Friday, November 21, 2008

How Not to Save Money on Cauliflower

Here's a relevant article from the NY Times the other day: Failing Home Economics.

Jill Andresky Fraser, a financial journalist... found herself shopping for groceries on the Upper West Side, stymied by the price of a cauliflower ($5) in the first store she visited. A market a block or so away sold cauliflowers for $2.99 each, but a can of artichoke hearts (another item on her list) was $4.99. A third store offered a deal — three heads of cauliflower for $5 — which was a good thing, because it was getting late and the day was disintegrating into the narrative of a fourth-grader’s word problem. Ms. Fraser filled a cart with cauliflower and other groceries. When the cashier rung her up, however, it turned out that the artichoke hearts at this store were $6.99 a can, and Ms. Fraser had bought four.

“So on the one hand I had saved all this money on cauliflower,” Ms. Fraser said, “but probably my family was never going to eat that much cauliflower, and there was the problem of the $7 artichokes. In the end, I had spent more money than I had ever planned. This was a cosmic moment.”

Well, cosmic lesson #1 is that you don't have to do all your shopping in one store! Buy the cheap cauliflower and then go back to the store that had the cheap artichokes! This is NYC-- chances are that all the stores mentioned were within a couple blocks of each other, and if she's going to be that price conscious, she might as well be health conscious too and give herself some extra exercise.

I don't actually mean to sound that harsh-- I am hardly the one to cast stones here. I make these kinds of mistakes all the time too, and have written about them here quite often! But it's not just out of touch New Yorkers who have this problem:

Kathy Peel, a Dallas-based family manager (that is, a life coach whose niche is training families to run their homes like businesses), said that incidences of feckless budgeting and bad math seem to be on the rise, at least judging from the reports of coaches trained in her system. Leslie McKee, a Peel-trained family manager in Pittsburgh, has noticed a pattern of “people signing up for discount stores that sell in bulk and over-purchasing ‘bargains’ that are so enormous they will not live long enough to use the item,” she said. “Then they call me and spend more money to help them organize it all into mini-malls inside their homes.”

At the high end, there are bulk buyers like Rick Angres, a screenwriter in Santa Monica, Calif., who visits two farmers’ markets each week, stocking up on lilies and orchids. “On the one hand I get a very good price,” he said. “On the other hand, I spend perhaps 10 times as much on flowers as is appropriate for a man of my means.”

Representing the opposite extreme, Ms. McKee said, is the client who is rewinding adding-machine tape so she can use the other side, or the woman whose laundry room is cluttered with dozens of empty laundry detergent bottles, awaiting their turn in the washer, where she leaves one each night — cap off and upside down — to drain out the last drop of liquid.

“What’s happening I think is we are letting all our gremlins out,” said Carol Prisant, American editor of The World of Interiors magazine. “Some people will obsess about drops of detergent and others will want to buy in massive quantities. This is the moment when we all sort of mildly crack up.”

Read the rest of the article for many more fascinating tales of financial irrationality! I'm sure you'll be reminded of a few mistakes of your own!


Middle Class Hick said...

I have said this several times. Throughout your life you have two things that are finite, and mutually exclusive. Time and Money. If you don't have the time (or don't do the work before hand) you have/will spend more money. If you want to spend less money - you have to dedicate more time.

Our whole society is based on that. Think about fast food, home contractors, groceries, etc. I can buy a door or window for $400 for a new window from lowes, but then I have to install it, paint it, etc. I can have a contractor do it for $800. I spend the money because I don't have the time to mess with a 2 day process, and they can do it quicker. Groceries. I can go to a Kroger for the box of rice and milk, etc. then go to a farmers market for veggies, and then to the pick your own fruits up the road from there. However that is 2-3 hours worth of work and I would rather spend that time with my son. So it is 45 minutes at Kroger and maybe overspend a theoretical 8 bucks. However looking at my time, was it worth 8 bucks to get back 2 hours of my life ($4 and hour) to be able to spend more time with the boy?

It is all a matter what your trade off.

Shadox said...

I completely agree with Middle Class Hick. Going to multiple stores to save a couple of bucks and paying with a great deal of time is simply not a good bargain. Call it "penny wise and hour foolish"... :-)

DebtGoal said...

There's definitely an optimized solution between two extremes:

(1)buying ingredients at the best prices yet running around town burning through a tank of gas and hours in the process

(2) buying everything you need in one general store that charges a lot for everything, saving time yet wasting money in the process.

Everyone's different but it's probably best to limit the grocery shopping circuit to 2-3 stores at the most if one is budget-driven.

Optioned Unarmed said...

The more you spend, the more you save! consume, consume, consume!

WhiteStone said...

"This was a cosmic moment."

Perhaps I'm too old to understand why this is a significant statement. I'm sure it means that there was something profound about her recognizing how much she spent. On the other hand, cosmic moments must surely be more momentous than this! I can think of a lot of cosmic moments, so to speak, and none of them have anything to do with the price of cauliflower OR artichokes. You're thinking too low on the grand scheme of things.

bugbear said...

It's hard for someone who is used to buying the best of everything to get used to new shopping habits.

Personally, all I do is think hard about whether a) I need the thing and b) whether it is a price I am willing to pay.

If both Questions come up "yes", then I buy it.

Also, to save money, just limit your exposure. I try to shop once a week or once every 2 weeks and then I don't go in the store again in between.

The fact is, every time you go into a shop, you are at increased risk to buy stuff outside your budget. So don't play that game. Make a list, and go get just that stuff. If you are an overspender, even make an exercise of just getting your list and nothing else, even if the best deal in the world shows up in front of you.

Try it. You will feel a new sense of power and restraint when you come out of the store.