5 Cents Saved is less than 5 Cents Spent?

I was reading an article the other day that discussed how grocery stores are increasingly getting rid of plastic bags and offering a 5 cent refund for every reusable bag that a customer uses.  In this article, they mentioned that research has shown people are more likely to use their own bags if they are charged for a bag rather than if they get a discount off their total bill for every bag they use.

Of course, this isn’t taking into account that I can replace five plastic bags with one reusable bag.  This research is a 1 to 1 ratio.

This doesn’t make sense to me, and yet when I think about it, I think I follow the research.  Somehow, saving 5 cents might not be worth it, but knowing that I will be charged an extra 5 cents?  No way.  I know that it doesn’t make any sense.

So that said, I would prefer a 5 cent charge.  Ikea currently does something like this (I don’t remember the actual cost of the bag), but I will do all it takes to shove my items into my reusable bag rather than buy an extra bag.  My grocery store offers a 5 cent discount.  Of course, I use self-checkout, so there’s no one there to enter my discount, so I don’t get my money back for the bags I bring.  It doesn’t bother me, I don’t use my bags for the discount – I use them to be environmentally responsible, but probably more importantly, I use them because they’re easier to carry, since I walk to and from the grocery store.

But I’ve gotten off track.  I think it’s important to figure out why having to spend an extra 5 cents seems harder than not saving 5 cents.  It’s the same amount of money!  I wonder if people would spend and save differently if 5 cents always equaled 5 cents in their minds.

Megan Smith

Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.