Monday, May 18, 2009

Is It Really A Deal?

When is a good deal really a good deal? Is something a good deal just because you can get it for nearly free? What if it’s something you may not even use?

I asked myself this question just this morning. I was at Target yesterday stocking up on groceries and other household items. Before heading to Target, I logged onto Attention Target Shoppers to get the lowdown on the best Target deals for the week. Then I logged onto A Full Cup to print out some of the Target store coupons for items I was planning to buy. There were also a few manufacturers’ coupons that I clipped out of my recent Sunday inserts to take along. I had everything organized in an envelope, and I went about my shopping until I reached the paper products aisle. It was then that I realized I had forgotten to clip the $2 Chinet coupon from the 5/3 Smart Source insert. I had read online that the 7” Chinet plates were on sale this week for $2.49. With the $2 off coupon, they would be just $0.49. That’s a pretty good deal. BUT…did I really need them? We rarely even use paper plates in our household.

Sometimes the thrill of finding a good deal overpowers the logic behind whether it truly is a deal at all. Would I have found a better use for the $0.49? Maybe. Maybe not. If I would invest the $0.49 for 13 years at 6%, I’d have double the original value ($1.07 to be exact) to use towards Junior D’s college education. Sure, that’s still just pocket change. BUT…on a bigger scale, if you look at $0.49 here and $0.49 there, over time, this could make an impact. Saving $0.49 a day at 6% would compound to just under $3,500 in 13 years. That would buy a few textbooks. And, if I chose not to use it for college, and instead, let it continue to compound for another 13 years, without even making any further contributions, I’d have just over $7,500.

The compounding may seem a bit extreme, but the point is that it pays to think about whether something really is a deal or not as well as the opportunity cost of the money spent on the deal. What may be a deal to some, may not necessarily be a deal to you. Although I was instantly disappointed when I realized I had forgotten the $2 coupon at home, after a day to reflect on it, maybe it wasn’t so bad after all. And who knows, maybe by leaving one extra package of paper plates on the shelf, I made the day of someone else who had the $2 coupon and had a good use for them.

Your Turn: How do you define “a good deal?” Leave a comment to share your thoughts.

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