Saving To Spend

It’s fun to consider what we can do when we shop smart and save. The fun is considerable when we realize we’ve sacrificed nothing in terms of quality, but rather made our purchases with some thought and maybe a little effort. What we do with those savings is up to us. Here are a few illustrations:

“Sara” buys new balance sneakers for her family of six. She travels thirty minutes to an outlet store where she knows the deal is “two pairs for seventy dollars.” The shoes would regularly retail for a whopping ninety dollars a pair. There’s tremendous social pressure on her children to have name brand sneakers and Sara feels the shoes hold up well. So she feels it’s a true savings of three-hundred thirty dollars each year. So by going out of her way and taking an hour ride up to the outlet store she saves three-hundred thirty dollars year. The money is added to a mutual fund and over the course of her children’s growing years (let’s say sixteen years) she will have 5,280 dollars from this one strategy alone. The straight interest assumed conservatively at six percent will yield her an additional three-hundred sixteen dollars and change.
Tiffany can’t imagine schlepping up to Delray Florida to save a few hundred dollars and put it into a mutual fund. But she perks up when she realizes that the sneaker savings of 330 dollars can pay for her:
A) Trip to visit a relative
B) forty-seven movie theater tickets
C) twenty-seven tubes of designer lipstick
D) Full spa day including massage, facial, and extras
E) bi-monthly manicures for eleven months
F) Four date nights with her husband at a lovely restaurant



Henry likes to dress well. He also likes to travel and collect antiques. In order to be able to afford the designer labels he prefers, he buys classic designs at the end of year clearance sale, held at stores such as Neiman Marcus. He pays six-hundred dollars for an eleven-hundred dollar Armani suit, eight-hundred dollars for a Cashmere Brioni sport jacket that was previously twenty-one hundred dollars. This year though Henry decided to do something daring when he suspected that the sport jacket he liked wouldn’t sell. He waited and visited one of the Neiman Marcus outlet stores, this one at the popular tourist destination, The Sawgrass Mills, in Florida. There he found the jacket, marked down an additional fifty percent. Henry was willing to spend eight hundred dollars for the coat, so his four hundred dollar savings are genuine. His five hundred dollar savings on the suit is questionable since we don’t know if he would really buy the suit were it not on sale. Let’s call it a seven hundred dollar savings. This is enough for his round trip ticket to London and, with some miles, an upgrade into first class.

Sheila used to spend thousands on clothes. She tried finding the things she liked at lower end stores but that just didn’t work for her. Then she learned that at the end of the season, the outfits she coveted in the department stores were sent to places like Ross, Marshalls, and Loehmanns. So, making frequent trips to check the ever changing merchandise, Sheila realized she could save a great deal of money without the inconvenience of a long drive to the outlet malls. A jeans skirt which cost $37 originally, could be had for $15. That one purchase saved $22.00
If Sheila typically buys five items each month, saving about $110 monthly, she saves roughly $1,320 a year simply by switching shopping strategies.
Over ten years she would have over thirteen thousand dollars saved.