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How to save money: Lesson One – The Power of Rounding

Rounding is a powerful tool when it comes to saving. A penny earned is a penny saved, but a penny can be the difference between saving or paying more than you should be. Let’s dive straight into examples.

Example 1: You buy 6 cans of tuna at 99 cents per can. At first glance, you say, hmm, six cans at a dollar per? That’s six dollars. But upon deeper analysis, there are hidden savings. A normal cheapskate will think: six cans at 99 cents is five ninety-four! So i’ll be saving five cents! While this is an okay way to save money, there is actually a more advanced way to save money when buying six cans of tuna. By grouping the tuna into two groups of three, and paying separately, you are buying two lots of 3 cans of tuna: (3x99c=$2.97=$2.95) + (3x99c=$2.97=$2.95). This way, you are actually only paying $5.90 for your tuna! That is the power of rounding. Now of course, rounding may backfire in your face if you group incorrectly. Grouping the cans into four and two lots results in you paying SIX DOLLARS instead of just $5.90. This leads to an important point that needs to be made for potential mega-cheapskates. When grouping, make the units digit a 2 or a 7. These two numbers are a cheapskates favourite numbers because they ROUND DOWN.

Example 2: At a petrol station, a non-cheap person will PRESET the amount they want to put into their car. Let’s say its $50. They punch in fifty into the meter, and the pump will pump out exactly $50 of fuel into the car. This is a big no-no: NEVER PRESET at a petrol station. Now a normal cheapskate will put in $50 of petrol, and take out his handy SAVE FOUR CENTS PER LITRE voucher. Okay, now this is starting to be a little better. BUT the principle of rounding comes into play again. Let’s see what a super-cheapskate would do: he puts in $50 of fuel into his car. THEN, with a trained flick of the fingers, he lightly presses on the fuel lever, and VOILA. Two more cents worth of petrol runs down the nozzle and into his car. At $1.20 per litre, you are getting SEVENTEEN FREE MILILITRES of petrol. And not finished, the super-cheapskate pulls out his SAVE FOUR CENTS PER LITRE voucher. NICE SAVINGS.

Lesson Recap: Always group your purchases to make 2 or 7 – they round down and you will save TENS OF CENTS! Take advantage of the rounding down to get more bang for your buck, and that extra 17 mL of petrol 8D

Until next time, remember to ALWAYS ROUND DOWN!

-Rkim