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A few weeks ago, a local news station contacted me about doing a segment on “back-to-school savings.” While I was flattered, this isn’t the type of thing I am typically interested in doing.
For starters, I have no desire to be on camera, but I am also not the frugalista some people make me out to be. I usually try to keep my savings game as simple as possible. My money-saving tips are usually common sense, and they typically require very little effort.
Funny enough, I saw a news segment on another station cover the same topic a few days later. During the interview, the “frugality expert” suggested all kinds of craziness when it came to saving on back-to-school essentials. For example, she said to visit at least four or five stores to pick up the best deals at each. She also recommended downloading several apps, printing loads of coupons, and jumping through all kinds of hoops.
To me, her advice sounded entirely overwhelming – especially since we were talking about saving on items that are fairly inexpensive to begin with. I mean, how much is a package of pencils? Two dollars? Besides, heading to four or five stores, downloading apps, and searching for specific coupons may help you save a little cash, but it will cost you something a lot more important – time.
For full disclosure, I’m happy to share the back-to-school shopping strategy I used for my 4th and 2nd graders this year. I went to one store (Meijer) to buy the supplies on their list. To save money, I bought a few large packages with a bulk discount and divvied up the items (pencils and glue sticks mostly). I also made my 2nd grader use her backpack for a second year in a row because it is still in good shape. There were a few things I didn’t pick up at Meijer because they were out of stock, so I ordered them with my Amazon Prime account – which included free shipping.
I did not drive around like a chicken with my head cut off to save a few bucks on pencils and notepads. Why? Because my time is worth money, too.
Why Doesn’t the Middle Class Care About Their Time?
While I like to think nobody will actually follow the “expert’s” advice of driving to five different stores to pick up school supplies, I have resigned myself to the fact that this is how much of the middle class thinks. By and large, the middle class has an extremely short-term view of their finances. They are happy to jump through a ton of hoops and waste oodles of time if they think they’re saving money. And it almost doesn’t matter whether it’s true or not.
Case in point: Last month, everyone went crazy over Build-a-Bear’s new “Pay Your Age” sale. Apparently, all these soccer moms (along with a few dad bods) stood in line for up to eight hours to save – at most – $30 on a teddy bear. Then, they got pissed when they didn’t get the price they wanted and some of the stores were forced to close shop early.
Nobody needs a teddy bear anyway, but can you imagine wasting your entire Saturday in line to get a teddy bear at a discounted price? I can’t, but – obviously – thousands of people were willing to invest their time this way.
The Build-a-Bear fiasco is just one example, but there are plenty of others. We all remember extreme couponing – the hobby that involves people spending hours and hours every week to score perks like free body wash and toothpaste – items that are normally cheap anyway!
And, don’t get me started about Black Friday and other big sales events. Every year, the news stations interview people who are sleeping in tents to save a hundred bucks on a flat screen TV at Best Buy or score $20 off a toaster at Target. It’s insane, but I guess some people think it’s fun.
The Sad Truth
But, you know what? I don’t really have a problem with people wasting their free time to save money – even if they don’t actually need the items in the first place. What bothers me most is the things people won’t spend time on. Here are some statistics that show the sad truth:
- According to the most recent Gallup poll on budgeting, only 1 in 3 American households creates a detailed household budget every month.
- Debt.com statistics also show that almost 20% of Americans have zero dollars in savings and that 31% have less than $500.
- A 2017 report from CareerBuilder showed that 1 in 10 workers with six-figure incomes were living paycheck to paycheck that year. Another 28% of workers making $50,000 to $99,999 per year struggled to make ends meet.
- A 2017 poll from Gallup noted that, through 2017, the percentage of Americans who own stock is down among all groups other than older, high-income Americans. In total, only 54 percent of us own stock at all.
- The average household with credit card debt carries $9,100 in debt on their credit cards. Enough said!
What do these statistics mean, exactly? While there are always exceptions, and some people are just struggling in general, these stats reveal a lot about middle class attitudes pertaining to money. People will spend their weekend mornings cutting coupons, but they can’t make time to sit down and create a monthly budget or hatch a plan to pay down debt. Nobody wants to talk about investing or think about retirement either, which is part of the reason we’re so ill-prepared.
We’re so busy filling our lives with fun, easy activities that we don’t make time for the important stuff. We’ll stand in line all day to save $30 on a teddy bear for our children, but we can’t be bothered to learn how to save for their college education. We research and download cash-back apps, but we don’t see the value in tracking our spending so we know where our money is actually going. We spend time dreaming about the kind of life we want, but we never look for ways to make it happen.
We do what’s easy. We do what is cute. We do what feels good instead of what is right. And one day, many of us will regret our decisions. But, by then, it will be way too late.
How the Middle Class Can Change Their Fortunes
If you make a middle class income, the reality is that you are in a great position to transform your future. By making a few basic changes, you can simplify your life and build wealth in one fell swoop. Here are some steps to take right now:
- Create a monthly budget. If you’re not using a budget every month, you are wasting money that could be used to help you reach your goals. Take time to sit down with your spouse or partner and create a detailed household budget. Then, stick to it. Trust me, you will be a lot better off!
- Create a plan to pay down debt. If you have high-interest debt, you’re better off coming up with a plan to pay it off ASAP. Not only are interest payments a waste of money, but they keep you from saving for the future. Create a plan to get all of the debt out of your life, and you’ll never regret it.
- Start tracking your net worth. Your net worth is the sum of your assets (what you own) minus your liabilities (what you owe), making it a great measure of your true wealth. We recommend signing up for Personal Capital (which is free!) to track your net worth and your financial progress. Once you get started, it’s actually a lot of fun to see how the small changes you make add up. You can read our detailed Personal Capital review here.
- Stop keeping up with the Joneses. Stop trying to “keep up” with your neighbors and friends…and that includes avoiding things like dining out several times per week, buying fancy jewelry, financing new cars, or even joining them in line to buy an overpriced bear. Once you focus on your goals and ignore what others are doing, it’s easier to see the big picture and build real wealth.
- Figure out how much you need to save for retirement. Finally, don’t forget to determine what you need to save for retirement. You don’t want to eat cat food and subsist on Social Security in old age, do you? You likely have time to change your destiny, but you have to get started now.
The Bottom Line
Money is an important tool that can help you build the life you want, but there’s one currency that’s actually a lot more valuable than cash – your time. You can’t make more of it, and the time you do have may be more limited than you think.
Before you waste time trying to save $30 on a stuffed animal, ask yourself if your time and energy could be better spent elsewhere. Learn how to start investing, create a budget that actually works, and squash the debt in your life. Above all, learn to value your time, and everything else will fall into place. Do all that and you’ll never have to cut a coupon again.
Do you think the middle class fails to value their time? Why or why not?