When it comes to saving money, people can trick themselves into doing just about anything. The appeal of a lower price can make someone wait outside for five hours on Black Friday to save $50 on a TV. When you break it down, that $50 is probably a lot less than what that person would've been paid had they spent the time working. According to the Bureau of Labor Statistics, the average hourly earnings for a person in the private sector was $22.87 in March, 2011. Just think: for every hour a consumer is spending to save money, he should be valuing that time accordingly. Here we look a few common hoops people jump through to save money - and why they may not pay off. (For related reading, take a look at 5 Ways To Trick Yourself Into Saving Money.)
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Saving Cents and Wasting Dollars
A major cost in many people's lives is gas. If you're commuting to work, filling up that tank can really add up. So, naturally, consumers are always trying to find the cheapest sources of fuel around town. However, gas stations have such competitively priced fuel that you're really only saving a few cents for every gallon. And, at the most, maybe a dollar or two on each fillup. Even though it feels good to get the best price on gas, if you're driving across town to find that one-cent-per-gallon-cheaper gas, you're wasting your time and your money – and more gas. (To learn more, read Gas Savings Tips That Don't Actually Work.)
Variety is Not the Best Thing for Your Groceries
There are consumers that scan their weekly grocery fliers and plan out which stores to hit to get the best specials. There are times when this can add up to considerable savings, but if you calculate the time spent driving from store to store, parking, finding the product, waiting in another line-up at the cashier, loading the groceries in and driving to the next store, you're wasting a considerable amount of time to get that can of beans for 79 cents rather than $1.09. You may be saving $10 on a $100 grocery bill, but if it's taking you more than a half hour, and you're wasting gas while getting there, it's really costing you money.
Shopping Online Adds Up
Online shopping is a great way to quickly compare prices and ensure you are getting the best price for a good. There are also sales that are specific to using the company's online store, which can lead to more savings. However, this only really results in savings if shipping is free. If you're looking to buy a single book, it might be listed for less on a site like Amazon, but after you pay the shipping, you may as well go somewhere nearby instead. In addition, companies like this will have a minimum amount you must spend to qualify for free shipping. This makes shoppers feel like they're getting a good deal, when really they've just been convinced to spend more money to get something for free.
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Cross-Border Shopping and Out-of-Country Ordering
Crossing over to the region or country nearby, especially when taking advantage of currency changes and cheaper prices, can save you money on the surface. However, in addition to the extra costs of traveling, using up your valuable time waiting in line at the border and returning, you can also get dinged on paying duty when you travel back to your home country. This can also happen when you're shopping online from a different country. Though currency differences and fluctuations make it seem like the product is cheaper, the shipping costs can be pricey, and you may also have to pay duty or customs on the goods that you're importing.
Promotions and Sales
It seems counterintuitive that a promotion or sale ends up costing you money, but when the store does it right, it makes you think you're getting a deal when you're really not. The key to this is preying on consumer sales psychology. If a restaurant is offering a "buy a drink and fries and get a free burger" deal, or a retailer is having a "buy two get the third free" promotion, you can end up spending more than you wanted just to just to get something for free. If you just want a burger, it probably costs less than a drink and fries, and if you just want one shirt, you're not saving any money by buying an extra just to get the third for free. This kind of excessive spending can end up costing you more money than you ever intended on spending.
The Bottom Line
When you think you're saving money, it's important to consider what kind of opportunity cost you're experiencing; valuing the cost of your time and factoring in additional costs and resources associated with getting a deal are essential to actually saving money while shopping. (For additional reading, also see How Savings Are Saving The Economy.)