places, but people can’t move to them, because they can’t sell their houses. That’s one of the reasons that the usual ratio between job openings and unemployment is out of whack right now. People have promoted home ownership because it creates stable communities… but sometimes stability is not great (for instance, if everyone’s stable but there aren’t any jobs!)
I spend a lot brain energy trying to be thrifty, and in the past a lot of time. This is not necessarily always for the frugality of it all — I truly enjoy the challenge.
There are a few things that I have learned about thriftiness in the last two or so years of pursuing it. The biggest is that it is something that takes some learning — and that learning takes some time. But once you get the hang of it and make the initial investment, it really is worth it. Part of that learning curve is figuring out what is and is not worth doing yourself, shopping around for, etc. It might take a minute, but eventually you figure out that, as you say, making your own stock is NOT cheaper but if you cook with a lot of beans (like we do), soaking and freezing your own beans is (it takes a 10 minute investment for a several dollar savings once a week, which adds up in the long run).
You must also know your own shopping habits. Do you have a good handle on what stores sell what cheaply, those that have good sales and only buy things that are on sale? Or do you have brand loyalty and only like that one particular store (or only have one store near you)? If it’s the former than looking through the ads and spending 20 minutes shuffling through coupons once a week (total time spent: half hour. … longer during my initial learning investment) is going to save you potentially several hundred a month. I cut by grocery bill from $100 a week to $40ish this way. If you have fewer stores or brands to choose from, or those for whom your cooking refuse to diversify what they eat, then no, those coupons are not worth it.
Basic concept: know thyself. … and spend your time accordingly.
What I have determined to NOT be worth it:
— spending lots of time looking for “steals” and “freebies” on mommy deal blogs. My time is too valuable to spend half an hour each day scrolling through Walgreens deals. Instead I keep my blog roll and scroll through post titles every few days to see if there is something that catches my eye (example: I like those custom photo cards … if you pay attention you can find them for FREE… a savings of $50 or more. Last year I ordered over 200 for our christmas cards and didnt pay a dime).
— Shopping around for the little things. I have a general idea of which stores tend to be cheaper than others and I know from my 10 minutes cruise through the weekly sales ads that Walmart has detergent on sale this week. But I don’t know exactly how much cheaper windex is at Walmart compared to Target and I am not going to spend the time to find out. I’m just going to buy the Windex.
@Amy – agree that the challenge/game is a big part of why people do it. And that there’s a learning curve. But all the things you say about the learning curve could be applied to something that would make money, too, not just save it. Books like The Millionaire Next Door make a big deal about playing “defense” because they take for granted that you can’t expand your income. But I’m probing this idea of playing “offense.” Posting early this week about this in the realm of time, but it’s something to consider with money, too. Particularly given that the 12% returns on investment most of these books talk about has just not happened in a decade.