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October 22, 2006

Know what it is worth



When we go to the store or when we pay for a service it is extremely important to know the worth of an item. Sometimes we may find ourselves being fooled by 3/$5 offers that make us say “Wow! This is a great price!” But is it? Often I find myself at the grocery store and see a sale and think that because it is on sale that it is in fact a good price. However, many times I check the regular price and find that the item is on sale for only a few cents cheaper. While I do agree that any savings is good, there are times when “savings” actually get you to spend more. I cannot even begin to count the number of times I have heard someone say “It’s on sale, I’ll get two,” when perhaps they only needed one in the first place.

The concept of a sale after all, should imply that there is an actual savings to be made but frequently that is not the case. If it were, then stores would not dare to put things on sale as often as they do. If you think about it, stores use sales to lure customers to either buy more of a product than they otherwise would or to come into the store to buy the sale item and end up buying a regular priced product in the process. At the end of a season or if an expiration date is looming, often times a store will put something on sale to clear it off of the shelves but even in that circumstance the store is doing it for their own benefit. If they can get rid of a pair of shorts in September and make room for winter coats that are easier to sell and that people are willing to pay a higher price for, than it is in their own good. Therefore, don’t make assumptions about a sale, just because the store says it will save you money doesn’t mean it will. After all, they have something to gain by making you think that it will.

            Another way in which knowing the value of things is important is with services. This is perhaps a bit harder but can be very beneficial in the long run. One example of this would be paying for a babysitter. It is necessary to find out what other people are paying theirs. Don’t ask your sister in Fort Wayne, Indiana or your friend in downtown New York City but your neighbors. Knowing the going rate for a service can help you both to not overpay but not to underpay as well. Most people realize that overpaying can cost you but I think that underpaying is important too. When I was finishing high school I was asked to baby-sit for two different families in one week. The first one paid me $4 an hour and the second paid me $10. After talking to my friends and finding the going rate for a babysitter (in 2003) was between $8-12 I was surprised that the first family thought that they could pay so low. I wondered how many other people would be willing to baby-sit for them and even though I don’t know for sure I can guess that they didn’t have many repeat babysitters.  In the long run this will probably cost them more time and more money because the only time I was there they had to spend a little bit of time explaining to me how things worked, what time bedtime was, where the food was, everything. Over time, those 15-20 minutes per babysitter can really add up. Besides that, as much as some people may think, there is a limited supply of reliable and responsible sitters.


 

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