Life’s Too Short for Saving Pennies on the Minute By Washing Ziploc Bags

Why Pinching Pennies is Short-Sighted

Cliché advice on saving money that makes me want to throw my monitor out the window: “Wash and reuse your Ziploc bags.”  On the surface, it seems pretty innocuous and well-intentioned.  But those savings usually come at a steep cost: you’re essentially trading your time for peanuts when you wash Ziplocs.  In 2015, the going rate for large gallon-sized Ziploc bags is about $0.15-0.20 each.  In order to reap some benefits equivalent to the federal minimum wage ($7.25/hr), you’d need to wash at least 37 bags each hour (not including the cost of the water and soap)!

Be Pound Wise

Another item people try to cut back on when they first decide to embrace frugality is their daily coffee, latte, tea, etc.  If you spend $100 a month on coffee, the most you can save every month from this move is $100.  It makes more sense to focus your efforts on your largest expenses: housing and car.  If you’re renting, this means finding the least expensive place that you can live comfortably in.   Sure, moving there may make for a hectic weekend or two but you’ll easily save an extra $100-200 or more this way – far easier and more sustainable than repetitively coercing yourself to stop buying coffee everyday just to save a measly $100 every month.

OK, it’s a bit harder to move if you already have a mortgage, so if you’re in the market for a house, buy the least expensive one you and your family can live comfortably in instead of buying something bigger and better just because your income can support it.  There’s nothing wrong with living in a $300,000 house or condo if you make $150,000 a year.  It’ll be more difficult to cut back on housing, likely your largest recurring expense, if there’s an unexpected job loss , hospital bill, etc than if you’re renting.

As for your car, it’s best to keep it as long as possible unless you have one that is too fuel inefficient and/or costly to maintain.  A good rule of thumb is to multiply how much you spent on the car (in 2015 inflation-adjusted US Dollars) by 10 – that’s roughly how many miles you’d want to drive that car before trading it in for something better.  Every time you perform maintenance, add the cost of maintenance times 10 to the mileage target.  If your new car cost $25,000, you need to drive it at least 250,000 miles.  Buying a used $10,000 car?  Drive it at least 100,000 miles!

If you’re buying another car, I highly recommend getting a new car (contrary to the advice of the vast majority of other personal finance experts) if all of the following are true:

• You liquid net worth (in non-retirement investments accounts and cash) is at least twice the value of the car.
• You qualify for a reasonably low interest rate for a car loan (under 3% which is much lower than the long term average return in a fairly stable portfolio of stocks and bonds.)
• The additional monthly car payments will not present anywhere near a burden on your monthly budget.
• You plan to keep the car for at least 15 years  or 200,000 miles (I’d actually prefer you set the mileage target at 10x the price of the car which is likely even higher.)
• Its gas mileage is at least 30 MPG.

New cars also don’t come with the risk of the previous owner hiding problems from you.  And you WILL be following the maintenance schedule religiously if you’re gonna keep it for 15 years or else you’re looking at even greater maintenance costs down the line.  Do your research and get a Japanese or American model with a stellar reputation for reliability and fuel efficiency (i.e. Honda Civic, Toyota Corolla, Toyota Prius, Ford Focus, etc.)  If the above bulleted criteria do not apply, then consider getting a used car.  Btw, I’m still driving the Honda Civic I got brand new for my 16th birthday 16 years ago, now with almost 200,000 miles as of this writing.

And Penny Foolish

What do washing Ziploc bags, driving 15 miles to get gas at a station that’s $0.20 cheaper, doing your weekly shopping at 8 different grocery stores just to get everything on sale, etc. all have in common?  They’re all a royal waste of your time!  In an ideal world, you’d want to be Pound Wise AND Penny Wise to maximize your savings.  But there’s only so much you can do everyday.  The number of things you’re capable of giving a damn about each day is finite.  Pay too much attention to these small expenses and the stress will multiply: you will lose the willpower needed to deal with the large expenses when they come up, thus negating all the effort you put in to save a penny here and there!!  (See: decision fatigue.)  Why not focus your limited resources in time and attention to the big rather than small ticket items?  Be pound wise, penny foolish – overpaying for a few small ticket items every now and then isn’t gonna kill your budget if you keep the large expenses like housing and car in check.

Time is money.  And we’re all gonna die someday.  So don’t waste your precious hours in order to save pennies or even a few dollars!

Or Just Eliminate the Expense Instead of Pinching Pennies

There are some small ticket items that you can’t feasibly live without like food, water, soap, toothpaste, etc.  For everything else, like coffee or plastic bags, another alternative is to eliminate them completely.  Sure, it may be tough going without your daily coffee but once you get used to it after the initial slump, you also benefit from simplifying your life (by having one less recurring expense.)  This is a last resort – I still think the most sustainable way to save money is to cut back on the few big ticket items instead of giving up the many small pleasures in life that don’t cost too much anyways.

“But I Have Plenty of Time!”

Then put it to better use than pinching pennies!  Go have fun (life’s short)!  Learn a new skill or hobby!  Find a better job!  Spend time with your your family or friends!  Get in shape!  Or figure out a plan to save on your housing and automobile costs.  Now go do something far more productive and satisfying with your time!