Thursday, July 20, 2017
Is a penny saved really a penny earned?
Recently, I've been combing through our budget looking for places to save money without causing any added difficulty to our lives. I just spend one hour of my life to get a $20 monthly savings on our cell phone bill. Can we really say that this $20 savings is the same as earning $20?
If I spent one hour working and earned $20, I would make $20 one time and one time only. I've really done quite a bit better than that. I spent one hour of my time, and now I am going to reap a $20 benefit every single month. When comparing this savings to work (aka earning), there is really no comparison. Let's follow this example through. This one hour I spent working to get $20 off my cell phone bill is going to benefit me to the tune of $20 every single month. Over the course of the next year, I will have reaped a $240 benefit because of this one hour spent creating the savings. If I also spent 1 hour today earning $20 in cash, in order to make that same $20 next month, I will have to work another hour. Over the course of the year, I would have to work 12 hours to gain the same $240 benefit that I got through one hour of time spent finding a savings.
This doesn't even begin to consider the influence Uncle Sam has on the scenario. While everyone's tax situation is different, I typically only take home 70% of what I've earned. So, while my $20 monthly savings really is $20 a month, the earnings might look a little different. In order for me to take home $20, I really have to earn $28.58.
This is quite the philosophical rabbit-hole we've explored; however, I think the point is entirely clear. Never underestimate the power of savings, especially if you can create a reoccurring savings. If you can spend might spend less time saving money then you would otherwise spend earning it!