You never save money when you spend

I was sightseeing around San Francisco one very rainy day. It was 1990 and I wanted a CD player. I was also broke. CD players were still rather expensive. So I’d been shopping around for a while. I knew the prices, but they were just barely out of my reach. So I was biding my time, checking every electronics store I saw.

That day, as I wandered around downtown, I found a small shop at the base of a skyscraper. It had a window front on the street with electronics from top to bottom. Inside, it was packed. I’ve never seen so many electronics in such a small space. It felt like a sardine can of circuits, chrome and black plastic.

I made my way over to the CD players and found the exact portable CD player I wanted to buy.

In my research, I found that the player sold for $250. Some places down about $215. Others as much as $300. But $250 was the normal amount. My hope was that it might, just one day, drop to around $150.

So I picked up the player and turned it over to see the price. I nearly dropped it. The sticker said $1000 — a 400 percent markup compared to all other stores.

I looked over the player carefully, trying to see if there was an $800 feature I’d missed. Like diamond encrusted buttons or something. There wasn’t.

“Well somebody didn’t mark this correctly,” I said quietly.

A man yelled, “You calling me a liar!”

I jumped. The clerk behind the counter had quietly moved close while I was examining the player. He didn’t seem happy.

I said, “Well, a $1000 is too much for this player.”

“It’s a fair price!” he snapped. “That player is very special.”

“But a $1000 is too much, I’ve seen it for less ….” he cut me off.

“Maybe I could let it go for $600,” he offered.

Gee, he just gave me a 40 percent discount. I’d save $400! How kind.

Yeah, Right!

I set the player down and walked straight into the rain.

Six months later I bought that player from Service Merchandise in Arlington, Texas. I saved my money. Actually saved it in a bank. So I could afford to buy it. Then bought it for $150 when the price was finally right.

The point is that I didn’t save $850 compared to the $1000 price. I didn’t save $450 compared to the man’s 40 percent off deal. Nor did I save $100 compared to the standard price.

I paid $150 for a CD player.

You never save money when you spend

Whenever you buy something. It’s always money spent. Never saved. Yes, I know that diamond ring is advertised as 50 percent off. “Think of how much money you’ll save,” says the salesman.

Well, there is no magic fairy that gives me the money I save. It’s just money spent. It is an oxymoron when you think about it. Saving money while spending it. It just doesn’t work.

Saving money means taking money you have, in hand, and putting it somewhere safe for a future day. Like in a mattress or a savings account.

When I buy something, I’m spending money.

Someone might think I’m saying, “Getting a good deal is a bad thing?”

A good deal is always a good thing IF. If it’s something you need or is far more than an impulse buy. If you will actually use it. If you can buy it at a competitive price.

Everything has a reasonable, competitive price. Shoes, houses, computers, cars, TVs. The trick is to:

• understand the so-called street price for the item you are after
• know exactly how much money you can afford to spend on it
• be patient and willing to do without until you can afford it
• not be suckered by sales persons, brochures, shiny lights, showrooms
• and jump when the price is right

The real savings comes by spending only when absolutely necessary and keeping the rest of your money.