What do You Mean?

Many times I hear some interesting phrases from folks, and while these expressions sound positive, if you look a little closer, they are actually fallacies.

I just saved $10 by Not Buying Lunch

Yes, on the face of this statement, you have saved money, and it is certainly better than going out and buying lunch, but you didn’t really save it as much as you didn’t spend it. You really don’t have any more money, but you do not have less, so it seems like a wash.

An absurd extension of this statement would be, “I just saved $24987 by not buying a Camry today”, which is also true, but that money is not saved, it is just not spent.

I can see why people say that because no one would care if you said, “I didn’t lose money today by buying lunch”, although I’d like the statement, I’m sure many people would be put off by your truthiness.

A more absurd extension of this statement would be, “I saved $10 by not buying lunch, so I bought myself a new pair of shoes to celebrate”, all I can say to that is WOW!

I saved $200 when I bought my new Big Screen TV

Again, I like the sentiment, that you didn’t spend as much on your big screen TV, but you didn’t really save that money, you simply spent less which is a more accurate statement. It doesn’t sound nearly as cheery or as nice to say that you spent less, but it is the case, no matter what.

This statement is a pet peeve of mine, because of the way people make the statement, you saved money by spending money? Unless you are buying into an IPO of a company at below market price (and even then…) I think this is another fallacy that we all live with. You didn’t save you spent less that is all (good for you for paying less, but you didn’t save).

I saved $200 by Installing the Dishwasher Myself

If you are a handy person, and you have a great deal of confidence in your skills, good on you, but you didn’t save that money, you simply didn’t spend it. Another thing to think of, is just how long did it take you to install the dishwasher? How much is your time worth? (but that argument is for another post, I am sure). If someone like me did this, a good question would be, “How much will it cost to fix the damage caused by the system malfunctioning later?” (because I have no confidence in my home fixit skills).

If you can do this, go right ahead, better still, if you know someone who you trust to do this, even better (but remember to offer to compensate them for their help too, in some fashion (be it a beer, or a trade in services)), but there is no savings here there is simply a not spent here.

Disclaimer: In no way am I espousing paying full price for things you can get at a discount, nor am I espousing buying your lunch every day, nor if you can do your home installations that you should not do so, just pointing out how we use the language to stroke our own financial egos.