Leaving Money on the Table…. On Purpose!

Posted by Madison on February 21, 2008

It’s not possible to do everything. In every area of life, we’re forced to prioritize and skip doing those things that fall at the bottom of our list. This includes financial strategies. I find that I’m eliminating more items each year, essentially leaving money on the table!

In balancing our life mix I showed how much time is devoted to various categories of my life. One of the categories is money which I currently devote 9% of my time to Household and Money. The bigger portion falls to running our household. As my free time is reduced, I have a smaller amount of time available for the money category.

Background

Frugal chick  left a great comment in guide to couponing which really got me thinking about this strategy:

Definitely stop couponing if you’re spending way too much time doing it. It’s probably better that you spend your time managing your credit card arbitrage plan (which makes my head spin) over coupons. Savings from coupons pale in comparison to the amount of money you could make with the Credit Card arbitrage.

She’s right! As there are more and more opportunities to explore various opportunities like asset allocation, mortgage optimization, sign-up bonuses and many others, I’ve found I just can’t do it all anymore!

Prioritizing

As I determine which things to cut out and which things to pursue, I’m trying to determine those that provide the greatest return for the least amount of time and difficulty. The formula would look something like this:

Time Formula

I haven’t quite figured out how the factors or the scale works yet. I do know that the closer the number is to zero, the higher it will fall on my priority list.

For example, our credit card arbitrage earns a substantial amount of money with a medium level of time and difficulty. If I compare that to shopping around to find the absolute cheapest place to buy soap the arbitrage will likely come out on top. While I would love to still do every single one of these, it just isn’t possible.

Results

Here’s some of the things I used to do, but I don’t do anymore:

  • Finding one penny when the bank account is off. If an account was off by even a penny, I would spend hours searching to figure out where the error occurred. Now I will just let the penny slide.
  • Reconciling every gas receipt. We use a card similar to the Discover Open Road card for all our gas purchases to earn 5% cashback. I used to take all the receipts and cross-check them to the bill. However after doing this for 10 years, and never finding an error, I’ve just started to assume they are correct. This one is dangerous and makes me pretty nervous. I do still check the total for the month for reasonability.
  • Extreme couponing. As mentioned before I still use coupons, just not to the extreme anymore.
  • Sign up for every single bonus offer. Now I pick and choose. Recent ones I have taken advantage of are Prosper and Lending Club, which I’ll write more about later. Other bonus offers I have bypassed.
  • Track our cash. I mentioned that we use a cash allowance system for many of our purchases. I used to write down each and every purchase and tried to have my husband do the same. We’ve now found that we can stay within our allowance most months and are pretty comfortable with the cash system. We no longer write down each and every purchase.

While I have given up these strategies in favor of more profitable ones, I still think many of them are good ones. If you have the time and they are profitable choices they should be considered, especially if the returns are larger than other earning opportunities that are available to choose from.

Action Plan
Like everything, the strategies change and evolve over time as different ones move up and down on my importance scale. For now, I’m trying to identify those activities that produce the greatest return for the littlest effort to do in my limited amount of time. The hardest part? Accepting that I can’t do everything and leave some of the money on the table!

What things have you purposely given up?





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Comments to Leaving Money on the Table…. On Purpose!

  1. Thanks , great to read your article,

    Tracy Ho
    wisdomgettingloaded

    tracy Ho

  2. I have stopped doing most survey sites. I was making something like 50 cents an hour and that was only if I could cash in my points for some trinket I didn’t want. I only do pinecone now.

    I still coupon but only because my Grandma gets the paper so I can do it for free. I am down to using about two coupons a trip where at my max I could get about 9 in. But I found I would rather buy what I wanted than what was on coupon special. I got more value for my dollars. Plus loss leaders in grocery ads save me more than coupons ever did. I use coupons.com and typically internet coupons are the ones I cash in 75% of the time.

    There are a lot of generics I don’t buy anymore because they caused way too much aggravation like leaking garbage bags.

    I stopped visiting multiple stores to save a little because I found out in mass I was spending too much.

    I set a limit for how much I can spend in a timeframe, usually a week. I don’t get too worried about what I spent it on I just don’t permit myself to go higher than this. I have found I am doing the best with this method. Although sometimes for half the week its a beans and rice menu. As I get better these belt tightening measures are less necessary.

    Marie

  3. We’re looking around for another credit card for gas purchases; one that offers more than the 1% cashback that we now have. Thus, your link to the Discover Open Road card caught my eye. When I looked at the fine print for this card, it said 5% on the first $100 of gas/automotive expenses per month or $1200 /year. So, it would mean $4 more in our pocket each month!

    I know you said you use a card similar to this one. Is it any better in the cashback terms?

    KarenM in NC

    Karen Moeller

  4. @ Marie: That’s a great list of things you have cut out. I also stopped going to a bunch of stores and focus on the loss leaders at just one store now. I wish my local store accepted internet coupons.

    @ Karen: Our gas card doesn’t have the $100 limit per month, but it’s not available anymore. I’ll do some searching and see if I can’t find some better ones for you.

    Madison

  5. I’ve given up saving “stuff” for yard sales – it’s just not worth the time – I’d rather just give it away and be done with it.

    Mike

    Four Pillars

  6. @ Mike: Same here! I used to try to sell some stuff on eBay, now it all just goes to Goodwill. Much quicker and I deduct it.

    Madison

  7. For many years I reduced my grocery bill with coupons, but I too found that the time spent, clipping coupons, organizing them and then remembering to use them before the expiration date, was too high a price to pay. I will still use the odd coupon for fruits, vegetables, meats and of course ice-cream – and also coupons for stores like Central Market.

    Radford Emerson Personal Finance

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