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A Parking Lot Case Study

MP900385984Let me tell you a story about a parking lot. My fiancé and I went away for the holiday weekend with three other couples. On the afternoon of the 4th, one of the other couples went into town to pick up some supplies, and learned from a local that there was going to be a big fireworks show that night. The local told them that most people here for the weekend would gather in the park, but they’d charge you $8 to park there, so the locals usually park for free at the golf course across the street and watch the fireworks from there.

“What great inside information!” I thought. “We can watch the fireworks for free!” I was apparently alone in my thinking. “The people here are really cheap, they’re not willing to pay for parking, but we can afford to pay for parking, so we should just go park in the lot” said one of my friends.

I wanted to give him the benefit of the doubt. After all, the locals are indeed a bit seedy (we were in marijuana country) and we had children in our group, so perhaps my friend just wanted a more wholesome environment for the kids. However, something about the way he said “cheap” made me think that wasn’t the whole reason. There was the implication that the locals had to be cheap because they don’t have a lot of money, but because we are all gainfully employed, there was no reason we shouldn’t pay for the convenience of parking in the lot.

My suspicions were confirmed when, as we were approaching the gate to the parking lot, we spotted a parking space just outside of the lot where we could park for free and walk the extra 50 feet or so to the park – we’d get free parking, and we would be in the park with the tourists rather than the golf course with the locals. “Let’s just park there and walk into the park” I said, which thankfully at least got the agreement of one other person in the car. But despite that person being the one driving the car, she instead listened to her husband, who chimed in with “nah, let’s just go into the lot, it’s fine.”

My jaw just about hit the floor. There, right in front of us, was a space we could park in for free, RIGHT NEXT TO the lot, and this guy wanted to pay for a parking space anyway. And his wife didn’t question him. Later that night, my fiancé and I discussed in utter amazement why anyone in that situation would have passed up the free parking space.

Was it convenience?

There is no question that this couple likes to pay for convenience, but the free parking space wasn’t inconvenient. It was about a 30 second walk from the park, as opposed to the 5 second walk from where we ended up parking. Nobody should be willing to pay $8 to save less than a minute of time. On top of that, there was some congestion getting out of the parking lot after the fireworks, so we probably ended up losing time by parking there.

But what else could it be?

It turns out, some people have it so ingrained into their minds that you must spend money on things, that they’re unable to see obviously better options even when they’re staring them in the face. The problem seemed to be that this guy believed so strongly that paying for parking was a given expense, that even with a free space literally next to the parking lot, he had already in his mind accepted the fact that he was going to pay for parking, and had completely shut himself off to any other options.

Is this you?

The guy I’ve been talking about doesn’t want to be hemorrhaging money, he just doesn’t know how to stop it. His problem seems to be that he can’t see the value of money he has, but once he’s spent it, he feels the pain of having no money. I think he’s probably an extreme case, but there are plenty of people out there who have trouble seeing the value of the money in their bank account. If you’re one of those people, the key to making smart financial choices may lie in the past. When you encounter situations like my parking lot case study, stop and think about about the previous month. Maybe you thought you were being frugal, but the end of the month came and you realized you had spent your entire paycheck. That didn’t feel very good, did it? You didn’t even realize you had spent so much money, but all those small purchases added up and before you knew it you had no money left. Well right now is your opportunity to make a new choice. If you mindlessly pull out your wallet instead of considering a cheaper (or free!) option, you’re going to be in the same exact place at the end of this month. $8 may not sound like a lot when your bank account has extra money in it, but there are 30 days in a month, and if every day you mindlessly shell out $8 because “I can afford it, so why not?”, you’ll have blown through $240. Can you still afford it?

Have you ever made an obviously dumb financial decision like turning down free parking immediately adjacent to paid parking for no good reason? Did you look back and try to figure out what made you behave that way? Have you managed to correct the way you respond to situations like that?

8 Responses to A Parking Lot Case Study

  1. I hate to pay for parking. One of the restaurants we go to occasionally has valet parking. If you get there early, you can usually find on street (free) parking a block or two away.

    • Gen Y Finance Journey

      I once went wine tasting where there was mandatory valet parking. The parking was complimentary, but you’re of course expected to tip the attendant. We were pretty angry about that one.

  2. I hate paying for parking (or any other thing that I could get for free). I’m not sure why anyone would want to pay for parking when there’s a free spot right next door?

    • Gen Y Finance Journey

      Honestly, I was kind of grasping at straws to rationalize why he didn’t want to take the free parking spot. I really think the only logical reason is that he just doesn’t value money until he runs out of it. And when it comes right down to it, I think that’s true of a lot of people, but maybe not to quite that extreme.

  3. I am on the verge of becoming disabled, so I may pay to park if it gets me a lot closer, but as you point out in this situation, the free spot was only 25 seconds further to walk. Even I would go for that. I have also observed many times, not for parking but for various items for sale, that people often think that low price equals poor quality. Just look at places like Saks Fifth Avenue or Neiman Marcus where they have “sales” and the items for sale are still much more expensive than comparable items at Target. Yes, I will pay more for a known higher quality item, but often there is no reason to spend the extra money other than “we can afford it, so why not.”

    • Gen Y Finance Journey

      If you have a disability, that precludes you from any judgment in a scenario like this one. You’re right though, the “we can afford it, so why not?” mentality can be seen everywhere.

  4. I know a woman who used to get so worried that events would sell out, that she insisted on getting tickets in advance and it always cost us more. This year, we discovered just how much money we could save by waiting until the day of the event. The first experience was nerve racking, but since then we have gotten tickets half off and even had people give us free tickets they couldn’t use. We may not always get the best seats, but they are usually good enough.

    • Gen Y Finance Journey

      Back when I was living in New York, if I wanted to see a Broadway show, I’d either go to the TKTS booth for half price tickets or go directly to the box office where you can sometimes get $25 tickets! I’ve gotten front row Broadway tickets for $25 that way!

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