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Savings per minute: What's your time worth?

Looking to save money fast? Survey shows where the big savings are: Car insurance and cellphones.

By QuinStreet Jul 14, 2014 2:09PM

This post comes from Donna Freedman at partner site Insurance.com.


Insurance.com on MSN MoneyWhen someone asks me how to take control of his finances, I don't advise that he bake his own bread.


Man holding stopwatch © Keith Leighton/Alamy
Yet those are the sorts of tips you tend to get when Googling "how to save money." You’ll save money, but probably not as much as you'd think. And you’ll find these tactics can take time away from everything else you need or want to do.


I suggest instead that people think first about the big-ticket items. Results of a new survey from Insurance.com back me up.


The insurance comparison-shopping site asked 2,000 adults about how much time they spent on five big purchases and how much they saved, then ranked their potential bang for the buck. For example, the typical amount of time spent researching and shopping for a new car was 13.6 hours and the amount saved $1,054 – which works out to about $1.29 a minute.


Courtesy of Insurance.comCar insurance:

  • Average shopping time: 10 minutes
  • Average annual savings: $540
  • Savings per minute: $54
Cellphone plans:
  • Average shopping time: 97 minutes
  • Average annual savings: $179
  • Savings per minute: $1.86

Cable TV or other programming:

  • Average shopping time: 144 minutes
  • Average annual savings: $248
  • Savings per minute: $1.72

New cars:

  • Average shopping time: 13.6 hours
  • One-time savings: $1,054
  • Savings per minute: $1.29

Gasoline:

  • Average shopping, driving or wait time: 320 minutes
  • Average annual savings: $119
  • Savings per minute: 37 cents

Shopping for car insurance tops the list. Not only is the potential payoff highest at $540, the time invested is just 10 minutes. You can get a quote from just about any insurance company online or by phone in that time; Insurance.com lets you get quotes from many at once by using a single form.


Frankly, 10 minutes is less than you’d spend digging the bread machine out of the back of the cupboard. And if it turns out you’re already getting a great deal, you’ve only burned 10 minutes to discover that. Win.


'The best bang for the buck'

Your time has value. It may even have potential penalties. Suppose waiting in line for Costco gasoline makes you 10 minutes late getting to the child care center. There's probably a fine attached to late pickup, to say nothing of the frustration of watching the clock (and the traffic) while waiting to fill up.


Sure, Costco or Safeway gas can be up to 15 cents cheaper per gallon. But you could also download a free gas app and get the next-best deal. Even if you don't have to worry about day-care fines, ask yourself this: "What's the best use of my time when it comes to saving money?"


"Everyone wants the best bang for the buck. We went looking for the best payoff for your time," says Des Toups, the site's managing editor.


They also went looking to see how much time shoppers were willing to put into looking for a better price on a range of goods. The winners? Pretty much anything easily comparable online – like airfares, laptops and car insurance.


Here’s how much time, on average, 2,000 adults surveyed were willing to put into shopping for a better price on:

  • Airfare: 68 minutes
  • Laptop computer: 68 minutes
  • Auto insurance: 63 minutes
  • Hotel rooms: 53 minutes
  • Rental car: 48 minutes
  • Clothing: 41 minutes
  • Children’s toys: 36 minutes
  • Prescription drugs: 34 minutes
  • Groceries: 33 minutes
  • Pet food: 26 minutes
  • Beer or alcohol:17 minutes
  • Cigarettes: 16 minutes

 The value is even greater when you think of short- and long-term values. Sure, it's nice to save $100 on a new flat-screen or a plane ticket home for the holidays. But those are one-time savings. Saving $540 a year on car insurance or $15 a month on a cellphone plan is a gift that keeps on giving.


Picking your spots

Note: Wanting to save money in every area of your life isn't necessarily a bad thing. I once did this as a survival tactic and now do it as part of a balanced budget. But I'm increasingly aware that some frugal hacks can create anxiety or a scarcity mentality.


For example, according to one blogger, homemade laundry soap cost 4 cents per load vs. 12 cents per load for Tide. But Tide goes on sale and coupons are regularly available, which is how I bought detergent as a broke midlife student.


More to the point, my partner and I do only about six loads of laundry per month. Do I want to go to the trouble of shopping for the ingredients and making the detergent to save $5.76 per year? (Hint: No.)


As a reformed penny-pincher, I beg you to pick your battles. Spending 10 minutes getting a car insurance quote or even 97 minutes comparing cellphone plans will likely save you more overall than clipping a cereal coupon or stopping by the bakery outlet. Those last two are perfectly fine strategies, but they shouldn't be the first (or only) ways to save money.


Full disclosure: I still clip coupons and shop at the "used bread" store. But these days I keep an eye on not just on the value but also the emotional impact of my frugal hacks.


I suggest you do the same. If you obsess over a missed sale or a forgotten coupon, or castigate your mate for forgetting to bring home that recyclable soda can, you need to take a look at your relationship with money. Is the hypervigilance worth the small savings?


Yes, a dollar is a lot of money if you're a buck short on this month's rent. Generally, though, if you mind your big-dollar savings then the penny-ante items will take care of themselves.


More from Insurance.com 

What coverage do drivers like you buy?

How to switch car insurance companies

Find cheaper car insurance in 8 easy steps


10Comments
Jul 14, 2014 4:31PM
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Funny how car insurance tops the list sponsored by insurance.com ... anyways, I Love these tips, but there are some more you should be aware of:
1) drop the smart phone and get a "dumb" one. Save about $50 per month. Get a low-priced tablet (e.g., Kindle Fire) or use your old iPhone as a wi-fi only device. Wi-fi is available everywhere; you really don't need to pay for cell-based data plans
2) call your car and home insurance company and tell them you want to go through all your coverage because you found another carrier that is cheaper. They'll probably help you "find" 10% off or more.
3) speaking of car insurance - An expensive policy from GEICO, Progressive, etc. is not needed. You can find one usually for less than $25/month from a place like Insurance Panda. If you spend too much on car insurance from one of those big companies, chances are you are simply funding their expensive TV ads with cute animals.
4) compare what your house is really worth to your assessment. Many assessments have never been properly adjusted down to reflect the market over the last 4 years. We cut our property taxes by about 20%.
5) re-fi your 30-year mortgage to a 15. The interest rate will drop by at least 50-75 bps, more depending on your current rate. The payment may go up slightly, but it is because you are paying off your loan faster. If it's possible, get the mortgage paid off before the kids go to college. At a minimum, have it paid off before you retire.
6) review your credit card bills for all the things you are paying $10-20 per month for that you no longer need. I bet everybody has at least a couple
7) drop all magazine (paper and on-line) subscriptions. If you look around, you can find comparable content for free.
8) review your investment portfolio for ways to replace higher fee mutual funds or ETFs with lower fee ones. S&P500 funds/ETFs shouldn't charge more than 0.10% in fees. Fees may be higher for specialty funds, but they are all coming down fast. If your company 401K uses high-fee funds, talk to the folks in charge. A difference of 25 bps in fees will mean a difference of about 5% in your portfolio value after 25 or 30 years.
9) and of course the most impactful -- never carry a balance on a credit card. If you can't resist, cut up the cards.
Jul 20, 2014 7:43AM
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  This my friends is all penny ante stuff, if you really want to save money then do this. Shop for a politician during the election season that thinks of America first. If you don't want something you should not need to buy it, if a country hates us then there is no need to send them money or soldiers to protect their freedom and fair trade should mean that we get jobs at home as well. Last make sure he or she is a Allie of the middle class and not the enemy. This simple before you vote research will save you money, the middle class and in the long run the country as well.    
Jul 20, 2014 2:52PM
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Be careful about saving on insurance policies. After bad storms, most of the sad stories of insurance companies not properly paying claims came from policies written by lesser known companies or from policies that were trimmed by the homeowner to "bare bones" to save a few dollars.
Jul 21, 2014 2:58AM
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Your Time when you think about it is more valuable than money

and it is shorter than we realize. Especially the older we get.

Pay yourself by putting something in the Health Bank. You can pay

now while its cheap or pay later when its really expensive.

Jul 20, 2014 10:20AM
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'Time keeps flowing like a river to the sea,till its gone forever,gone forevermore'.
                         -The Alan Parsons Project.
Jul 20, 2014 3:44AM
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another way to save...don't buy or don't use toilet paper...ain't nobody got time for that...
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