A few days ago, while reading an article in Time about how to lower stress, I was reminded of the words ofwisdom that a very successful friend of mine once shared with me.  He explained that in the past, when things got tough in one of his businesses, he focused on slashing overhead to the bone.

Nothing was too small to escape his attention — terminating the delivery of bottled water, handing down an edict to his staff to use fewer paperclips, buying lower-quality copying paper, hiring a less-expensive janitorial service … and so on.

The result?  Every time he declared war on expenses, it had almost no effect on his bottom line.  He finally recognized that you don’t make money by cutting overhead.  Making money is a direct result of the amount of time spent creating valuable products and figuring out ways to market them.  Marketing is the engine of every successful company, because it leads to sales — and sales lead to profits.

It all gets down to how you spend your time.  Would you rather spend it focusing on problems or opportunities?  Any overhead, no matter how small, is a problem if your income isn’t high enough to cover it.  And, in theory, no amount of overhead is too high if your income is great enough to cover it — preferably many times over.

The reason this crucial point came to mind as I was reading the Time article is because I truly believe that worrying about nominal expenses is a huge stress generator.  I say that because I used to do it to an extreme.

It’s nice to buy something at the lowest possible price, but you’re being unfair to yourself if you think of price in a vacuum.  In order to make an intelligent decision when it comes to saving money, time and stress should always be factored into the equation.

I once knew a woman who would drive fifteen miles to save seventy-nine cents on a bottle of shampoo.  If she bought ten bottles, she might save $7.90 — which sounds great until you factor in the extra hour it might have taken her to get to the store that had the lower price.

In addition, there would have been stress involved if she had to fight her way through heavy traffic to get to that other store.  Pennies may add up to dollars, but the time required to save those pennies can add up to a lot of stress, and enough stress might just add up to serious illness or premature death.

Early in my career, I began to reassess some of the ways in which I was saving on expenses, and I came to realize that in order to make intelligent decisions when it comes to saving money, time and stress should always be factored into the equation.

Following are some examples of “money-saving” habits that I eliminated from my life as a result of this reassessment.

• When I lived alone for a while in my twenties and money was scarce, I did my own grocery shopping.  I bought a lot of fruits and vegetables, and, after I brought them home, I often found there was some spoilage.  Instead of throwing out the spoiled items, I would pack them up once or twice a week, take them back to the supermarket, ask to speak with the manager, and return them for a refund.  It was a time-consuming undertaking, to say the least.

  When I finally thought about what I was doing, I estimated that by getting those refunds, I probably saved, on average, a couple of dollars a week — or about $100 a year.  Without realizing it, what I was telling myself was that the time I invested in returning spoiled fruits and vegetables to the supermarket was worth less than $100 a year!  Needless to say, I stopped returning spoiled produce.

• Another example was my habit of carefully reviewing the bill when I ate out.  It took me a long time to recognize two things about restaurant tabs:  First, they are seldom incorrect.  Second, on those rare occasions when math mistakes are made, the errors are in the customer’s favor as often as they are in the restaurant’s.  In other words, a wash.

  But even if you end up on the short end of restaurant-tab mistakes, how much in the hole could you possibly be over a period of thirty or forty years if you didn’t take the time to scrutinize every check?  $100?  $200?  $300?  I doubt it would be as much as $300, but, even if it were, that would average out to only about two cents a day over a forty-year period.  I don’t know about you, but a few minutes of my time is worth a lot more than two cents.

• A final example of a “money-saving” practice that I finally backed away from is the dreaded “rebate” game.  As you are probably all too painfully aware, it’s a game played relentlessly by computer software companies.  All you have to do is read the voluminous instructions, fill out a form that asks you for information that includes everything but birthmarks in private places, cut off the box top from the software package, put it together with your original receipt, and mail it in.

  Then, if the software company should actually receive the information from you, it might send you a rebate of $50 or so — within eight weeks.  Doh!  I finally woke up to the reality that my time and effort was worth far more than the money I was saving by being a rebate addict.

Let me make it clear that I don’t believe in profligate spending.  But I do believe in factoring in time and stress when it comes to saving insignificant amounts of money.  I realize that questioning the efficacy of saving money flies in the face of conventional wisdom, but the reality is that many so-called savings are nothing more than illusions when juxtaposed against the loss of your time and the damaging effects of the stress they can cause.