by Stacy Francis, CFP®, CDFA
In a teleconference last week, a woman shared that her credit card debt was very much weighing on her, and that she wanted to take on an extra job for a while to pay it down. The problem was, she had no time whatsoever to spare. It all seemed to get eaten up by housework and errands. Her grocery shopping alone took over four hours, every week.
Puzzled, I asked her how that was possible. She replied that because she was in so much debt already, she couldn’t afford to pay any more than the cheapest possible prices. To obtain this, each week she had to hit up five different stores, cashing in coupons and buying for less.
To some this may sound crazy, but the truth is, she is far from alone. With the economy crumbling, people are penny-pinching like never before. The question is, does it make any sense?
This is one of those lovely albeit rare decisions where you can get a reliable, clear answer with just a pen and a paper. First, calculate how much you really save – the total difference between what you pay now, and what you would pay if you chose the store with the lowest prices overall. Then, compare this with the gas you use when you drive to the different stores, as well as any other expenses or opportunity costs relevant to your case (such as money you could have made spending three of those hours at an extra job). Putting these numbers together, you can learn what is really the best option for you. You may be surprised!
