How much are you paying for free stuff?
In reality, there is no such thing as free stuff: someone has to create the product and pay the cost of producing it. The catch is that sometimes the cost of things is passed on to someone else or paid for using some alternative method that isn’t obvious. How can you pay for free stuff? Over time, stress and restrictions unlike what you normally would.
Wasting time
Are you wasting your time jumping through hoops to collect the free stuff? The saying “time is money” applies to anyone, not just entrepreneurs, because time is something that cannot be recovered once it has been lost or “spent”. The way to know how much your time costs is to compare it to money. If I spend an hour a month working for “free stuff” and I could be doing something that pays me $20 an hour, then I’m paying $20 a month. There are cases where you can save time, but you don’t necessarily get paid for it. What else would you rather be doing instead of chasing free stuff? Maybe you’re learning something new, researching a deal that could save you money elsewhere, doing tasks you’re paying someone else to do, or changing a habit that could save you money. This concept is very individual, and you would have to see where your time goes to understand where the trade-offs are. I often ask people, “Where does your money go?” There is a corresponding question that is in many ways more important: Where does your time go?” Given all the complaints about not having enough time, this question needs to be examined more closely.
personal information
Many sources of free stuff will be presented only if you provide personal information. What’s wrong with this? You could argue that you don’t care, since all my information is available anyway and I have nothing to hide. Whether this is true or not, it still leaves you vulnerable to filling out endless forms or reviewing phone calls and emails that you probably aren’t interested in participating in. Your information may be “shared” or sold to other vendors you did not deal with directly, adding to the hassle and waste of time. In the age of hacking and identity theft, the more places personal information is available, the more likely this is to happen to you. In addition to the stress and time spent canceling credit cards, updating antivirus software, and chasing down money taken from your accounts, there is also an increased chance of fraud and theft, which is a huge disruption to your life. The effects of that can linger for years after the occurrence. The best security measure you can take is not to put information on a technology platform in the first place.
Purchasing Restrictions
The old adage for saving money on product purchases is to “shop around” to find the best deal. If you’ve ever done this, you know that sometimes there are wide divergences in the prices of goods, either from different places or at different times of the year. One of my most valuable ways to save money is to shop when/where other people don’t. If you’re accumulating points, are you still going to shop around for the best deal even though points aren’t accumulating? From the people I’ve seen, I think the answer is no. It’s not likely that one store or website will always have the best deals. Even the cheapest known stores can have expensive products.
to be organized
Does being organized and doing administrative tasks come naturally to you? If so, tracking points and optimizing their use would be second nature to you. I see that many people are just the opposite: filling out forms, doing paperwork, calculating discounts or accounting for taxes on purchases is not their strong point. If you want proof, go out to dinner with a group of people and see how the tip is calculated. If people bother with that, they’ll use the computer or an app to do it for them. An app or computer can’t make decisions for you when it comes to purchasing products with intangibles like time, irritation, and stress built into the equation.
the pretzel
Are you forced to buy things or use services that you really don’t want or at times that aren’t convenient for you? Are these options costing you in many other ways? A classic example is flying somewhere for points. Yes, the flight is free, but it is at 3 am on Monday. You may have been able to take transit to the airport, but at such a strange time, you’ll need a limousine or taxi. The flight could have been direct, but the free flight may have 1 or 2 stopovers where you lose hours at the airport(s). Since you’re wasting time at the airport, you’ll buy more expensive meals and use more roaming fees unless you plan ahead. If you have an overnight stopover, there is an additional transportation and lodging fee that is part of your travel expense, but not necessarily part of your vacation. You may need additional vacation days due to this free flight, which will cost you other vacations you want to take. If you’re starting to feel like a pretzel, this is it. Are you going to make a comparison to see if the pretzel flight is worth paying for a direct flight at the time you want and for the destination you want? If you forgo the pretzel flight, you may not be able to redeem these points in the future. You may then have to buy something to “use up the points.” Once you commit to these programs, you will be under the rules of the issuer and they will change at any time to suit the issuer and make a profit. If someone is making a profit, the customer is paying for those profits. The trick for you is to figure out if it’s worth it despite what may happen.
When is free stuff worth it?
Free stuff can be a good deal if it’s treated like a discount you weren’t expecting. If you take the opposite view of all the points mentioned in this article, free stuff will be a good deal. If you would have bought the product anyway on its own merits and the points are a bonus, you are not subject to additional hassles or organizational hurdles, you have options to use the loyalty program and still get the best deal without the pretzel effect, then free stuff is probably a good idea. The key to this concept is to look at your spending habits and style and find a program that is a good fit for you rather than having to fit what the program requires. Sometimes you may have to drop programs if they just aren’t worth it. If you find this impossible due to the idea that “I have to use my points” at all costs, this can resemble an addiction and decisions will probably be distorted rather than a bonus.