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Am I Saving Money - Or Just Wasting My Time?

by Sid Savara on October 8, 2008

1064586_time_is_money_21-120x150 photoFollowing the theme of time-management in previous posts about paying myself first with my time, saving 10 hours a week by outsourcing my cooking, and my experiment outsourcing via virtual assistants, I’ve been wondering whether some of the things I do to save money are really just wasting my time.  Specifically, I wondered about waiting in long lines for cheaper gas.

Why? I count all time spent pumping gas as wasted. Because of this, just like I optimize reading RSS feeds by reading as much at one sitting as possible,  I pump gas as infrequently as possible.  I like saving money as well, so I try to find the cheapest gas that fits in my schedule - there’s no point spending an hour driving across town to save 3 bucks.

I wondered though - if the lines are longer, is it worth it for how much I’m saving, or am I just wasting my time?  For the past couple months I have been noting how much longer it takes to fill up my tank at a cheaper gas station, and I decided to run the numbers and show you my results.

Before we get to that, here is my normal heuristic for filling up.

Sid’s Gas Fill Up Heuristic - in Pseudocode**

1024819_blackboard3-150x130 photo

  1. If (Tank is Empty OR Tank is Almost Empty) then: Fill Tank
    1. If (I Need to Shop at Costco) then: Fill Tank at Costco When I Go
      • // Costco is always 10-20% cheaper, but out of the way
    2. Otherwise: on my next trip, Fill Tank at Chevron Nearby
      • // The Chevron always has empty pumps - no time wasted waiting
      • // It is on the way to the freeway so I don’t lose time nor distance traveling
      • // There are very small differences in price for other nearby stations
      • // They have free air for your tires - a nice bonus.

** Pseudocode: An English-like representation of the logical steps it takes to solve a problem.  // denotes a comment, a piece of text that is not executed, and is there to explain a step.

Rising Gas Prices + Slower Economy = Longer Lines for Discounted Gas

739322_fuel_11-120x150 photoI filled up at Costco recently and noticed the lines have been getting longer. When I came up with my heuristic, the line at Costco was empty or one car deep. There was hardly any wait and cheaper gas prices made it a sure winner if I was already there.

As times have gotten harder in Hawaii and the price of gas has skyrocketed, though, more people are going to Costco to take advantage of their lower gas prices to save some money.  Is it still worth the extra time?  Further, Costco prices have risen about 5 cents over the past month, and the Chevron by my place has dropped about 12 cents (how is that?).  It was time to reconsider my decision.

Gas Prices Versus Extra Time

Experiment Background:

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  • For the past couple months, I have been tracking how long it has been taking me to get gas at Costco.
  • It has never taken me any extra time at Chevron, so there is no data to report there.
  • I have used a modal/median approach to calculate averages, so that the outlier case of waiting 30 minutes at the pump doesn’t throw off my math.

Here is what I found. Gas prices are based on current prices, and the gallons filled reflects my most recent trip to the pump.

Data and Calculations:

  • Costco Price: $3.849 per gallon = $3.73353 after Amex 3% off
  • Chevron price: $4.079 per gallon = $3.95663 after Amex 3% off
  • 12.72 gallons filled
  • At Costco: 15 Minutes of waiting to use the pump.  Best case: 12 minutes. Worst case: 30 minutes.
  • At Costco, Usually 0 Additional minutes spent waiting to exit, (3 out of 4 times no wait.  Worst case: 5 minutes)
  • $0.2231 difference in price per gallon
  • Total Savings at Costco:  $2.84 (12.72 gallons * $0.2231 per gallon)

Is It Worth The Time To Get Costco Gas?

1040137_justice_srb_21-150x139 photoLet’s assume that the only extra time is the time spent waiting in line.  Since I am paying with post-tax dollars, I will consider the amount of pre-tax dollars I need to earn for the difference in price as well. I’ll go with a marginal tax rate of about 30%.  For $2.84 saved per trip:

Average, Worst and Best Case Comparisons

  • In the average/expected case:
    • I spend an extra 15 minutes
    • I save about $11.35 per hour.
    • This is the equivalent of earning about $16 per hour.
  • In the worst case:
    • I spend an extra 35 minutes
    • I save about $4.86 an hour
    • This is the equivalent of earning about $7 an hour
  • In the best case I had:
    • I spent an extra 12 minutes.
    • I save about $14.20 an hour
    • This is the equivalent of earning about $20 an hour.

How about those with SUVs and Minivans?

SUVs and Minivans:

  • About 21 gallon tanks
  • They are likely saving as much as $4.69 per  fillup
  • This works out to saving about $18.74 per hour
  • This is the equivalent of earning about $25 an hour.

Depending on who you are, it may or may not be worth it.  In my case, I’ve decided with my car it isn’t a large enough savings (especially in the worst case!) for amount of time spent.

Other Areas I Wasn’t Saving Money - Just Wasting My Time

  • 1052434_shopping1-125x150 photoSunday “Deals”
    • I used to love reading the Sunday newspaper and looking for deals on electronics. One day I realized I hadn’t bought anything from them in about 4 months, but I was still wasting 30-45 minutes on the weekend perusing the ads.  I’d been fooling myself: telling myself I was trying to save money, when really I was just enjoying looking at gadgets.  I cut it out completely, and put that extra saved time directly into my weekend workout.
    • Additional Bonus: Ignorance is bliss - not knowing what is on sale means I am no longer tempted to buy things that I don’t really need.
  • Bargain Bin Book Shopping
    • 014303655601lzzzzzzz1-97x150 photoI admit it - I love a good nonfiction book: The World Is Flat, The Tipping Point, Collapse - esoteric to some, but my kryptonite.  The only problem is, I buy 2 or 3 books for every book I read.  Whenever I used to stop by Borders, the bargain books called my name - and I answered.  No more. 3 months ago I decided I wouldn’t buy any book in a store, unless I absolutely needed it instantly (guess how many times that’s happened?).  So many of these books are on sale used (or even new!) at Amazon from 3rd party sellers for about the same price anyway.
    • Not more impulse buying. Since I’m in Hawaii, I won’t get books from Amazon for a week.
    • No more guilt over “missed opportunities” - I used to think to myself,- “I really want that book. If I don’t buy it now, I’ll forget!”  I no longer have that misplaced urgency and guilt. If I see a book I like, I just throw it on my Amazon Wishlist. Every few months I look at my list, and often I don’t even care about half the books on there anymore. So not only do I not feel guilty about “missing out” by not buying it, I feel vindicated for saving a few bucks avoiding a purchase I didn’t really need, and that may have sat on my bookshelf gathering dust.
    • I save time by not physically going to the store anymore, and I also save money by not buying things I don’t need.

Thoughts, comments?  Disagreements?  Related item for discussion: Is coupon clipping worth it?

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