Tuesday, September 1, 2009

Is it really worth my time to do this penny pinching stuff???

I have lain in bed at night fully aware our garage light was left on by mistake and remained in a state of inertia, despite the upcoming eight to ten hours of pure wasted electricity.

I have been "too tired" to cook dinner many nights and instead picked up the phone to order pizza or Indian carryout.

Sometimes I haven't wanted to bother to organize our donations pile and instead just dropped off a bunch of stuff in bags and didn't itemize it or get a receipt for taxes.

And I think this behavior is typical of many middle class Americans who feel too busy making money at work to bother with the work of saving money at home.

But, of course, this is ludicrous for anyone who dreams of an early or at least comfortable retirement. If you're too tired working to bother with penny pinching, you may well be "working" for the privilege of wasting the money you're working so hard for.

I have a good friend who makes oodles of money as a partner at a law firm, but who at 40 feels burned out. She says she doesn't have the mental energy at the end of the day to study investment theories. But if all her energy goes to working for the money and none is left to manage that money - what are the odds she's making the decisions that will allow her to stop working anytime soon?

We have two huge, dead oak trees in our yard that need to be taken down. My days are busy and the thought of carving out time for three separate estimates aggravates me a bit. I'm assuming about three hours of my time for three estimates. What if I liked the first company and just went with them, "saving" myself the other two hours? And let's say the third estimate would have come in at $100 less than the others.

Teaching law part-time, I figure after taxes, commute, class prep, occasional childcare and dry cleaning, I "clear" about $10 an hour. I came to this figure after reading a wonderful book called, "Your Money or Your Life" by Joe Dominguez and Vicki Robin.

So the two hours I "saved" by not bothering with the other estimates, will cost me ten hours more work to cover.

And what was perhaps $75 worth of clothes and household items in that donation pile that I didn't want to bother with, or the $25 tax deduction it represented, would have taken me about 20 minutes to sort and itemize. Instead I will have to "earn" that $25 through two and a half more hours in the classroom.

That $20 for pizza or $30 for Indian carryout was due to the fact that I didn't want to spend half hour or less cooking salmon patties and microwaving some corn for dinner. But I will now have to spend two or three hours at work to cover those costs.

And what is it costing my friend to turn on the t.v. an hour or so a night to wind down after a long day instead of reading a few books on basic investments?

So next time you don't want to waste your time on penny pinching, realize you're likely going to spend an equal amount of time or more at work to pay for this luxury. You may be surprised how little you actually clear per hour from your job once you've taken out taxes, commute, day care, dry cleaning, and other associated expenses.

And maybe next time you're lying in bed knowing the garage light is on, you'll take the two minutes to run downstairs and turn it off...

Happy Penny Pinching!!

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