You've surely heard the saying “A penny saved is a penny earned,” a maxim so old is actually predates the political entity known as “the United States of America.” This means it also predates income taxes, Social Security withholding taxes, and phrases like “pre-tax income” and “take-home pay.”
Nowadays, depending on your tax bracket, a penny saved from your take-home pay can equal more than one and a half pre-tax pennies earned. Yet too many of my fellow Americans can't be bothered to save that penny because they think it's only a penny, and a penny buys nothing these days anyway so why bother?
Because — at the risk of channeling Captain Obvious — those pennies add up more quickly than you think. Maybe people take the maxim “time is money” a little too literally? Time isn't fungible, but money is. Suppose, for example, I tell you a way you can easily cut a minute off your daily morning get-ready-for-work routine. Would you do it?
Frankly, I wouldn't blame you for saying “Eh, why bother? It's only a minute, and sixty seconds more or less makes no difference to me.” Besides, even if you do cut a minute off your morning routine, it's not as though you can set those minutes aside, cash them in at the end of the year and enjoy a 365-minute block of free time to do whatever you please. Nope; time isn't fungible that way.
But money is. And if I tell you how to cut a dollar from your daily expenses, you might have the same response: “Why bother? It's only a dollar, and one dollar more or less makes no difference.” But those dollars add up and if you set one aside every day then at the end of the year, that's an extra $365 for you.
Those pennies and dollars especially matter to me, a former English major whose postgraduate career has consisted entirely of English-major jobs. I'm not going to complain about my nano-income or anything, I'm only going to point out that there are good and cogent reasons why you never hear sane and sober people say, “If you want to be rich, you should either marry a journalist or become one yourself.”
So I can't tell you how to get rich, because hellafino. But I do know some tricks to help you be not-poor, or at least less-poor — and since average American wages haven't been keeping pace with inflation these past many years, saving your pennies might be your only chance of earning more.
Here's a few of the more helpful tricks I've used to raise my own bottom line over the years:
Learn to cook
When I first set up housekeeping (well, “slummy college apartmentkeeping”) on my own, my cooking skills were limited to boiling Ramen noodles and microwaving frozen entrees. I'm not exaggerating when I say it was a no-joke revelation for me, the day I figured out, “Hey, I can make my own spaghetti at home by merely boiling dried pasta and adding sauce from a jar.”
In my college days the Internet was still a pay-by-the-minute luxury, so I couldn't search online for “easy recipes” or “basic cooking skills” or anything else. Luckily for me, some unknown benefactor had a collection of old cookbooks with titles like “Cooking for Beginners” or “Simple Recipes for Incompetent Cooks,” then donated them to a nearby thrift store, where I bought them for 50 cents apiece. Which brings me to my second trick.
Learn to love thrift stores
Granted, your success in this strategy depends partially on where you live – you can't shop at a good thrift store if there aren't any near you. Even the best thrift stores won't always have good offerings — sometimes I leave my favorite store with a bagful of bargains, other times I walk out empty-handed.
With the exception of socks, shoes, swimwear and undergarments, almost all of my clothes come from thrift stores, and most of my furnishings, home décor, cookware, dishes and books, too. You can find especially good bargains if you shop during the off-season — a warm, heavy winter coat often sells for a song in the middle of a July heat wave (I once paid $20 for a gorgeous, warm, full-length artificial mink coat that retailed at Nordstrom's for $980).
The main problem with secondhand stores is that you can't always find what you need when you need it. Like that warm winter coat: if you visit your local thrift store regularly, I can almost guarantee that at some point in the next few months, you'll find a nice, warm, good-condition coat in your size. But right now – I'm typing this at the end of February, with daytime temperatures below freezing – well, maybe you'll find a nice coat today but the odds are against you, since you're not the only one wanting a coat now (and the fashion plates who donate their old clothes at the end of every season aren't donating their coats yet, either).
Which brings me to my next bit of advice (which, I admit, might sound counterproductive at first).
Buy stuff before you need it
Specifically, buy stuff that won't go bad before you use it. Next-season clothing for yourself (or too-big clothing for your growing kids) is the most obvious example, but it also applies to certain consumable goods. My home-supply closet, for example, is full of soap, toothpaste, detergent, dental floss and other non-perishable goods I use on a regular basis, but only ever buy on sale.
Unless I do something stupid. Like last year, when I went on vacation and, upon reaching my destination at some ridiculous hour of late night or early morning, realized that I'd forgotten to pack any toothpaste. I had no choice but to visit a 24-hour drugstore that sold my brand for something like $3.79 per tube. Meanwhile, in my home storage closet, I had multiple tubes that cost me only a dollar apiece — same brand, same size, but I stockpiled when they were on sale, rather than wait until I was out of toothpaste and had to pay whatever price I could find.
The same principle applies to canned or dried foods you can store for a long time without spoilage — if you like a certain brand of canned beans and your supermarket is offering a “buy one get one free” sale, don't just buy your usual two cans of beans; buy several and store the extras in your cabinet. With luck, the beans will go on sale again before your current supply runs out. (In my house, I follow the “rule of three”: if I'm down to three unopened tubes of toothpaste, bars of soap, cans of beans or whatever, that's when I know to keep my eye open for sales to replenish my stock.)
That said, the mere fact that something is “on sale” doesn't necessarily mean it's a good bargain. That's why you also need to ...
Check the unit prices
It sounds obvious but it's easy to forget that the lowest price or sale price isn't always the best price.
That toothpaste price comparison I mentioned sounds like a no-brainer — of course paying a dollar is cheaper than paying $3.79, right? Not always; remember, I specifically mentioned same brand and same size. And size does matter, at least when you're looking for bargains.
Here's a quickie math quiz: assuming two items of equal quality, which is the better deal — paying $1.00 for one ounce, or $3.79 for six?
The dollar option certainly takes less money out of your pocket — at least for now. But what is the actual unit cost? You can pay a dollar an ounce for the first option — or pay only 64 cents an ounce, if you shell out $3.79 all at once. In the long term, the more expensive purchase actually offers the better deal — assuming you're going to buy and use the whole six ounces anyway. For things like soap and toothpaste, you definitely will.
On a related note: if you need new appliances, furniture or anything else which you can't get secondhand, do a little research to find the retail store with the best price — and don't even think of patronizing a “rent-to own” or “lease-to-buy” store.
I've written to warn you about that before — even in the best-case scenarios, customers of such places pay at least twice as much as they would in a regular retail store. Similarly, stay away from “buy now, pay later” businesses where, again, those small individual payments add up to a total cost much higher than what regular pay-when-you-buy stores charge.
A penny here and a dollar there may not seem like much, but those pennies and dollars add up faster than you think.
Depending on your tax bracket, a penny saved from your take-home pay can equal more than one and a half pre-tax pennies earned...