Tuesday, March 1, 2011

Frugality: Saved Dollar Better Than Earned Dollar


Important fact: a dollar saved is even more valuable than a dollar earned

This is because when you earn a dollar, the government will keep about 35 cents on average - so you get to keep just 65 cents or so for your labor in return.

On the other hand, when you save a dollar, you get to keep the whole thing.

A recent example to demonstrate this point: the other day the Garmin in our car died (yes, we need a Garmin since it translates directly into fuel and time savings every single week that we use it). The poor dead Garmin was three years old and no longer under warranty. We found a replacement, the Nuvi 265W, at KMart for $129.99. But then it went on sale for $99.99! We therefore saved $30 and got to keep it all. If we'd earned $30 then the government would have kept about $10.50 of that same $30 amount.

But wait a minute. As a non-profit organization, contributions to Valhalla will be tax deductible, and if we do things right all of Valhalla's income will be tax-free. So wouldn't it be better to "earn" a dollar through tax deductible donations by dedicating every ounce of our energy on fundraising rather than spending the time required to research and bargain necessary to save a buck?

No.

Here's the logic and hard reality: behind each dollar donated to Valhalla, somebody - *the donor* - already worked to earn that money, and already paid the government about 35 cents in the process. In other words, he or she really had to earn $1.35 or so to give us that dollar. We had better respect that fact at all times.

There is no doubt that we will constantly be fundraising and applying for various grants, but almost as important will be to be frugal and thrifty with every single dollar that we spend. Each dollar gathered and saved will serve as an act of respect and appreciation to the efforts of the individual donor who was kind enough to give to Valhalla, and in turn give them a reason to respect and have confidence in Valhalla as a non-profit organization.

It will be our duty to honor and do right by every single donor who choses to support combat Soldiers, whether they donate a single dollar or a million or more. This can be done, in part, through a solid frugality program.

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