Wednesday, December 30, 2009

The Power of Small Changes

While I support the Japanese practice of kaizen (continuous improvement), the opportunity for improvement is not always continuous. When you buy a  car, for example, you have an opportunity to improve your fuel efficiency which cannot be improved again (except for tuneups) until you replace the car again. In such cases, even a small one time change can have a long term payoff. Let's consider an example.


Imagine that you are buying a car with an average fuel efficiency of 26 miles per gallon and that you will drive that car for 100,000 miles. In that 100,000 miles, you will burn 4000 gallons of gas. If each fillup gets you 15 gallons, that's 267 trips to the gas station.


Now, imagine that instead of 25 miles per gallon, you buy a car that averages 26. That one change saves 154 gallons of gas and eleven trips to the gas station. If a trip takes five minutes, that's almost an hour of your life saved in not filling a gas tank. You also save the cost of eleven tanks of gas.


Perhaps you prefer to get a new car more often. If you trade in at 50,000 miles, the savings for the car over a couple owners does not change. Your savings don't change either -- you just spread the savings over 2 cars instead of one. Of course, you've paid for two cars instead of one, too.  


Results get better if the difference in fuel efficiency gets greater -- if you traded up during Cash for Clunkers, you know this better than most. The same logic and similar math applies to any product with a significant life. Compact florescent lights save several times their cost over the life of the bulb, and newer CCFL and LED lights do several times better than that. You may pay a premium price for a more efficient furnace, but the payoff over its lifetime can be huge.


Almost every purchase is an opportunity to buy something that will save time, energy and money. If the product is going to be part of your life for years, put appropriate thought into life time costs, benefits and savings. Your planet and your pocket will thank you.

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