Frugal Tip: When “Saving” isn’t really “Saving”

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This might come off as more of a rant than a “tip”, but please try and look past the “rantyness” and get to the core of the issue…

We’re bombarded with messages about sales when you can save 10% off with this coupon, or save 20% if you sign up for that credit card, or save $1.00 off a cake…

The cake is a lie!

Sure, that sounds nice, but the cake is a lie!

“Saving” money is not the same as “spending less money”. Sure, “spending less money” is a good thing, as long as you’re spending that money on things you actually need. “Spending less money” on something you don’t really need, well, that’s just silly. Why not donate it toward my mortgage instead?

“Saving” money means putting money into a savings account, a CD, an IRA/401(k), an envelope under the mattress, a jar buried in the back yard, etc.

In short, “saving” money is the opposite of “spending” money. When you “save” money, you haven’t spent it, it still exists somewhere that you can go and get at a later time. When you went shopping for that piece of clothing and “saved” 40%, where is that 40%? If it cost $100 and you “saved” 40%, you spent $60 AND you put $40 away for later.

But, if you didn’t put that $40 away for later, you haven’t saved anything. You simply spent less.

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