However, I can’t help but contemplate whether or not I have been focusing on the wrong factor. Time, not finances, after all, is the resource we are unlikely to find more of. Frugality is a positive in most situations, but I can think of more than one case when I let it get the best of me. In South America, I missed the Galapagos Islands because I didn’t want to take on a couple hundred dollars of credit card debt. I feel like I need my own Mastercard commercial: missing a once in a lifetime chance to visit the Galapagos Islands because you don't want debt = Retarded.
Mark Goldenson, an Entrepreneur from Silicon Valley, included in his 10 Lessons From a Failed Startup, excessive bargain hunting as one of his big no nos.
4. Set a dollar value on your time. I agree with Paul Graham that good entrepreneurs are relentlessly resourceful, but I have a bad habit of bargain-hunting for sport. I spent three hours negotiating our wireless bill down $100, which was a poor use of time given our funding. The mantra to pinch pennies ignores the value of time.
Time is arguably more valuable than money because you can’t raise more time. Dev suggested pricing our hours. You can divide your available work hours by salary, remaining funding, or total company costs. Ours was around $50/hour. If I was going to spend 5 hours negotiating, I’d have to save at least $250. This value should increase as you gain funding and traction. For anything greater than $500 at any stage, I’d still strive for NPR: Never Pay Retail.
I don’t know if I’ll ever pay retail, but I plan to tone down my frugality. The diminishing return of life on a shoestring is getting pretty small.