Which of the squares A & B is a darker shade of gray?
If you answered A as I did first, you are wrong 
The answer is both of them are the exact shade of gray. (See the proof at the end of the post).
Everyday we are tricked by a number of illusions. Sometimes frugality is one such illusion too.
I went to Costco on Tuesday, around lunch time, to get my weekly shopping done. I usually fill my car when I am there as the gas is cheaper at Costco. This time I decided to skip because there were at least 10 cars in each lane.
Is the Costco discount is worth it for these people to spend 30 minutes of their precious time to wait in a busy line doing nothing?
I am not just talking about the time value of money. I am literally talking about the value of the discount.
On this particular day, the gas price at the pump 1 block from Costco was $3.86/gallon. Costco’s price? $3.75/gallon. A full 11c discount per gallon. So if they all filled up 10 gallons, it is a full $1.10 savings for 30 mins of their time. Even if their cars are much bigger than mine and they had a 20 gallon tank it is still $2.20 savings.
Is it really worth the money?
I am going to assume an average mileage of 20 miles per gallon. For every two minutes a car is idling, it uses about the same amount of fuel as it takes to go about one mile.
So waiting in the line for 30 mins has cost the person .75 gallon gas or roughly $2.8 in gas. They spent $2.8 to save $2.2!
The Costco is 5 miles from our home. If we went to Costco just to fill gas that is another half gallon or $1.875 in gas. Based on these assumptions, I would have spent $4.67 and 30 mins of my precious time to save $2.2. Penny wise, pound foolish!
I don’t wash/reuse ziploc bags
I am picking this because of the sensational nature There are quite a few frugal folks who reuse ziploc bags. I don’t use them because I see it as a waste of resource, I use lunch box instead, but let us assume I use them to pack lunch for me and my husband - 2 bags a day, 10 bags a week.
52 weeks an year = 520 bags. I could get generic sandwich bags for $0.02 (1c a bag with coupon if I find one). That puts me $10.40 in the hole. I am not sure how many times a bag can be reused (if it can be reused at all after it touched some things like raw meat, but we ignore that for this calculation), I am going to assume 5 times for the sake of easy math.
That would get me – 104 bags a year, if I reuse, for $2.08. That would be $8.32 in savings, right? I should be happy?
Well, I don’t have a genie that does the rewashing for me for free. So if I assume I take 20 seconds to wash a bag I spend 2 hrs and 52 mins an year washing ziploc bags, which nets me <$3/hour ignoring the cost of water and soap. Is it worth it?
Sometimes eating out is cheaper
My last example would be our own spending weakness – restaurants. I am not justifying our eating out, we know we should cut back in this area, but sometimes it really is cheaper to eat out.
We go to P.F.Changs once in 2 months or so. My favorite entree is the coconut curry vegetable. (Recipe here : Coconut curry vegetable for 2). I tried this at home and the total cost for the ingredients is ~$35. It took me about an hour to prepare and then add the time to wash the dishes. Cost at the restaurant : $10.5 including tips (1 dish serves 2).
There are flaws in my calculation. The $35 ingredients would be enough to make much more than 2 servings, but I didn’t make more than that and freeze (I hate frozen tofu). I don’t make this frequently enough to justify stocking my pantry. The half used coconut milk can did go into the trash after a week.
I like cooking. So if I consider this a pleasurable time, it makes sense. But if I wanted to have Coconut curry vegetable, financially I would be better off getting it out from P.F.Changs.
I am not pointing fingers at anyone. All of us do these things again and again, Why? Because we want to be frugal. We read about frugal things online or in books. 10 tips to save money on gas – use warehouse gas stations, save money on house hold items – wash & reuse ziploc bags, etc. and follow them religiously. We don’t stop to think whether it makes sense for our situation.
We should do something either because it matters to us or because we know it is financially sensible. Not because someone said it is the right thing to do, not because the personal finance sites listed it as a tip to save money (including this site). It would do us all a lot of good if we actually worked based on what we decide is best for us. Never believe what you are told. Always double check. (That would be Rule #3 if there are any NCIS fans out there I loved how they ended the ast episode “Safe harbor”)
And the proof that both the gray squares are indeed the same shade of gray -
{ 17 comments… read them below or add one }
As always great post Suba. I totally agree. We have to look at all angles and do our research before we know whether we are being frugal or not. I am always into researching my own facts instead of listening to others. I guess I just like to be sure. And like you said, everyone’s situation is different so what works for one person might not work for you.
This is a really good post, and like Miss T said, what works for one does not for another. I have a family member who is an extreme couponer– but for our family, it just does not make sense. There is a lot of work involved with it, and most of the coupons are for products we do not use. I find shopping at my local Aldi store and buying their brands serves us better, without clipping:)
Now, about gray square B– it still looks lighter to me:(
Denise, I have difficulty accepting it too
I even checked it out in photoshop using the color picker.
Interesting. A lot of people do seem to think that “frugality” means “the cheapest option possible”, when I’d prefer to define it as making the best, most efficient, use of your resources (financial and otherwise).
Gas – I don’t think I’ve ever seen more than three or four cars lined up at a gas pump, but I always turn off the engine and wait until I can move ahead. So do most people that I’ve seen – because, as you said, it’s ridiculous to sit and idle, burning gas, when you’re there to get more gas. Then again, I can’t imagine waiting half an hour to get gas – I’d come back at midnight or some other time when they’d be less busy. (However, that said, I’ve waited half an hour in a Tim Horton’s drive through to get a cup of coffee ….)
Plastic baggies – Like you, we bought a few permanent sandwich holders, and a few smaller containers for cookies, fruit, etc. When it comes to frugality, a good-quality permanent sandwich holder makes far more sense (not the cheap plastic from the dollar store). I do wash out heavier bags at times, but they rarely hold anything more nasty than a loaf of bread so it’s just a matter of wiping out crumbs. I do not believe that plastic bags are safe to re-use at all if they’ve held raw meat.
Eating Out – When we choose to eat out, we look at it this way – we are not paying for a meal, which I can certainly make cheaper at home, but for someone to buy the food, store it, prep it, cook it, serve the food, clean the table/do the dishes and dispose of the garbage. We are paying for NOT having to do all of that stuff. And, as you said, there are things that are really only feasible to have out, whether because of the ingredients or specialized cooking equipment. There are definitely times when all of that service is completely worth the $25-40 it costs for our family to eat out.
Usually there are 4-5 cars in each gas lane, that day just was a particularly crowded day.
I agree with you that quite a lot of recipes (in fact most recipes with proper planning) are cheaper to make at home even factoring in the time to make it/clean it. But if we won’t plan properly and waste the unused ingredients it might just be better to eat out.
Great work breaking down the numbers, as usual, Suba. There are times when being frugal, or sustainable/green for that matter, make sense – but there are times when it really doesn’t make sense and your personal finances aren’t being sustainable in the end.
A fair argument against frugality. I hate lines and the idea of washing out a zip lock bag to reuse it is not one I’d like to entertain (a more permanent option is better for the environment anyway). The one thing you have spoken about, but not really factored in here is the value of time. Could you be making money, or being constructive in other ways instead of waiting in lines, or washing out plastic bags? I’d like to think so.
I say take the hit on the gas at the very least and use the time to do something (anything) more constructive that will influence your personal finances in a greater way, there are plenty of options and finding a bit more time to be proactive is always a good thing.
I would never rewash Ziploc bags. Isn’t that negating the point? You’re SUPPOSED to discard them. Great break down of the numbers….sometimes we think we’re being frugal and in reality we’re just being silly.
I remember seeing this color trick, so I knew the answer in advance. However, had I not know, I would have thought that A is definitely darker. I haven’t seen the proof demonstration below with the colored bars, that’s awesome!
I totally agree, sometime being too frugal is more expensive, especially considering the potential side effects of being so.
Suba there are 1000s of frugal myths. Also any frugal practice can be myth to some one. It depends on whatever works for you and your finances. In fact spending is key to growth, if a nation do not spend, there will be no GDP growth. so in essence the whole concept of frugality is a big myth. I nation should be frugal for its own good.
Only after a minute did I see that A and B are the same intensity gray. The brain is “tricked” at first glance. I think of a great example in our application to what we do in interior design. When I buy trim paint I like to go for the ultra white color so that it adds that “pop” to the wall paint color that you have chosen. It really works!
I guess “waiting” for gas is based on where you live. Fortunately, I have never had to wait for gas, but then again I do not shop at Costco to see if that occurs over there. Also if you do idle, you are burning much less fuel than usual and not 3/4 gallon like the post tries to indicate.
If you want to be really frugal buy your gas between Monday and Thursday and only when you actually pass by a pump on your drive that is THEN THE lowest in price.
Luis, the car indeed uses less fuel when idling vs driving and each car is different, so I used the average data from the Consumer Energy center http://www.consumerenergycenter.org/myths/idling.html
It can be very easy for people to fool themselves into thinking they are saving money. Many people do it all the time, especially when they don’t realize that time=money. Some even get EXTREMELY stupid about it. I wrote a post about it a few weeks ago entitled “Don’t Eat The Goldfish- 12 crazy ways people have tried to save money” http://www.cfinancialfreedom.com/CFFwordpress/?p=468
I am horrified! You are truly making the case against frugality. Any thrifty individual knows that it’s not the big ways to save, but the hundreds of little ways, that make all the difference. Because I shop sales, coupon, and use many other shopping strategies, a home cooked meal will ALWAYS be cheaper than eating out. I think you may be blogging under the wrong topic.
Annie, I am NOT making a case against general frugality. I am making a case against “thinking-you-are-frugal-but-in-reality-you-are-not” situations. Even if you shop sales, coupon, and use many other shopping strategies, if you do not plan to use them all up and use them efficiently, no, you are not saving much. Shopping on sale does not always equal saving money. And sometimes for some specialty dishes eating out can be the cheapest option.
You’re seriously “horrified”? God forbid what emotion you’d feel if someone accosted you or broke into your house.
You’re not only horrified, you’re dead wrong. Learn how to properly negotiate the price of a house, or the price of a car, and you’ll save thousands of times what you’ll save clipping coupons (in far less time.) Justification is important for people with compulsive behaviors* – I get that – but the math doesn’t work out if you’re looking for dollars saved vs. hours spent saving.
And it should be obvious what Suba was getting at: division of labor. She can’t cook coconut curry vegetable as well as someone who does it for a living, dozens of times a weeks. Nor can Suba buy ingredients in bulk like a restaurant can. Nor does she have a restaurant quality kitchen, presumably, with a couple of line cooks helping her out. The cheapest way for her to have a P.F. Chang’s-worthy plate of such is to go there and order it.
*You described yourself as using “many other shopping strategies”. Anyone with multiple shopping strategies is by definition at least a little compulsive.
There are so many things that seem like they’d save us money but end up sucking up all our time. Some people don’t care as long as they’re saving money. For me, I try to factor in the time I waste doing stuff to see if it’s really that important to me. Great post, Suba.
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