Saving (not spending) vs spending.....the real costs & savings

freemotion

Food Guru
Joined
Jan 1, 2009
Messages
10,817
Reaction score
90
Points
317
Location
Southwick, MA
OK, who is good at accounting type stuff and can give me some real math?

My way of thinking is this: If I save money (I don't mean savings account-type saving, I mean buying something for less or making my own-type savings), then I don't have to earn it first and pay taxes on it, so the savings are far more than they appear to be.

For example, being self-employed, I pay a bit more to Uncle Sam then when I was an employee. So in order to have $100 to spend, I have to earn......maybe?......$135. So if I save $100 on hay by cutting some of my own, I have really saved $135, and potentially lowered my tax bracket.

Make sense? Anything I'm missing here? Any reasoning to get the savings even higher?
 

patandchickens

Crazy Cat Lady
Joined
Jul 12, 2008
Messages
3,323
Reaction score
6
Points
163
Location
Ontario, Canada
I don't think there's one single right way of looking at it. There are different ways of looking at the accounting, depending on what you consider fixed and what your priorities are and what you're trying to make the numbers show ;)

Some people might agree with your example (especially if it *did* make a difference to your tax bracket, although of course most things won't); others might say that it depends on how much money you could have earned if you were doing something other than cutting that hay, and that you could still be taking a loss on it (compared to earning money and then paying for the hay)

Still others might say that money is not the only thing in life and monetary accounting will never capture all the pros and cons involved (risks involved in doing it yourself, rewards such as fitness and enjoyment involved in doing it yourself, future value in knowledge gained, etc etc etc)

I think you can argue it any way that makes you happy, and rest assured that you have a fairly sound argument for it :)

Pat
 

freemotion

Food Guru
Joined
Jan 1, 2009
Messages
10,817
Reaction score
90
Points
317
Location
Southwick, MA
It makes me happy!

All work and no play makes Jack a dull boy, anyways. Variety in one's work makes life so much more enjoyable.

So here goes some more: Psychotherapy: $200 per hour, weekly, or $2400 per summer. Scythe-o-therapy: $350 saved per summer!

Take-out for two every night: $20-30 per night, x 7= $175. Homemade meals for two every night: $3-5 per night, x 7= $28, or if half is homegrown or foraged, $14 per week.

Starbucks every day for two: $10 per day, $70 per week. Make your own refreshments at home: a penny to a dime per day each, or $0.14 to $1.40 per week.

Working at a job....:sick Making it yourself.....:weee
 

patandchickens

Crazy Cat Lady
Joined
Jul 12, 2008
Messages
3,323
Reaction score
6
Points
163
Location
Ontario, Canada
So clearly you have a form of accounting that works for you. Stick with it :)

My problem is that I've never been able to genuinely feel like I am "saving" things like the cost of eating out, health club membership, etc... I am avoiding *wasting* money on those things, yes, but I just can't quite wrap my mind around the idea that they are the baseline from which you determine savings. Any more than I am "saving" ten million dollars, plus probably a million or so a year, by not owning a chateau in the south of France :p

Thus there is a limit to how far that genre of creative accounting works for me. Fortunately, I have a powerful substitute in the form of Just Not Keeping Score At All <g>


Pat
 

freemotion

Food Guru
Joined
Jan 1, 2009
Messages
10,817
Reaction score
90
Points
317
Location
Southwick, MA
Right now work is S-L-O-W and I am doing more creative accounting to keep my spirits up!!!
 

me&thegals

A Major Squash & Pumpkin Lover
Joined
Jul 11, 2008
Messages
3,806
Reaction score
9
Points
163
Location
central WI
patandchickens said:
My problem is that I've never been able to genuinely feel like I am "saving" things like the cost of eating out, health club membership, etc... I am avoiding *wasting* money on those things, yes, but I just can't quite wrap my mind around the idea that they are the baseline from which you determine savings. Any more than I am "saving" ten million dollars, plus probably a million or so a year, by not owning a chateau in the south of France :p
Exactly. It would only work if you already had a lavish lifestyle. Once you've been doing it forever and ever, you are really no longer saving.

But, if you take behavior A and change it to behavior B (let's say from buying tomatoes at the farmer's market to growing your own), you really do have a good place for comparison.

Free--This is an interesting question. I also ask myself how much more $ I could be earning if I weren't drying mint, canning tomatoes, freezing peaches, etc. That's where I do like the credit card ad and think: Self satisfaction--Priceless.
 

me&thegals

A Major Squash & Pumpkin Lover
Joined
Jul 11, 2008
Messages
3,806
Reaction score
9
Points
163
Location
central WI
freemotion said:
Right now work is S-L-O-W and I am doing more creative accounting to keep my spirits up!!!
In a way, that's a time when this works even better since you cannot be using that time to actually earn $ anyway. Instead, you can focus on doing things that prevent future spending of $ and have something to feel great about!

Hope work picks up soon for you anyway...
 

modern_pioneer

Mountain Man
Joined
Feb 27, 2009
Messages
1,394
Reaction score
15
Points
192
Location
In the woods with the critters
freemotion said:
Right now work is S-L-O-W and I am doing more creative accounting to keep my spirits up!!!
I can put you in a position where you will be accountable for every product that leaves the shop, a QA officer. Its fast paced, and you can expect an ass chewing from either me or the customer, customers are often wrong.
 

Blackbird

Goat Whisperer
Joined
Mar 28, 2009
Messages
3,461
Reaction score
2
Points
154
Location
Many-snow-ta
modern_pioneer said:
freemotion said:
Right now work is S-L-O-W and I am doing more creative accounting to keep my spirits up!!!
I can put you in a position where you will be accountable for every product that leaves the shop, a QA officer. Its fast paced, and you can expect an ass chewing from either me or the customer, customers are often wrong.
Because that just sounds like a fantastic job.. Yippeeee...
 
Top