Hi everyone, today I have a guest post from Richard from FrugalityMagazine.com. If you would like to guest post here, please drop me a line.
Why do some people buy bags of pre-chopped vegetables from the supermarket when chopping them yourself at home is so easy? Why will people pay twice the normal price for a sandwich when bought at a service station rather than a supermarket or a sandwich bar?
The answer, of course, is “convenience”.
They’ll happily pay over the odds for a product that will save them a little time or effort later on. But if you want to learn how to save money on everyday purchases, one of the biggest lessons to learn is try and avoid the “convenience fee” added onto a variety of products.
The funny thing of course is that generally this convenience fee is an illusion. Yes, I might shave 5 minutes off my journey time by buying a snack from the closest shop to me but I’m paying over the odds for it. Yes, I might save 2 minutes chopping up my onions for dinner but in exchange I’ll have to work more hours to pay for that premium.
There’s always a balancing act at play here. You pay the convenience premium to try and make your life easier – but the fact that you’re spending more money on that fee means you either need to work more to pay for your lifestyle of easy convenience *or* you have less money to invest in other aspects of your life – such as trying to achieve financial independence so you can retire early.
And given the option of financial freedom and early retirement on the one hand, or pre-chopped salad on the other I know which looks like a wiser investment over the long term! Ask yourself whether you’re really willing to delay your retirement just so you can save yourself 2 minutes today?
How To Avoid The Convenience Fee
So if we can agree that in general the convenience fee is a bad idea, what can we do to try and avoid it, thus saving money that we can spend on things that have a far greater positive impact on our lifestyle?
I’ll be the first to admit that many of us rely on our cars for our everyday lives. Whether that’s getting to and from work or whether it’s bringing home a week’s groceries, in many areas life without a car can be tough.
But I’d also argue that many of us make unnecessary journeys where walking or cycling would not only be healthier but almost as quick. It’s just the convenience of cars that makes us use them more than necessary.
So get out of your comfort zone and try leaving your car behind for little local trips. Try it for a few weeks and watch just how much healthier you are thanks to the additional exercise and how much money you’re saving on gas.
One common pattern is that people that don’t plan ahead often pay for it in terms of an additional charge. For example booking your vacation months in advance can offer all sorts of discounts. Buying food at a tourist destination rather than taking your own can spiral your food costs. Waiting till the very last minute to replace your old work shoes; only to find there aren’t any sales on, also forces you to pay more than necessary.
So think ahead – weeks or months in advance – and consider *what* you’ll be spending money on and *how* you can get a better deal.
Make Your Own Lunches
At least here in the UK, eating out is ridiculously expensive in comparison to home-cooked food. I can buy a tin of premium soup for £1 or so in a supermarket or pay five times that (or more) for essentially the same thing in a cafe.
Now I’m not specifically against eating in cafes; it can be a very nice experience as a treat once in a while. But for many people “eating out” – whether that’s in a restaurant or just buying a sandwich while you’re out and about – can significantly bloat your food budget.
We now plan ahead, buying good value food from our local supermarket and take it with us. And we don’t go for the cheapest options from the food store; we eat like royalty while we’re out, without the premium price tag!
Ready meals. Pre-made lasagne. Pre-cut potato wedges. Coffee with the whitener already added. Supermarkets are always looking for ways to make our lives “easier” so they can charge us more. But it’s not just supermarkets that do this. Furniture comes pre-assembled. The store that sells that expensive car oil will fill it up for you. And so the list goes on.
Wherever possible then, try to avoid anything “pre-made” for you. Be willing to put just a little bit of effort in to avoid the convenience fee and over time these savings will really start to add up.
Turn The “Effort” Into “Fun”
But what about all this effort that we’re trying to avoid? That we’re willing to pay extra for? Remember that you’ll pay for it one way or another. Either you’ll pay more money to have someone else save you the hassle or you’ll do it yourself and pay with your time/energy. So why not try to enjoy the process? Turn the “hassle” into a good thing. Learn how to cook with basic ingredients and savor the process of building a delicious meal from scratch.
Sit back and admire the bookcase you just put together yourself (and, if you’re a guy, enjoy the bonus “man points” for such activities 😉
Create the most delicious, luxurious picnic possible before heading out for the day with your family, knowing you’ll be eating better than anyone else there and you *still* saved money.
Try to manage your attitude and turn the effort required to save money into a satisfying and enjoyable experience.
Learn New Skills
Even better, to save even more money try teaching yourself new skills. I recently mentioned how I managed to repair my own toilet and saved myself a hefty sum of money for a few hours of work. How? YouTube. Literally. You’ll be amazed at the new skills you can pick up if you hunt around on the internet and how much money you can save yourself as a result.
Even better, not only can learning new skills be an enjoyable and satisfying experience, but you’re also investing in your future because every additional, practical skill you pick up is another money-saving opportunity in the future.
Is The Convenience Fee Ever Worth It?
In closing I’d like to ask the question as to whether the convenience fee mentioned is ever worth it? Should we always try to avoid it or are there cases where it’s reasonable?
This, I fear, is a personal matter. Each of us has our own attitude about “value” – what we’re willing to pay for and what we’re not.
For example I pay a little surcharge to receive reptile food through the mail. Why? Because I’m out at work so much that I struggle to get to the reptile store each week. Additionally, the quality of the supplier I use is better than my local store so I actually get better value that way.
Each of us must make our own decision about where we’re willing to pay for the convenience fee. The important thing is to be aware of it’s existence and open to ideas that might eliminate the need for us to pay it.
What “convenience fees” annoy you and how do you avoid them? Where are you *willing* to pay this premium? Pleas leave your thoughts in the comments section below…