Penny Wise, Pound Foolish

No one gets pregnant to save money on tampons

I’m sure you’ve seen some crazy juxtapositions over your lifetime. I remember seeing a couple eating fast food on the hood of their Ferrari during a road trip through Germany. When in Taiwan, I enjoy staying in a 5-star hotel, but then lug my laundry to a laundromat because I refuse to pay the hotel washing rates. Each of us gets to decide how we spend our time and money, but I want to highlight some areas that may be a blind spot worth thinking about.

Time

Your time is finite, so don’t waste it. People can sink so much time into searching for the right product at a good price. It certainly makes sense for a large purchase like a home, but probably not for something small. Before buying a notebook for back to school, do you shop at ten stores? Do you go on Amazon and read 100 reviews making sure the paper is sourced from the Garden of Eden and has an anti-paper cut technology? Decision paralysis is certainly a thing and can even linger post-purchase. However, the less consequential the decision, I would recommend committing and moving on.

Previously I used the example of optimizing your tooth brushing routine. Honestly, that’s overkill that will save you a few seconds, but there are probably way bigger time sucks that you should tackle first.

Waiting in line. I’m starting to wonder what is so valuable as to make it worth waiting for. I’ve seen boba shops with a line that was nearly an hour. I’m sure it was great, but I couldn’t justify spending so much time. In NYC, there are companies that will wait in line for you and you pay ~$25 an hour while they wait. Perhaps you should think of your time like that. Is that boba worth $30?

Travel

Another area that you should be wary of is credit card points. I love playing the game, but it is a pretty time-intensive hobby. When asking for recommendations I simply tell people to stick with a few that have easy to use points or even cash back. To get outsized value from points you have to learn about all the transfer partners and check seat availability frequently. You are very likely better off simply avoiding.

I recently found a flight to ski for only 5,000 miles (that’s a steal). However, it involved a three hour drive from the airport to the ski town. I came to my senses and paid more to skip the drive and fly straight to the town. Buying the cheapest ticket isn’t always the best. For me, PTO is often my constraint, so if I can leave after work and get more time on vacation it is worth it for me. Having 3 connections and an overnight layover is a great story, but probably not ideal. I say this having indeed done some crazy flights to save hundreds of dollars, but you should really assess what is worth it.

Some people go on vacation and then try to pinch pennies. I don’t go on vacation to save money. You could certainly save a lot of money if you went to Hawaii and only cooked for yourself. I think it is worth eating the food of the location to try new things you may not have had otherwise. However, skiers, myself include are so guilty of spending $150 on a lift ticket only to stuff our pocket with sandwiches and candies.

Money

People can be tightfisted over small amounts, but go crazy with large amounts. I’ve hear plenty of people say they need to buy a costly EV to save money on gas all the way up to “needing” a $100K Hummer EV. Sorry, the depreciation will cost more than gas. People will also shell out for solar panels which may not have a payback period within their period of ownership.

Some people consider moving to simply save taxes. I would say maybe take it into consideration, but making a decision simply for that reason is crazy to me. Imagine you hit it big and are raking in millions a year. You can enjoy life anywhere, so why limit yourself to a low-tax area?

Conclusion

No one gets pregnant to save money on tampons.

I thought of the example above as the epitome of penny wise, pound foolish thinking. For a year or two you’ll save several hundred dollars, but you’ll gain a liability costing hundreds of thousands of dollars and sleepless nights (and lots of joy).

When making decisions consider the costs in both time and money. If it is a low stakes decision then don’t spend too much time on it. If high stakes or expensive, then certainly take your time, do your research, and assess your situation.