Saving (and spending) pennies

A penny spar’d is twice got.

The root of our well known proverb “A penny saved is a penny earned” is traced to George Herbert’s Outlandish Proverbs (1640). The idea is that by keeping a penny, you have the penny to count in-hand rather than counting the penny spent. Hence the thought ‘twice got’.  Over time the phrase was evolved into other variations including:pennies

A penny saved is a penny Earned.

It seems we don’t know exactly who to attribute the modern phrase to. It was printed in Pall Mall Magazine in September 1899. While the phrase has obvious implications for our personal finances, it also plays well into the business world when we consider the application to profits.

Those who know and work with me know that I’m a stickler for company expense control. Since I’m currently positioned in IT, that means I constantly look at the Sales General and Administrative expense on the company’s income sheet. I don’t consider myself obsessive over it, but I do know it’s my job to keep up with such things. IT has an indirect contribution to sales and the top line revenue, but it has a direct contribution to the SG&A costs and the bottom line. Dollar-for-dollar and penny-for-penny, IT spend impacts the profit line of the company.

You cannot bring about prosperity by discouraging thrift.

William Boetcker is attributed with this phrase as a part of his Ten Cannots. I suspect he was talking more to individuals and personal finance than business. But if I play this thought out for the business world it has good meaning.

I don’t own my own business. I work for someone else. But I take the approach that I’m employed and entrusted with spending the owner’s money. If I were the owner, I would certainly want employees who were concerned about how they spent my money.

In the business world and in IT, we don’t always want to be known for being thrifty. We all know that’s it’s not always wise to go with the lowest bidder for goods and services. As the saying goes, ‘you get what you pay for’. But the idea is that prosperity is linked with being wise about how we spend the pennies of the company. So we should think about why the pennies are spent. What’s purpose? What’s return? This is how we all contribute to the bottom-line. On the income statement, a penny saved translates to a penny earned. The bigger trick is to figure how to take a penny spent and turn it into three pennies earned.