I wear disposable contact and realized that I need more last week. I have been buying contacts from 1800Contacts.com for a while and it was time to check on prices to see if I was still getting a great deal.
I will tell you how I cut my annual contact cost 40% in a few weeks. First I want to take a few posts to introduce some general rules about saving money.
Josh’s Rule #1: Know your savings threshold.
Saving money takes time; and time, as they say, is money.
You need to know what your savings threshhold is. This value will help you understand how much of your free time you are wiling to spend to save how much money. There is always a better deal out there, so the question you need to answer is how much time are you going to spend to find that better deal?
A good rule of thumb is to ask yourself how much money would you have to make to work another hour. So if your boss said put in another hour and I will pay you x dollars, what would x need to be for you to take your boss up on the offer.
One thing to keep in mind is that whatever value you just came up with is in pre-tax dollars - and cost savings are post-tax dollars. So you actually need to discount that hourly rate by around 20% (or more depending on your tax bracket). For example, if you would need to make $25 to work another hour, your post-tax savings threshhold is $20.
Now that we know your savings threshold, we know that for every hour that you spend trying to save money, you need to be saving at least $20, or you are wasting your precious free time.
If you spend two hours driving to a store to check for a lower price, you better be pretty sure that the item might be $40 cheaper than what you already have found. Luckily with the internet, most price checking is relatively fast - and we will learn some strategies for pricing things out in a later posts.
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