A Penny Saved is Worth More Than a Penny Earned

Posted February 9, 2009 by Bernz

When I was young, my grandmother’s favorite saying was, “A penny saved is a penny earned.” At that age, money was an odd, far-away concept for me so I really didn’t understand what that meant until I was older. The old aphorism simply means that money we save is less money that we have to go out and make. It seems like a very simple truth, but, in fact, a penny saved is worth far more than a penny earned.

Consider this example. You make $10 per hour at your job. You have two choices: you can work an extra hour to make an extra $10 or you can save $10 on your grocery bill by cutting coupons for an hour. Each choice takes an hour of your time so, at first glance, they appear to be equal choices. But they are certainly not.

As you are most likely painfully aware, you do not get to go home with the $10 you made at your job. Federal, state, and social security taxes are taken right off the top before you even get your check. Then, in order to be able to go to your job every day, you need gas and repair money for the car, work clothes, and the extra time it takes you to get to and from your job for which you don’t get paid. By the time you make it through your front door with your wages, that $10 looks more like $5-$6.

However, the $10 you save on groceries really is $10. Saved money does not get taxed and you can do it at home in your pajamas. And the best part is that saving money frequently takes less stress and effort than earning it.

Set aside some time every week to plan how you are going to save some money in your family budget. It may be as simple as changing your long-distance plan or car-pooling with your neighbor to the grocery store. You will find that it is well-worth your time (and Uncle Sam can’t take it away from you).


More On This Topic:

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Bartering Away the Recession
Stupid Spending Test
Stupid Spending Test

One Response to “A Penny Saved is Worth More Than a Penny Earned”

  1. the weakonomist Says:
    February 11th, 2009 at 8:30 am

    I must admit that even when I write about saving money or working more I ignore the taxes involved, and you never should ignore them.

    In actuality, in your example one must work closer to 1.5 hours to save the same amount of money that one hour of coupon clipping would do.

    To most I would say though, just strive to make more per hour.

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