Frugality is Hard to Afford
Free Coupons, Printable Coupons, Grocery Coupons Online

FreeCoupons.com - Still Couponing and Saving Money Year In and Year Out!



Frugality is Hard to Afford

Posted on Monday, July 4th, 2016 at 7:00 am
Pin It


A working paper found that high-income families can afford to use saving techniques (such as buying in bulk) that low-income families cannot.One of the most common pieces of advice about how to save money is to buy things in bulk. That might work out well for individuals or families who are already doing ok financially. That being said, the ability to buy in bulk is not easily accessible for people who truly are in poverty.

Buying in Bulk is Expensive

The reason why people buy in bulk is because it can save them some money. Buy one product, all by itself, and it costs a certain price. When items are sold in bulk, it causes each individual item in the bulk purchase to cost less than it would if you were to buy those items individually off the shelf.

A working paper documented that households that are less likely to use cost-saving strategies (such as buying in bulk) are the low-income families who would have a greater incentive to save money than a well-to-do family would. That may seem counterintuitive, unless you understand what it is like to be extremely poor.

More specifically, the paper found that high-income households, (that make $100,000 or more a year), bought their toilet paper on sale 39% of the time. Low income households, (those making $20,000 or less a year), only did that about 28% of the time.

High-income households were more likely to buy more rolls of toilet paper at a time than were low-income households. That meant the high-income households not only saved money on the cost of toilet paper, but also did not have to make as many trips to the store. They were able to reduce the amount of gas they spent driving to and from the store because they bought in bulk.

Let’s say a roll of toilet paper costs $2.00. A bulk package of 12 rolls of the same brand of toilet paper is not going to cost $24.00. Instead, it might cost $10.00.

A person who has the up-front cost of the bulk product available will buy it knowing that he or she will save money. But, the person who only has $2.00 until their next paycheck can’t afford to buy the bulk sized product – even though doing so would result in greater savings over time. That person probably cannot wait for a sale to appear before they purchase another roll of toilet paper.

The key point to get from what the working paper revealed is that people who are poor aren’t able to use the same techniques to save money as are people who have a higher income. Saving money by purchasing items in bulk could mean you are a savvy shopper. It also means you are starting out with more money than the people who can’t afford to buy bulk packages of toilet paper.

Leave a Reply

Your email address will not be published.


 

Good Tip: Saving money is important – especially if you have a lot of expenses like bills to pay, loans to pay off, and all the other things that drain your bank account. Figuring out a way to save money can feel tedious to some, and like a punishment to others. U.S. News suggests that you try one of these money saving challenges. The “No Eating Out for a Month” Challenge This one is self-explanatory. The goal is to avoid eating out for an entire month. This might be super easy for people who enjoy making meals at home. People who really enjoy dining out, or ordering food to be sent to their home, may struggle with this one. It’s worth a try because spending money on take-out is more expensive than buying groceries. The Pantry Challenge This one is a variation of the “No Eating Out for a Month” challenge. The goal is to use up all of your groceries before you buy more. It forces you to try and remember why you bought a food or beverage that you don’t know what to do with, and gives you the opportunity to find a way to use it. The one exemption to this challenge is the foods that have expired. Don’t eat them! Throw them in the trash. The “No Spend” Challenge Make a goal to avoid spending money during an entire weekend. The only exemption in this challenge is that you are allowed to pay bills. This challenge is interesting because it requires creativity. You must be creative and find workarounds for problems that you would typically solve by spending money. You may have a different outlook on spending after finishing this challenge.