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Can you really save by spending?

Sometimes -- but many other times, 'You've got to spend money to make money' is merely a justification.

By Donna_Freedman Sep 6, 2012 12:36PM
Image: Paper airplane made of money (© Tetra Images/Corbis)In "10 ways to save money by spending more," writer Katie Little writes that certain purchases -- things like nice clothes, household help, vacations and power tools -- not only improve quality of life but could "even save you some cash."

Sometimes that makes sense. For example, in "Save by spending $5 more per week" I suggested using sales and coupons to build a stockpile of foods, toiletries and household items. That costs a little bit upfront but later on you'll save: fewer trips to the store, less temptation to eat out, no late-night runs to the mini-mart because you ran out of toilet paper.

As a rule, though? Telling someone to spend to save is like turning a middle-schooler loose at Best Buy with a credit card and a "Buy only what you need, OK?" When you see something you want, it can quickly morph into a need.

A certain amount of outlay is necessary in business or in your personal life. But the "spend to save" notion makes it a little too easy to justify getting anything you want. All you have to do is convince yourself that you're saving money by getting it.

A few object lessons

I've heard people refer to "investing" in clothing. Naturally you need to look presentable at work, and, if you pick the right items, they'll last for years. But clothes aren't an investment. They don't pay dividends or grow in value. You can't cash them in upon retirement (although they might bring a few bucks at a consignment shop).

What clothing does is cover you decently and convey an image ("business professional," "fashionista"). That's all. Calling it an investment makes it easy to convince yourself to buy more shares. (Post continues after video.)
One couple I know spent to save in the kitchen. They bought expensive pots and pans thinking it would make them want to cook at home. Had they been able to admit that they just don't want to cook, they'd have saved hundreds of dollars. For the amount of KP duty they put in, yard-sale or thrift-store pans would have done just fine.

What's the true cost?

Obviously it's your money and your call. But think critically about the cash you're delegating to recreational shopping, frequent meals out, unnecessary hardware or a dog-walking service.

What could that money do for you someplace else? Invested for the short or long term, say, or used to make extra payments on student loans or consumer debt?

Quality of life is important. But there are ways to keep the cost of that quality down: online discount codes, daily deal sites, thrift shops, consignment stores, cash-back shopping, grocery coupons and clothing swaps.

A little common sense helps, too. Yes, it's exciting to have your first house. But be honest with yourself: No one but you cares if a shelf isn't smothered in knickknacks, and the amount of tools you "need" tends to correspond to the square footage of pegboard you put up in your new garage.

More on MSN Money:

Sep 10, 2012 9:50AM
This whole economy of the United States is fatally structured. We have become a consumer society. If Americans save their money or invest it instead of blowing every penny it's because we lack confidence in the economy. Maybe we have smartened up want to save instead of spend. Every household in America including my own has stuff lying around we don't need but if we wake up and realize it we are scared or lost confidence. The whole economy needs to be restructured to reward saving not spending. So many people spend their entire life until they are 50+ to realize they have wasted perhaps as much as a million $$ over the last 30 years spending it on stuff they don't need and start scrambling to save or rid themselves of massive debt before a dollar can even be saved. Fortunately I was basically raised by my grandparents who knew the value of frugality and savings. Somehow my mother never followed the example but retired on a really good pension but lived pay check to pay check because of the credit card debt she built up after she retired but her pension was her only plan for retirement. When she passed a year ago she left 10's of thousands of debt and owned nothing because I was smart enough to have her sign over all her property and assets to me before she died so there was nothing no estate to go after to collect but who gives an 85 year old woman a $50,000 credit line. When I do get around to the sale of all the stuff she left in her house I should get $10,000. She is a very sad story of not preparing for retirement independently. Thanks to my grandfather who bought me 100 shares of Exxon (XOM) when I was born, which I still own, I learned to start investing early in my late teens when I started working and have for the last 30 years invested at least 10%of my earnings. I never missed it and now I'm 50 and my problem is where to put my investments to maximize earnings or minimize losses. The marketing and instant keep up with the Jones attitudes of this society has put us where we are today.
Sep 12, 2012 11:08AM
Back in like 1980 or 82, local Woolworth store closing. Bought 30 sets of 2 pillowcases, priced at about 2 dollars each. As late as 2011 still using them and some still in their plastic. When you find the cost of cases today, this has saved a bundle. I spend to get things on closeout - not just a "sale"- to save only when items are going to be needed over time, or can be useful gifts. I just bought two 6' zippers with sticky glue side panels meant to create doors in tarps, etc. I plan to use them to create a second access opening in the RV cover for new travel trailer. Covers with the 2 doorway access I need run about $150 more than 1 door access covers, so for under $10 I save big money not having to buy the fancier cover. I wish I had been able to buy more, but there was only 3 zippers left, but 2 is fabulous. I think always setting aside some extra money for finds you could save money on is a no brainer.
Sep 12, 2012 11:30AM
By the way, the comment about tools tending to be dictated by the amount of pegboard you have, is just rediculous. Anyone smart enough to learn how to fix much of the minor things that can go wrong in homeownership, such as plumbing, cracking ceilings and tiles, falling down decks, loose or missing shingles... will need tools that aren't all of the pegboard variety. Try hanging my chop saw, rip saw, trim saws, nailguns, etc., on pegboard. Tools like lawnmowers and weed wachers and snowblowers also are needed. Get them if you need them, and leave the stupid pegboard for those who don't know how to use a screwdriver. Get deep shelves, you will use them more.
Sep 6, 2012 4:34PM

Wow, Donna, have to give you some credit: you've got balls to contradict the very article that was republished by your publisher MSN Money. I wonder if you knew that.


My bottom line is this: saying many of those 10 things are investments is not really different than your typical investments: some might pay off, others might not, and some might just cost you money. Take clothes: it's possible that spending money on a nice suit might just get you a promotion a year earlier than expected, a nice payoff. On the other hand, you might just rip a massive hole in that suit a couple of days later and have thrown that money away.

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Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.


Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.