Thursday, March 1, 2001

Does saving a dollar here, a dollar there, really pay? I know that kind of petty frugality enjoys good press, but you gotta wonder.

Adults are always lecturing kids about how modest amounts of money grow into fortunes, and we've all seen those tables showing how much your 401(k) would be worth now if you had only started contributing when you were 21, if you weren't too stupid back then to realize that even you would be old someday. But people used to sing the praises of whole milk and stock options, and look what we know now.

Finances were on my mind yesterday when, in the spirit of nest-egg building, I passed on a cup of coffee from Dunkin' Donuts.

That's $1.54 saved! I thought proudly, vowing never to buy coffee out again. I had been hoping for a raise, but who would need one now?

I imagined the life I'd be leading with my savings - the fancy clothes, the exotic trips, the 2,000-minutes-a-month cell phone plan.

I did the math. By the end of one workweek I'd have an extra $7.70. In 10 weeks, that would balloon to $77, in 50 weeks, I'd be looking at $375.

(I know a year has 52 weeks, but I used 50 because I was walking and it was easier to do the math in my head, and besides, I might enjoy a two-week vacation, coffee-free, of course, with my savings.)

When I got home I called a friend to crow. ``Guess how much I'm saving annually by skipping a simple cup of coffee?''

She was unimpressed. ``Do you know what that buys? You suffer caffeine-withdrawal headaches for an entire year, walk around feeling sorry for yourself, all `I can't believe I can't afford a cup of coffee and I've been working half my life,' and for what? For $375 you can't even take a decent in-season long weekend on the Cape.''

I was deflated, but just for a moment, until I realized the flaw in my plan. Why skip a cup of Dunkin' Donuts coffee?

If I forgo a Venti Frappuccino from Starbucks, that's an extra $3.83 in my pocket a day. If I don't have a small pot of coffee from room service at the Four Seasons, why, I'm saving $6.24.

For almost $1,400 a year, I could certainly give up a daily Frappuccino. In fact, it would be easy. I haven't had one in years. And while I'm at it, I threw in the savings that would come from not buying a pack of cigarettes every day. That's almost another $1,400. I know I don't smoke, but why should I be penalized for that? And what if I ``stopped'' gambling? The savings there would be enormous.

I was giddy thinking about the downpayment on my new home, until I faced facts: I was engaging in fuzzy math.

``What you need to do,'' my friend said, ``is stop worrying about saving, and start charging more on your credit card.''

I would, except there's a problem. I have one of those cards that provides a year-end breakdown of where you've spent your money. Believe me, there's nothing worse than seeing this:

Diet soda: Fresca: $2,560. Diet Coke: $1,230.

Trendy clothing that is already out of style: Pashmina shawl: $198. Cow print purse: $50.

Hair products you never used: Straightener: $35. Volumizer: $40.

I think I'm going to go back to my old approach, which is the same one I take with medical matters. Have a cup of coffee and don't think about things. It's best not to know.