April 15, 2011

Mr. Frugality: Habits over the Long Run

Needing soda, I elected to go out tonight to Wawa. I got to thinking, what is the cheapest way to purchase pepsi? This isn't a trick question. If you thought all forms of pepsi cost the same per fluid ounce, you are dead wrong. There is an old addage that companies stick to: more is less. They can afford to do this because they are selling their product well above manufacturing cost. I went to Wawa, and analyzed the prices of pepsi in 20 oz, 12 oz, 33 oz (1 liter), 66oz (2 liter), and 144 oz sizes.

We see a winner here: at Wawa, it is cheaper to buy the 2 liters. There is a lesson to be learned here as well. Look who comes in a close second: the 12 packs. There is a difference between the words thrifty and cheap. Being cheap is going for the 2 liters over the 12 packs exclusively. In my dorm room, 2 liter bottle sizes are not practical. I can't fit the suckers in my fridge! and who likes warm soda?

For a measely seven-thousandths of a cent more, I can purchase the 12 pack, which is more ergonomic in my case. Why care, if the prices are so small anyways per fluid ounce? it adds up. If I drink, arbitrarily, 32 oz of pepsi a day, I am consuming, in dollars:


32 oz/day
0.96
1.184
1.824
2.592
2.64

respectively. Would you rather pay 0.96 a day, or 2.64 a day? Let me put it this way if I have not done any convincing:


cost per year
 $         350.64
 $         432.46
 $         666.22
 $         946.73
 $         964.26

respectively. See my point? You can save hundreds of dollars per year on bad habits if you look for a good price (I acknowledge my soda kick is a bad habit). Again, you can save even more money by buying off brands of soda, but... cheapness versus thriftiness. If your grocery store or retail store offers 12 packs $2 off the normal price that I used in this example, it makes ZERO sense not to save money there.

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