Opposing Ways To Save
May. 14th, 2008 08:07 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebI've noticed two strategies for saving money that oppose each other.
On the one hand, you've got stockpiling. This is the one I'm more familiar with where you stock up on things when they are on sale or you buy in bulk to get a lower price. I swear I wrote about this before, but I can't find it.
Advantages to stocking up:
* Very high rate of return. For example, if your favorite cheese is on sale for 10% less than the usual price, then you are earning 10% (actually, more like 11%) on your investment. And if you would have bought that extra package of cheese two weeks later, you earned that 11% in only two weeks, for an annual rate of 286%. If you buy a six-month's supply of cheese, you're still earning a 22% annual rate for the package you eat six months from now.
* Diversification. If you have cash flow problems or transportation problems, some of your future needs are already taken care of.
Risks involved in stocking up:
* The items can go bad (get stale, get attacked by moths, get ruined when there's a flood or blackout, etc.)
* You can change your mind about wanting them (you develop an allergy, you want to support something greener, you want something healthier, etc.)
On the other hand, you can simplify to reduce your overhead. I've talked before about Apartment Therapy's Smallest, Coolest Apartment contest and probably Tumbleweed houses (at least my commenters have). Recently I read No Impact Man's Who Needs Appliances Anyway? He talks about all their appliances and how much they missed each one when they stopped using it during their year-long quest to make no impact on the earth. Some of them they barely missed at all.
For a more extreme perspective, see Sharon Astyk's What To Do with Your Appliances When You Get Over Them. She posits that her kitchen is old-fashioned because it was designed in the olden days of cheap energy, and then she tries to imagine what a kitchen designed in the modern era of expensive energy, might look like. And then she talks about ways to re-use broken appliances. (My favorites are to turn your dead microwave into a solar oven or into a large breadbox.)
My favorite appliance is the refrigerator. So, for me, No Refrigerator for 30 Years seems quite extreme. I read a detective book where one of the detectives has no fridge, so she buys a bag of ice on the way home from work every day and keeps her refrigerable things in a cooler. This article has additional strategies, such as buying fresh food daily and using a higher ratio of pantry goods in your cooking. You could use these techniques to get rid of your extra freezer or to use a smaller refrigerator, not just to get rid of your refrigerator.
Advantages to simplifying:
* You can make permanent reductions in overhead. For example, if you don't have a lot of stuff, you can live somewhere small paying less in rent, electricity, even repairs.
* When you spend less time accumulating stuff, you can have more time for getting a life.
Risks:
* You have to rely more on others and/or be more flexible. You want the store to have just what you need every time you're looking for it (because they are storing it for you). You have less wiggle room.
So, you can reduce your needs for space and other resources, like those folks living in tiny houses and riding their bikes everywhere. Or you can use your space and resources to stock up on things like Amy Dacyczyn, author of The Tightwad Gazette, who bought a large house with attached barn and stores all kinds of interesting things there. Or you can do some of both.
**
No blog buddy update: Yesterday after getting home from dance class, Robin asked if I would like to see a movie. Instead of saying no, I am writing in my journal, I said yes.
On the one hand, you've got stockpiling. This is the one I'm more familiar with where you stock up on things when they are on sale or you buy in bulk to get a lower price. I swear I wrote about this before, but I can't find it.
Advantages to stocking up:
* Very high rate of return. For example, if your favorite cheese is on sale for 10% less than the usual price, then you are earning 10% (actually, more like 11%) on your investment. And if you would have bought that extra package of cheese two weeks later, you earned that 11% in only two weeks, for an annual rate of 286%. If you buy a six-month's supply of cheese, you're still earning a 22% annual rate for the package you eat six months from now.
* Diversification. If you have cash flow problems or transportation problems, some of your future needs are already taken care of.
Risks involved in stocking up:
* The items can go bad (get stale, get attacked by moths, get ruined when there's a flood or blackout, etc.)
* You can change your mind about wanting them (you develop an allergy, you want to support something greener, you want something healthier, etc.)
On the other hand, you can simplify to reduce your overhead. I've talked before about Apartment Therapy's Smallest, Coolest Apartment contest and probably Tumbleweed houses (at least my commenters have). Recently I read No Impact Man's Who Needs Appliances Anyway? He talks about all their appliances and how much they missed each one when they stopped using it during their year-long quest to make no impact on the earth. Some of them they barely missed at all.
For a more extreme perspective, see Sharon Astyk's What To Do with Your Appliances When You Get Over Them. She posits that her kitchen is old-fashioned because it was designed in the olden days of cheap energy, and then she tries to imagine what a kitchen designed in the modern era of expensive energy, might look like. And then she talks about ways to re-use broken appliances. (My favorites are to turn your dead microwave into a solar oven or into a large breadbox.)
My favorite appliance is the refrigerator. So, for me, No Refrigerator for 30 Years seems quite extreme. I read a detective book where one of the detectives has no fridge, so she buys a bag of ice on the way home from work every day and keeps her refrigerable things in a cooler. This article has additional strategies, such as buying fresh food daily and using a higher ratio of pantry goods in your cooking. You could use these techniques to get rid of your extra freezer or to use a smaller refrigerator, not just to get rid of your refrigerator.
Advantages to simplifying:
* You can make permanent reductions in overhead. For example, if you don't have a lot of stuff, you can live somewhere small paying less in rent, electricity, even repairs.
* When you spend less time accumulating stuff, you can have more time for getting a life.
Risks:
* You have to rely more on others and/or be more flexible. You want the store to have just what you need every time you're looking for it (because they are storing it for you). You have less wiggle room.
So, you can reduce your needs for space and other resources, like those folks living in tiny houses and riding their bikes everywhere. Or you can use your space and resources to stock up on things like Amy Dacyczyn, author of The Tightwad Gazette, who bought a large house with attached barn and stores all kinds of interesting things there. Or you can do some of both.
**
No blog buddy update: Yesterday after getting home from dance class, Robin asked if I would like to see a movie. Instead of saying no, I am writing in my journal, I said yes.