CFI Blog

There Are Times When Saving a Dollar Isn’t Worth It

“A lot of people have great ideas, but nothing in the world is cheaper than a good idea with no action.”

I have always been on the search for a way to save a dollar. When I was in high school, I’d drive an hour to go to the only consignment store in our county to purchase Guess jeans (did I just date myself?) for $10. I was the type of person who would walk through the grocery store and only eat samples just to get a free meal. When my wife and I were first married, we had many meals of Chicken Voila! I don’t put an exclamation point there because it was so exciting. That was the name of the brand: Chicken Voila!

Even though we can now afford to loosen up the purse strings and live a little, I oftentimes just can’t shake that frugal feeling. That’s not necessarily a bad thing; there’s no point in spending money needlessly on things that don’t really matter to me. However, there are times when it makes sense to actually spend a little money on something because going the cheap or free route winds up costing so much more in the long run.

I’ll share an example of a very stupid money decision I recently made.

Four months ago, I injured my knee running with my dog. My primary care physician told me that he would need a MRI to see what had truly happened with my knee and how badly I’d injured it. We’d recently had to get an MRI for my wife and I knew that the co-payment for a MRI was $340.00. Being mentally cheap, I figured I’d be better off going to the VA hospital to get a MRI, since it would be free for me given my disabled veteran status.

It took 51 days for me to get my MRI. The VA hospital was supposed to mail my results to my primary care physician within 5 business days. The MRI CD never arrived. So, I had to go to the VA hospital, fill out a form, and then wait another week to get another copy of the MRI, which I then picked up and hand-carried to my doctor. As a result, I had to wait another 20 days between getting my MRI and actually having my doctor look at the results.

14 days later, I was being wheeled out of surgery and into the recovery room.

When my wife had her MRI, through a private hospital, it took less than a week from the time her primary care physician saw her and ordered the MRI until the results were ready.

Because I was being cheap, I needlessly extended my discomfort and pain by 9 weeks. All to save $340, which we had already set aside for medical expenses, since we budget for irregular expenses.

Did we do anything with that $340? No. It still sits in our side account, earmarked for medical expenses which might arise in the future.

For those of you who are curious about how much arthroscopic knee surgery in Fort Worth, Texas costs, I’ll run down the numbers. We have an excellent healthcare insurance policy provided by my wife’s employer, so your mileage may vary. I’ll include the MRI cost, since most of you don’t qualify for the free MRI from the VA, and, if I had it to do over again, I’d have gone with a private provider.

    • Initial doctor’s visit: $20 co-pay
    • Naproxen prescription: $10 co-pay
    • Follow-up doctor’s visit: $20 co-pay
    • MRI: $340 co-pay
    • Doctor’s visit: $20 co-pay
    • Pre-surgery consultation: $20 co-pay
    • Surgery: $150 co-pay (it would have cost $5,885.50 rack rate)
    • Vicodin prescription (wasted, as I never used or needed it): $10 co-pay
    • 4 ice bags for ice pump: $10
    • Total out-of-pocket cost for surgery and recovery: $580.00

From what I recall of my wife’s MRI, the rack rate cost was about $3,000. So, if we had a high deductible healthcare plan, we would have probably already hit our deductible for the year.

As it was, we spent $240, since I traded 9 weeks of discomfort to save $340.

That was not a wise financial move. $340 is well worth 9 weeks of comfort. For those of you playing along, that’s $37.78 per week, or $5.40 per day. That’s a cheap price for being able to walk normally.

Don’t make the same “dollar saving” mistake I did. I was only looking at dollars and cents. I wasn’t looking at the entire picture. Granted, I didn’t realize how glacially slow the VA system was, but once I went through the process and saw that it would take over a month just to get an appointment, I should have, at that point, made a decision to pony up the cash and get a MRI at a private care provider. Instead, I let Monkey Brain tether me to the sunk cost fallacy, even though it was a sunk cost of time. I’d already put in a lot of effort to get the procedure scheduled, and I didn’t want to put in more time (and then money) to change the path.

Time is a precious and finite commodity. There are appropriate tradeoffs of time for money, where you do things for yourself rather than spending money to have them done because you can save the money.

Nine weeks for $340 isn’t one of those.

This is the entire purpose of earning an income, saving money, investing it, being wise, and creating additional, and hopefully passive, streams of income – so you can make these tradeoffs. It’s a lesson to remember. You can work hard to get “there” and get to a point where you’re not having to scrimp and save for every last penny. However, once you do get there, don’t forget that you’ve actually made it and adjust your lifestyle (and your spending habits accordingly). That’s not to say that you should jack up the hedonic treadmill to the top speed, but, rather…

It’s OK to spend Dollars when you have it.

Have you ever tried to save money only to regret the decision later? Tell us about your experiences in the comments below!

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John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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