Above A Certain Threshold, Always Shop Around

In day to day life experience, you’ll come across lots of opportunities to spend money.  In fact, people will want you to spend a lot of it.  Once you develop basic savings habits, it’s relatively easy to ignore most of the marketing efforts.  However, when it comes to spending money on something that’s truly important – like medical care for example – many people simply fork over money on the spot without thinking about if they are getting the best deal.  The trauma and urgency of certain events tends to mask opportunities for making rational purchase decisions.

This is something I thought of due to a major expense coming up for our family.  It’s one of those things that is not a fire that needs to be put out, but falls into the “not urgent, but important” category of life tasks that are on one’s plate.  So often, it seems like these are the things that fall by the wayside because of our busy lives.  I have to give credit to Mrs. Mase here, because she’s the one that brought this particular looming expense to my attention.

It’s the kind of thing that requires a specialist of sorts, so you can’t just walk into Wal-Mart or Target and buy something that’s going to solve the problem.  So, we started shopping around, looking at various options.  We talked to multiple professionals and set up appointments at different places.  It’s been sort of a chore, to be sure, but I’m glad we’re doing it.

One of the people we spoke to quoted us what seemed like a fair price.  It was the first person we spoke to though, so how could I rationally know that it was fair?  As soon as I saw the cost on the piece of paper, my mind immediately made assumptions based on previous experiences of purchasing services from this industry, and a range of acceptable prices probably popped into my subconscious mind.  Who knows though?  Sometimes you can make decisions based largely off of intuition, but this was not one of those times.

Going to another person for the same group of services, we were quoted about 30% less!  I thought that this place would be somewhat more affordable, but I was quite pleasantly surprised.  My wife found a creative solution to the problem and suggested we talk with a group of people that I would have never even thought about consulting.  Talk about economies of scale in a family – two minds are definitely better than one 🙂

We’re going to keep shopping around some more, but I think we’ve probably found the place that can suit our needs.  Major expenditures call for major research and due diligence.  I once heard a quip that stuck with me: whenever you are about to spend money, spend as much time thinking about the purchase as it would take you to earn the amount of money to make the purchase.  

This strikes me as a good rule of thumb because it strikes at the heart of a good balance between production and consumption.  If you’re a high earner in your field and know that you can replenish your cash reserves quickly without much more work, many small purchases will be inconsequential to you.  However if you’re just starting out and working two full time jobs just to keep the lights on, you need to weigh decisions to buy many things much more carefully.  But really, regardless of your level of income, if you’re trying to make significant progress toward aggressive financial goals (aka like the Mrs. and I), then you’re going to have to weigh most spending decisions with a certain gravity that you wouldn’t otherwise if you didn’t have attaining financial independence as a priority.

Every dollar has present utility and future utility.  It’s your job to figure out the best use of any dollar at any given moment in your life.

Facebook and Finances: How Staying Away From Social Media Saves Me Money

After graduating college, we decided to quite facebook.  Photo: http://gta.wikia.com/

After graduating college, we decided to quit facebook. Photo: http://gta.wikia.com/

This month marks a very special occasion – Mr. Old Man Mase and I are celebrating our second wedding anniversary! We owe our fabulous marriage to the love and dedication we have for one another. A time like this calls for gratitude and reflection.   Two years ago, we embarked on the journey of a lifetime. Both recent college grads, we assumed we were ready for it all.  Of course, when it comes to academics, we’ve always thrived, but you can’t always find solutions to real world problems in a textbook. It was also two years ago that we decided to abandon Facebook – for good.

We opted to permanently deactivate our accounts during our first week of real adulthood, right after graduation.  Because of this single move, I lost my connection to the rest of the world. I also lost contact with 123456789 “friends.”  I am the last one to find out about juicy gossip (if at all). I have no idea what’s going on in the news. I don’t know about your latest job promotion, or about your new car. Probably the funniest of them all – I didn’t make it to your birthday bash because I didn’t get the Facebook invite.

We have, however, tackled some pretty pivotal financial accomplishments since parting ways with Facebook. In chronological order: We paid off our student loans and credit cards entirely. Saved an emergency fund. Bought our first condo. Cash flowed our wedding reception.  Paid off 40% of said condo.

How in the world did two recent grads accomplish all this? Our income, although we are very blessed, wouldn’t leave you flabbergasted.  The answer lies in self-control, which is much easier to exercise when you’re not on Facebook. You see, Facebook provides a platform for people to showcase (and often times exaggerate) the very best of themselves. And well, let’s face it – our reality will almost always pale in comparison to everybody else’s fantasies.  In order words, Facebook enhances our need to “keep up with the Joneses.”  You’re constantly aware of how much fun other people seem to be having, and all the shiny new things they have. So you feel like you need to upgrade your life, which often leads to impulse purchases.  Don’t get me wrong, Mr. Old Man Mase and I live very colorful lives – we’ve cash flowed several vacations, go out to eat, and do plenty of giving, all while making smart choices for the future.  There are however, some things we simply go without – we live without cable, and have very basic cell service. Not having a Facebook account makes this much easier to do, because we spend our money on things we WANT, not things we feel we should have and/or do to stay in the loop.

Our finances aren’t jeopardized by the latest trends and whims on Facebook.  And because we don’t dedicate precious time to mindless Facebook surfing, we have time to cook from scratch, read, and even get some errands taken care of after we get home from our demanding corporate jobs. Quite possibly the best benefit of all, we’ve been able to meaningfully interact with our handful of lifelong friends, because we’re not blinded by the Facebook fog that makes everyone think they’re friends with everyone.

Happy Anniversary to us! And may we continue to spend our resources: time, money, and energy wisely.

Ballin’ On The Basics

When it comes to the basics things in life, like groceries and household products, finding a way of saving money can really strengthen your family’s finances over time, because those expenses are recurring. If I shopped at say, Whole Foods every month, over the course of several years I would have spent way more money than if I had shopped exclusively at a normal mainstream grocery store. Although I ultimately think focusing on income is more productive than focusing on saving, it is important to recognize that saving money plays an incredibly important role, particularly when you are just starting out in the early years. Any surplus capital that can be used to eliminate liabilities or build assets early on will have an exponential effect later in life.

However, when I’m in my 50s or 60s and already wealthy, I probably won’t care much where I get my grocery shopping done, from a pure cost perspective, because my potential savings would not have that much time to compound into something bigger. This is why we are still pretty frugal in our 20’s even though we are almost completely debt free, because we realize there is a lot more investing and saving to be done. An example of how Mrs. Mase and I are saving money on a monthly basis is how we choose to grocery shop.

Use Affordable Grocers For Regular Food Shopping

In the Midwestern United States, we have a wonderful grocery store called Aldi.  It’s where we get the bulk of our grocery shopping done.  Unlike other grocery stores out there, Aldi cuts back on the non-essential aspects of its business in order to provide really competitive prices on its products and pass the savings on to customers.  One example is the cart system.  Outside of the store are rows of carts, all linked together by a chain locking mechanism.  You simply put a quarter into the slot of the nearest cart, and it detaches from the rest.  Then, when you’re done shopping, you return the cart, snap the chain back in, and you get your quarter back.

When we first started shopping there, I thought this was a bit ridiculous.  Why on earth should I have to put up 25 cents of collateral just to use a stupid cart?!  The more I thought about it though, this is a really smart idea for Aldi, and it ultimately benefits its customers.  By implementing this system, Aldi doesn’t have to waste nearly as much money replacing carts as other groceries stores do, because it’s harder to steal a cart if you have to find a quarter first.

This, along with other cost saving techniques, allows Aldi’s prices to be really cheap.  For example, we often get fancy almond milk for a couple of bucks, whereas a similar product at Whole Foods might cost 30-50% more.  For things that we consume on a regular basis, such as meats, veggies, fruits, and snacks, those dollars add up quickly.  We typically spend just a couple hundred dollars per month on our core groceries.  Gotta love Aldi.

Take Advantage of One Time Deals

Now, Aldi does not have coupons or big deals, which is somewhat unfortunate.  However, the savings more than make up for the lack of deals and coupons.  Every once in a while, deals will pop up and just present themselves to you.  The other day we received an ad in the mail for a new CVS Pharmacy opening down the street from us, and they were having a grand opening pretty soon.  Included in the mailer were several coupons, each for something small like a free toothbrush or any item for free under $3.00.

We decided this was too good an opportunity to pass up.  There were simply too many free coupons to be ignored.  After our trip over to the CVS, we laid everything out on the counter to see what we got:

  • A roll of paper towels
  • 2 liter bottle of Coca-Cola
  • Laundry Detergent
  • A bag of gummy bears
  • Colgate toothbrush
Sometimes companies just give things away in order to draw in new customers.  If you were planning on buying these things anyway – take advantage of the opportunity.

Sometimes companies just give things away in order to draw in new customers. If you were planning on buying these things anyway – take advantage of the opportunity

The grand total…. $0.00!  These were items that we were going to purchase for ourselves anyway, and we ended up getting them for free.  Sometimes life just gives you very obvious opportunities, and you should take them!  These days I’m not the type to seek out huge deals and discounts on small items like groceries – I’d rather spend my time focusing on how to increase my income – but this was just a no-brainer.  When life gives you lemons and the juicer and some ice cubes and some cups – just make some lemonade and be happy you did it.