|Doris Dobkins is the publisher of $mart Money New$. You can subscribe by
visiting her web site at
of us will do anything to earn a few extra dollars but are we just
as willing to spend a few hours looking for the best deal when we
make a purchase?
I read a GREAT quote this week and it
really made me stop and think about the cost of spending money. The
quote read as follows: "A Dollar Saved Is Two Dollars
Let me ask you a question. If you got
a $400 one-time bonus at work, how much money would you actually
take home in your paycheck? Or, suppose you got a $2.00 an hour
raise, how much would that equate to per hour in take home pay?
In the first situation of a one time
bonus of $400, most people would take home a little more than $200.
By the time all your deductions such as income tax, social security,
and retirement plan contributions, etc. are taken, out, there's not
very much left. We call the left over amount, disposable income.
I don't tell you this to depress you
but to hopefully direct your thoughts on saving in a new direction.
By saving a single dollar, you can achieve the same result. For
example, if you are in the market for a video camera and you find
one at a liquidation sale that saves you $200 on the price that you
would pay for it full retail, the savings is about the same as
getting a $400 bonus. If it took you two hours to find this bargain,
your savings is worth $200 per hour.
Many people would be willing to work
overtime or on the weekends or even get a second job to earn the
extra $400 needed to buy a new toy, but they don't want to take the
time to "save" some money. This doesn't make any sense.
Being called thrifty should be a compliment. It implies a
disciplined, economical and common sense approach to money.
Let's also tie this concept to credit
cards and their interest payments. When you carry a balance on your
credit care, and are charged interest, you have to earn about double
that amount to take home enough to pay the interest.
If your interest charge for one month
is $150, it takes approximately $300 worth of earned income just to
pay that interest. If you make $20 an hour, most people think they
just need to work 7.5 hours and that would take care of the interest
when in actuality, it would take about 15 hours of work to pay the
So, the next time you are tempted to
spend money on something that is not really a need, think about it
in terms of before tax dollars. Every dollar saved is actually two