Friday, January 18, 2008

Saving Money at the Grocery Store isn’t Really Saving!



by Janine Bolon

Last week I was visiting southern California and I stopped by a grocery store. As the cashier finished ringing up the sales she took the receipt out with a flourish, circled an item at the bottom and said to me, “You’ve saved $12.16 with us today!” I answered, “Yes, but I spent $25.63.” She looked at me with her smile fading and rebutted, “But you saved almost half that amount.” I thanked her for her time and took my groceries out to the car.

As I fumbled for keys, balanced milk jugs, and corralled children into car seats, I realized why I was so vexed. I didn’t save anything at that grocery store. I spent money. Not a penny was “saved.” I don’t care what the cashier has been told to say by her management. It is a lie to say I “saved” money.

No wonder so many of my clients have a hard time understanding the concept of savings and what to do with it. All around them businesses, friends and family are using the term “savings” and it has nothing to do with money that is conserved. It mostly states how much money wasn’t spent that could have been spent. This is not savings. This is spending. As I was ruminating over this latest incident my son pipes up from the back seat, “Mom, did we really save money back there?” I started laughing. A ten minute discussion ensued where I pointed out what savings meant to me versus what savings meant to the cashier. Stay with me, I know some of this is rather basic, but I figure if my children and that sweet cashier were getting conflicting messages on savings, I’m sure other people are too. This is what it means to save.

1- If you spend money, that isn’t saving! Forgive me, dear reader, for stating the obvious. But with the latest marketing techniques you may end up confusing what it means to save. If you have money leaving your bank account instead of earning interest, then you can rest assured you are not saving. I don’t care how pleasant the person behind the counter is when he/she circles a figure at the bottom of your receipt.

2- If you resist the urge to buy something and walk away, that is saving money. Many times we buy things that we simply don’t need. We want to treat ourselves after a hard day at the office or an argument with our spouse. If we are emotionally upset, many people spend money to feel better. To resist this urge means you are saving money. Find an activity that is free and stop the spending spree.

3- If you maintain a piece of equipment over the years so you don’t have to purchase a new one, this is saving resources. My husband and I take our vehicles in every time they are in need of an oil change. With the amount of driving we do, this is a frequent event! However, by maintaining our vehicles we can usually get 10-15 years of service out of them before we start to have major issues. That is saving money!

4- If you get your bank statement in the mail and you see that your savings account has increased rather then decreased, guess what? You’re saving money! You actually are in the habit of putting money aside and conserving your resources. You are a member of a minority by doing this. Only 1% of Americans save. By having a savings account where you consistently put money aside you are in the top echelon of our society. Cool, no?

I realize this is basic stuff. However, I also know how many folks are using language that says they “saved” money on a sale today when they actually SPENT money on an item! You either wanted that item or not. Don’t justify yourself using the marketing babble that you’ve heard. That ends up amplifying the problem. Be part of the solution and when you say you are saving money, make sure you mean that it is money in your account!

Thank you so much for letting me get that out of my system. I had no idea how much that trip to the grocery store riled me up!!! Happy Abundance to you.

7 comments:

Anonymous said...

If you have $500 in the bank "saved" and get paid 2% interest while inflation grew at 4% then you're losing money not saving it.

The Money Muse said...

Anonymous:
Thank you for the comment! Yes, you are totally correct. I use the term "bank" or "savings account" a little too generally don't I? I should have said that I keep most of my "cash" reserves in a money market fund. However, I would recommend to anyone that they research the different savings vehicles and decide for themselves which one has an interest rate they are most comfortable with. One place to start looking is http://www.bankrate.com/

Have a great weekend!

Jacob said...

This is one of my pet peeves when it comes to shopping (the other one being perpetual "sales"). I know that the cashiers have been instructed to tell me that I saved X dollars, so I won't take it out on them. At least it's not as obnoxious as the up-sell (which is not their fault either).

The Lazy Organizer said...

Ok, what if I buy food at the grocery store instead of eating out though. Isn't that "saving" money?

Another concept that cracks me up is when stores offer buy "x" amount get one free. I fell for this at Mrs. Field's last week when we indulged in a treat at the mall. We were only going to buy two cookies but if we bought one more then we got one free. Instead of spending $3 we spent $4.50 but look how much money we saved by getting a "free" cookie!

Jen said...

This is what I have been screaming for a very long time.

But I also want to add, when the stores jack up the prices, only to lower them on "sale" and then say we are "saving" annoys me even more. Like Wal-Mart's "roll-backs" that are actually a few cents *higher* than last week's price, but they raised the price by a dollar before rolling it back 93 cents...

Jen said...

Oh and a note to anonymous--if you take that $500 and buy something with it, say a couch (that is "worth" $560, so you "save" $60, but actually still spend the $500), instead of parking it in the bank at 2% interest, a year later the couch only has a resale value of about $125, because now it is a "used" couch. Even in new condition it's only worth about 25% of its original value.

Whereas in the bank, the majority of that money is still available to you to use toward things you need in the future, and therefore the majority of that money has actually been saved and is available for use on the proverbial "rainy day". Losing between inflation/interest is less harsh than losing by depreciation of goods purchased. In the case of the $500's in the bank at 2% vs $500 in a couch its the difference between losing around $12 worth of purchasing power vs losing around $375 in negative equity in a couch.

So with money in the bank, you have still saved it (ie-squirrelled it away), even if it's not growing, or is even shrinking slightly, you still have the majority of that money available for your use, a much better return than investing in any type of durable goods that companies like to tell us we are "saving" when we purchase them.

Obviously money saved at 13 or 18 or 20% is better than money losing value to inflation in a CD. But even the CD at 2 or 4% is better than investing in "stuff" and buying into the attitudes of commericalism and spending for the sake of saving or buying something "because" it was a good deal.

Brady said...

Great savings post! ;) It is a good reminder of reality. With most people being in front of commercials all day long "savings" has obviously been distorted. Your post would make a perfect addition to http://BankFly.com