Painless Penny Pinching Part One: How to Save Big Without Feeling Deprived

These days, nobody much cares about the lowly penny. If it wasn’t for my wonderful grandson, Zachary (Hi, Zach!), I’d think I’m the only person left who still stoops to pick them up. Similarly, most articles on saving money focus on getting you to do the things that hurt so you can put aside big bucks. Yet pinching pennies is a lot more important and rewarding than most people realize.

For a sense of penny-power, take a look at this typical checkerboard, which has 64 squares:

Starting with a single penny on the first square, imagine that every day you will double the number of coins you put on the board. On the second day, you’d put down two pennies, the third day, it’d be four cents, on day four, you’d plop down eight pennies … and so on … until you got to the last square on day 64.

Would You Rather Win a $50 Million Lottery … or Keep the Pennies?

If you chose the pennies, you’re right! By the time you’d get to the last square on the checkerboard, there’d be 9,223,372,000,000,000,000 pennies on just that one space. The total on the checkerboard would be $184 quadrillion – that’s about 3.5 billion times more than winning a $50 million lottery.

Now imagine how much you can save by pinching a few pennies here and there! But where should you start? I recommend you come up with a painless way to save some cash every single week. Pick an amount you would never notice, invest, or miss. For argument’s sake, I’ll use $25 a week as an example, but feel free to choose a higher number.

Pinch your pennies however you’d like - in $1 or $5 increments - or change your savings ways every week – whatever you want. Just stick to not spending that $25 every week. Maybe one week, you’ll go for fewer lattes, and during another, you’ll take a tad fewer taxis.

Please consider one of my personal favorites: have a great Mexican fiesta at home instead of a meal out. Olé! And after you’ve enjoyed all the taste treats, watch movies that you take out of the library -- for free -- and get to keep for a week.

The Penny Pinching Possibilities Are Endless

While there’s no major belt-tightening involved, to keep your penny pinching painless, choose ways to cut back that won’t bother you one iota. Still, the rewards are so huge, it’s not a bad idea to give yourself an extra nudge every now and then, when you can.

One great way to give yourself an extra nudge is to make sure you actually use that $25 a week for something constructive -- to get out of debt or to save for the future. For now, let’s assume you save that $25 every week. Guess how much you’ll have in 20 years: $64,187, assuming you earn a conservative 8% in interest. Wondering about 30 or 40 years? Depending on when you plan to run for that 8:09 train for the last time, there’d be $162,751 or $382,109 more in your retirement nest egg. So much for small change, huh?

To prime your “frugality pump,” here are some of my favorite painless ways pinch pennies without depriving yourself of things you enjoy.

1. Brew your own. You’ve heard it before but it bears repeating. Whether at work or home, making your own coffee -- even using the choicest beans and the best coffee-maker -- can easily save you a bundle, especially if you compare it to buying cup after cup of the highest-priced java. I’ll drink to that!
2. Bring lunch. You know brown-bagging it will save you a lot of money over eating meals out. It’d be a piece of cake to save $25 a week just on lunch. There’s a bonus beyond the money you’ll save by avoiding those fast food joints. Think of the arteries you’re saving … and how you can use the extra time to get in a bit of exercise. Talking a walk every day at lunch time is a lot cheaper than joining a gym.
3. Sometimes it pays to REALLY stock up, especially when the products you regularly use are on sale – at the supermarket, drug store, health food store – wherever! For example, say your favorite apple juice normally costs $2.29 but it’s on sale this week at $1.50. Buy all you can store because you’ll save 34%. The “yield” is actually over 52% - because $1.50 will buy what usually costs $2.29. Where else can you get a 52% return on a measly $1.50 investment? What’s stocked on supermarket shelves often beats Wall Street and makes it fun to pinch pennies!
4. Spend an extra minute in the produce aisle, and you’ll walk away with plenty of healthful freebies. No, I’m not suggesting you sample the grapes, but the next time you buy pre-packaged fruits or vegetables, weigh a few bags before tossing one into your shopping cart. While a 5-pound bag of onions, potatoes, carrots, apples, oranges, etc. must weigh at least 5 pounds, the packers can’t pile the perfect weight into every bag. So they invariably put in extra. It’s a piece of cake to get a bonus half pound or more for free. Savings of 25% are routine. Try it!
5. Prefer “designer water” to what comes out of your tap? Install a water filter. You’ll save a bundle, avoid a lot of lugging, and probably end up with perfectly fine water. You’ll also be doing a good deed for the planet. A recent study found it takes 18 million barrels of oil and up to 130 billion gallons of fresh water a year just to make the plastic bottles that contain the 41 billion gallons we actually purchase, much of which is plain, ordinary tap water.
6. Herbs and spices are almost always cheaper at the health food store or even at the drug store. If you’ve got a heavy hand when it comes to the cumin, curry, or coriander (like I do), you’ll be amazed at how much money you can save by not buying these flavorful items at the supermarket.
7. Shop smart, but don’t fall for the stores’ tricks. If you’re taking the time to read this, you probably already know to use coupons for items you normally buy. Remember to avoid fast, processed and convenience foods, take advantage of store sales, and keep your eyes out for temptations that are designed and placed to appeal to your kids.

Just don’t let your guard down! Perfect example: You might think that the largest box is always the best buy. Wrong. Sometimes, two smaller boxes are cheaper, so it really pays to check the unit prices, especially on items you use regularly. In my supermarket, two smaller containers of baking soda are always cheaper than one larger size box. It makes no sense, but once you know, the savings are almost automatic.

There are lot of ways to penny pinch painlessly in particular situations, like when you’re eating out or traveling or when you’re in need of specific products, be they prescription drugs or insurance. And there are lots of strategies penny pinchers use to make sure they’re getting the best deal. I’ll share them will you in Part Two of Painless Penny Pinching.

For now, I leave you with some questions to ask yourself next time you feel the urge to splurge:

Good Questions to Ask Yourself Before You Buy

1. If you didn’t need it yesterday, why are you buying it today?
2. Planning to pay with plastic? Is this widget something you want enough to take out a loan to buy? If you had to buy it with cash, would you?
3. If you spent 15 minutes or so comparison shopping, might you find a better price?
4. Can you accomplish the same thing at lower cost?
5. Would a generic be just as good as the name brand? Generics are great if you like the taste and/or can get the kids to go for them. But buying the cheaper brand and then throwing it out won’t save you a penny.
6. Might this be an impulsive purchase? Slow down! If you don’t buy it now, what are the odds that you’ll feel as though you made a mistake by the time you get home? How likely is it that you’ll come back and buy it tomorrow?

Remember to pick up those pennies!
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Nancy Castleman has spent 20+ years helping people get out of debt, save money, and live better on less. She considers her book, Invest in Yourself : Six Secrets to a Rich Life (Wiley, 1998, 2001), to be her life's work. It explains how to invest your time, energy, and money to create the life you want.

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