One Dollar NOT Spent is Worth Two Kept

I wanted to talk about a concept that I think few people really think about. And that is what it means to spend money as opposed to the decision to not spend it and keep it instead. Cost cutting can double your money.

Take a simple dollar amount, lets say that you have $100 that you've earned and it's in the bank and this is your normal threshold in the bank. And lets also say that you see something that you want or have a service you want to pay for, be it gas, hair cut, Netflix, whatever... And, lets say that the cost is $20. So you pay for your service or item and you now have $80 left. To replenish your bank account to $100 you then earn another $20 and put it into the bank. Back to normal, right? Or is it...

In this scenario, most would say that you had spent $20 and then replaced it, and that service or item only cost you $20. But I would say that it really cost you $40, because had you not spent that money you would be $40 ahead now.

Think about it, you had to go out and earned an additional $20, and if you add that to what you spent for the service... that's $40. So the real change in cost to you is $40. Had you NOT spent the money you would have $120 right now in the bank instead of just $100.

I know that it's subtle, but it makes a really big difference, especially when compounded over time.

Take a simple haircut. Lets say that a haircut cost you $20 every month. And that included tax and tip. Yeah, it's a pretty reasonable price for a haircut by today's standards, and you're really letting your hair get out of hand. But for the example that haircut costs you $240 a year, not to mention the time and gas to go to the barber shop.

What if you could find a way to cut your own hair and not spend the $240/yr. What if you bought a Flowbee and or a pair of clippers and cut your hair yourself? You will save $240 a year after paying off the tools to do the cutting. And $240 will easily take care of the cost of that equipment. Now, if you continue to do this yourself for 10 years you will have saved $2400.

However, according to the, "One Dollar NOT Spent is Worth Two Kept" rule, you will have actually saved a cost of 2 times that amount... you will be $4800 ahead of where you would have been had you not spent that money on a haircut.

It's a great money saving idea, I know because I've been doing it for nearly 15 years. Not only have I been cutting my own hair but I've been cutting my son's. And thinking of actual costs, I estimate that I'm over $10K ahead of where I would be if I hadn't done it. I know that its not a realistic option for women, but it certainly is for men.

This is only one small area of your life where you could save money. I have lots of articles here for saving money, and remember that "One Dollar NOT Spent is Worth Two Kept!"