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THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Friday, September 25, 2009

PART ONE: BRINGING HOME THE BACON

THE LAW OF AVERAGES

Each and every second of our lives we are consumers. As the clock ticks away the seconds, minutes, and hours of the day an invisible average is being calculated and recalculated and recalculated again. A long time ago I started to call this my daily consumption rate. It's a number I know is there, even though I'd never, in a gazillion years, be able to have the know-how to actually calculate it. And quite frankly, I don't know why I would want to. That would make me a bit of an obsessive, compulsive, would it not? But just the knowing that it's there makes me more aware of the everyday consumption decisions I make that I know influence it. In many ways, the daily consumption rate is in fact a key element in all of my theories about saving money, and I will refer back to it often.

Basically, every time I flip on a light switch I'm consuming electricity. Every time I flush a toilet or turn on a faucet I'm consuming water. Every time I eat a sandwich I'm consuming bread, meat, and condiments. There's a cost attached to each and every one of these actions. It adds up to a dollar amount over the course of each day. Fractions of pennies over each and every second.

Of course, you're asking, so what exactly does that have to do with saving? Isn't daily consumption about spending?

Quite simply put; how you spend your money, but more importantly how you consume the items you buy with your spent money is directly related to how you will ultimately save your money.

As a rule, we are a terribly wasteful society. We throw away more useable stuff as a country than the rest of the world combined. I won't even begin to touch on how much food we throw away. But it says a lot about our way of thinking, and also serves to illustrate the cost of our prosperity as a nation. We've taken the opportunity of plentitude for granted, and we're quite literally tossing our money out with the garbage.

As an example, our nation's landfills are full of weeks worth of extra shampoo, toothpaste, and hand soap. We simply don't want to take the time to eke out just one more spat, or one more palmful. We simply squeeze the bottle or the tube and when nothing else comes out we decide that it must be empty. And it's not necessarily so. Turn the shampoo bottle upside down and the next day you'll get another palmful of the stuff to wash your hair. Take a scissors out and cut the toothpaste tube open and you'll get one or two more brushings out of it. Doing these kinds of things may seem petty, even ridiculous, but over time it really does add up to savings. Overall, it reduces the cost of the item you bought and that's money in the bank.

Just for fun let's break it down one step further for the purpose of illustrating my point; if I buy a 6 oz. tube of toothpaste for $2 and I get 24 brushings out of it (I have no idea how many brushings I get by the way, I'm not that anal retentive) assuming a quarter oz. per brushing, my daily cost is about .083 cents. If I cut open the tube and get just two more brushings out of it my daily cost is .076 cents.

I know, I know. It's a fraction of a cent that's been saved. And you're right, it's not going to make the difference between your driving a Cadillac vs. an Aveo. But think about it. You'll have to buy 15 tubes of toothpaste to my 14 for the year. That fraction has now become $2. Imagine if you applied this principle to every thing you consume in your daily life. In reality the savings do add up to quite a lot more than you think. And again, this is about a lifestyle. You have to be thinking about saving at every turn, and you have to be thinking about it in fractional terms if you really want to get the most out of it.

Little things count! And yes, getting every drop out of everything you buy and use counts. It's admittedly hilarious when you think to yourself, all this to save a friggin' penny? Believe me, I'm laughing too. It is funny. I laugh at myself all the time about it. But the reality is that there's more money in the law of averages than you think, and those pennies add up. All of these things are contributing to that average. To the daily consumption rate. What you do, or what you choose not to do makes things cost more or cost less.

Keep in mind that saving money is also about finding wasted money. Maybe you don't want to take your life to the extreme of cutting open toothpaste tubes, and that's fine. But just take the concept in mind, and see where you can best apply it to your own consumption habits. You will definitely save money.

READ PART TWO

2 comments:

jessica said...

It's Jess! I have been on a serious money saving mission with diapers. From cloth diapers to buying the cheapest most generic ones I can find and give them a try. I figured on average per diaper I spend about 17 cents. So mom and I found a pack of 80 diapers at the goodwill(unused of course)for 6.99. That is approximately 11 cents per diaper instead of the 17 cents. We were cracking up thinking about saving only 6 cents, but you would be surprised how it all adds up. The best part is when I am using the cloth diapers, that's 17 cents more in our pockets!! Of course, when your ringing out a massively poopy one the savings doesn't always seem worth it. But I am really enjoying the challenge of it! I haven't tried cutting open the toothpaste, but I will now! :)

Jim Bauer said...

Oh man, as I pictured you wringing out poopy diapers I had a newfound sense that perhaps saving money is a load of crap. :)

Pun definitely intended.

On a serious note, this is the part I hope I can convey to a few of the folks, that getting the most out of all of our money is absolutely necessary in order to achieve our goals and put more in the bank. However silly or over the top it may sometimes seem, a penny is a penny, and if you can save one you should.

By the way, I should add that every time you reuse one of those cloth diapers your savings grows. You only pay for the cloth diapers once. In the Law of Averages, each and every additional use of the item reduces the daily consumption rate. The first time you use them you may be saving 6 cents. The 2nd time you are saving the 17 cents you would have paid for the disposable diaper.

Of course, this is discounting to some degree the consumption of water and laundry soap to wash them, but you get the idea. :)