How to Save Money: Spend It

Saturday, November 29, 2014

I saw this receipt and was astounded! The local Target has discovered a new way for people to save money - by spending it. Historically, folks have mistakenly believed that investment was the means to riches, but all this time the answer was right in front of us: consumption! That's the ticket.

In case my sarcasm went undetected, this line of thought is, quite frankly, absurd. If I were to decide that the "normal" price of a good is too high, and decide to only purchase it only if the price is reduced, have I really saved any money? If the "normal" price of a bag of Doritos were $100, but I were to purchase it for $3, have I really saved $97? Of course not.

Spending less than I might have is not a form of savings. Yet, we see such logic quite often. You did know, for instance, that when politicians speak of saving money in government departments, they do not mean when you think. Rather than cutting the actual amount spent, they often mean that they intend to spend more than the previous year, but less than projections had predicted.

When someone speaks of spending my way toward savings, my first reaction is always to check my wallet.

If you want a better understanding of how spending is perceived by real customers, you owe it to yourself to check out my book on how to price software. You won't just save money, you'll learn how to earn it.