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You Are Here: Home » Saving » When You Save Are You Really Saving?

When You Save Are You Really Saving?

Published or updated August 13, 2011 by Glen Craig

You always hear from people how they saved money on this or that. That’s great and all but sometimes I wonder – Did you really save?  I mean, what did you save?  Did you put money into your savings?  Did your wealth grow?

Usually when someone saves what they really mean is they paid less than normal. “I bought a TV that costs $500 but I saved $150 because my uncle knows a guy and I bought it over the holiday weekend,” or some story like that.  But they still bought something and paid for it.  They just didn’t pay as much.

If you really want to say you saved, put the difference between the original price and the “saved” price into your savings account.  It’s easy to do.  Transfer the difference into an online savings account.  This way when you say you saved on a purchase you really are saving.

Imagine we did this every time we paid less for what we bought. If you are a smart shopper you do your research, look for your sales, and use coupons when you can.  Your savings account would grow pretty nicely over time, wouldn’t it?

Now what if the next time you feel like buying that new gadget (or whatever), you put the money it would cost into your savings instead? Maybe that new $1000 camera you want doesn’t get bought but the $1000 is now in savings?  Now you’re really saving!! You can tell your friends you saved $1000 on new camera by not buying one at all. [Of course we could use anything besides a camera here.]

I’m just thinking out loud here. We are always looking for ways to save but really we are looking for ways to pay less.  Maybe we should really be looking for ways to save more as well?

What do you think?

Filed Under: Saving Tagged With: idea for savings, Online Savings, savings

About Glen Craig

Glen Craig is married and the father to four children that he spends the day chasing as a stay-at-home-dad. He took an interest in personal finance when he realized most of his paycheck was going toward credit card bills. Since then he's eliminated his credit card debt and started on a journey towards financial freedom.

Reader Interactions

Comments

  1. Steve says

    June 10, 2010 at 7:39 am

    One of my favorite grumbles is “oh, yeah, if you don’t buy it you’ll be LOSING money.” The wife always loves that one, especially when I deliver it with a sarcastic tone…

    But yes, unless it’s a necessity – say, buying huge bulk toilet paper pallettes or something – any non-essential purchase is almost by definition the opposite of saving. It’s figuring out what’s needed that’s key – if you NEED it then you truly do “save” when you get a deal.

    • ffb says

      June 10, 2010 at 9:00 am

      I love shopping at discount stores like Nordstroms Off The Rack. I’ll go and see a great item on a SICK sale and tell myself HAVE to buy it! After all, if I don’t buy it now and I want it later it will cost me more so I’ll be saving. But in reality I don’t need it so it will just be more clutter in the house and another expense.

      Examples: Saw a great backpack for $60; high-quality running shoes for half price; North Face Gore-Tex rain coat more than half-off – all stuff that would be cool to have but none of it needed.

      Thankfully I didn’t buy those things but there are plenty of other things I have bought.

  2. Jeff @ sustainablelifeblog says

    June 10, 2010 at 8:48 am

    I think you’ve got a good point here. Often when Im wandering around at a store or something I hear “Oh, I need this because it’s on SALE”. Well, is it really on sale if you just want to buy it because it’s on sale, and not because you actually need it? In that case, it costs more than you think.
    I think putting your saved money is a good thing, but to a point. Many banks are now offering “savings” programs like that. They will add a dollar every time you buy something to your savings account, but are you really saving, or are they just encouraging consumption? Getting people who may marginally want an item thinking “oh, i’ll buy this because i’ll be putting some money into savings, and savings is good” they are actually worse off, because they have something they dont really want and an extra dollar in their savings, but they could have just taken the $9 they spent, added the extra dollar they “saved” and put $10 in their savings account, for a real savings rate 10x higher than what they thought. I may write a post on this….hmmmm….
    Either way, you’ve brought up some valid points.

    • ffb says

      June 10, 2010 at 9:09 am

      Exactly, so many times I’ve wanted to buy something because of a great sale rather than if I needed it.

      Yeah, those ‘put the change in savings when you buy’ programs really are more gimmicks for the banks (it is nice to have the couple of bucks extra every month). What I was suggesting was not buying the item at all and putting the cost into the bank. This way you save and make no purchase.

  3. Joe Plemon says

    June 10, 2010 at 9:48 am

    I like the concept of this post, and I will admit that I never considered literally “saving” the money I save when I buy something at a discount. But I look at it this way: I save up for whatever I am going to buy and then look for a bargain. If I save $200 for a power tool, for example, and I find it for $150, then I only draw $150 from my account, which means the other $50 is still there. So I still have my savings.

    But, like you said, if I don’t buy it at all, then I have saved the full amount. Hmmmm. But I WANT that new drill! (lower lip protruded). Maybe the real issue is distinguishing between wants and needs.

    • ffb says

      June 12, 2010 at 8:32 am

      Wants and needs are an important aspect for sure! I think what you do, saving up before the purchase, is great but not what most people do these days (though I hope I’m wrong about that).

  4. Kate Kashman says

    June 10, 2010 at 9:56 am

    Mindreader! I have been working on a very similar post and was hoping to have it published today. Ugh!

    Clearly, I think you are very perceptive and this is dead on right. I think that this idea has the potential to help me evolve my thoughts on saving and spending and will result in fewer purchases and less stuff in my house. Sure, the things I truly need to buy might cost a bit more, but my overall spending should still be down. At least I think it will work out that way.

    • ffb says

      June 12, 2010 at 8:34 am

      Haha, happens to me all the time with other sites. I think I have a great article and three other sites publish the same idea. Love to see your aspect on it (and feel free to link back!).

  5. Khaleef @ KNS Financial says

    June 10, 2010 at 12:40 pm

    My wife and I follow this. If we are tempted to buy something but then change our minds, we pay extra toward our debt, or put the cost of the item into our online savings account or. When we save up for something – like our Christmas spending – and come in under budget, we try (but not always) to do the same.

    • ffb says

      June 12, 2010 at 8:37 am

      Glad to hear others are implementing this already!

  6. Eric says

    June 10, 2010 at 5:09 pm

    I can’t tell you how many times I have tried to explain this to my Mom. She just doesn’t seem to get it. When she buys something on sale, she feels like she got such a bargain when in fact, she just got junk that no one else wanted.

    • ffb says

      June 12, 2010 at 8:39 am

      Same here! What is it with the strong feeling that you got a great bargain? It’s like a victory in the mind. I get it too when I find a great sale but I have to remind myself that it needs to be something I actually need.

  7. Rainy-Day Saver says

    June 10, 2010 at 5:30 pm

    I’m with the ‘you save more if you don’t buy it’ folks. Although if you do think through a purchase or put money aside to fund something you want/need — and then find it on sale — physically ‘saving’ the difference is a good tactic to ‘visualize’ the savings.

    • ffb says

      June 12, 2010 at 8:42 am

      Not buying is obviously the most effective way to save. I like the way you say “visualize” the savings. I think it’s great to keep your savings in mind and realize how purchases affect your overall savings.

  8. RetirementInvestingToday says

    June 10, 2010 at 5:43 pm

    I’m all for the don’t buy the item in the first place suggestion. IMO the UK is about to go through a few years of austerity with the big government cuts that are coming. During this time some people hopefully will see what is and isn’t treally required to have a satisfying life. In my opinion that doesn’t include $650 TV’s or $1,000 cameras.

    • ffb says

      June 12, 2010 at 8:43 am

      We’re going through that here in the US. Our savings rate has finally turned positive after being negative for so many years.

  9. Mike - Saving Money Today says

    June 11, 2010 at 10:07 am

    I think if you get a good deal on something that you were gonna buy anyway you could call it saving. But if it’s something you bought only because it was on sale you’re just fooling yourself.

    Costco is dangerous for just that reason. It’s easy to see something at a great price and think,”Wow! I’d be crazy not to buy this!” But do you really NEED it. Probably not.

    • ffb says

      June 12, 2010 at 8:49 am

      Yes! For me it’s BJ’s. That place can be dangerous if you don’t go in with a plan.

  10. Money Reasons says

    June 11, 2010 at 1:34 pm

    Wow, what a great display of how the commercial media can brainwash the masses (us) without us even know it!

    I’ve never thought about it before, but what you called out doesn’t make sense unless we were brainwash by commercials into believe it. After all how can spending really be saving!

    Talk about 2 polar concepts!!!

    Very clever post!

    • ffb says

      June 12, 2010 at 8:51 am

      Thank you for the kind words. I guess it is clever advertising and marketing. When you see words like “This weekend only, 40% off” you feel the urge to act now or miss out on the deal.

  11. Budgeting in the Fun Stuff says

    June 11, 2010 at 3:59 pm

    I like the idea but we live on a zero-based budget so I couldn’t incorporate it. We only buy things when they have been budgeted for and at a certain price anyway, so the budget already takes into account that I’d never buy something at “full price”. 🙂

    It works out okay fro us anyway since our savings goals and targets are always hit first and we pay the bills and live on the rest. If there does happen to be any extra, we split it between savings and fun money accounts.

    • ffb says

      June 12, 2010 at 8:53 am

      Sounds like a zero-based budget works well for you! “We only buy things when they have been budgeted for and at a certain price anyway,” says it all. The whole idea of a “sale” only adds to the value of your purchase.

  12. Joe Morgan says

    June 17, 2010 at 8:18 pm

    I LOVE LOVE LOVE this post!

    I can’t believe how many people I come across with that “you’ve got to spend money to save money” mentality, and then they look at ME like I’m a fool when I point out they just spent twice as much as they needed or intended just to get that 3rd item for free!

    • ffb says

      June 18, 2010 at 8:55 am

      Sometimes it makes sense to get something on sale but yeah, many times we get pulled into the idea of a great price even if we don’t need it.

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