I love this concept, and understanding it will make you a smarter consumer.

False economy is an action that appears to save you money, but actually costs you more money. It is also a concept exploited by retailers and advertisers.

Here is how it works. Lets say you like vodka and tonic. You and buy a one liter bottle for $1.25 (33.81 oz.)  or you can buy a six-pack of 6 oz glass bottles (a total of 36 oz.) for $4.95. The bottle costs you $0.036 per ounce while the cans are .13 per ounce.

If you follow the recommended 1:2 ratio of vodka to tonic, and use a 1.5oz pour of vodka, the 1 liter bottle will provide 11.27 drinks (we will round it up to 12). The cans will provided you 12 drinks.

Now tonic in a plastic bottle goes flat fast. I have no idea why, but a 1 liter bottle of tonic opened for a 5:00 p.m. dinner party is flat by the next day. Flat tonic is icky tonic.

Assuming you have two drinks a day, you need to buy four 1 liter bottles to drink for four days. That’s $5.00. You are also wasting 27 ounces of tonic each day.

On the other hand, tonic in the glass bottles fair better when opened, and the left-overs are still acceptable the next day. So, that six-pack of tonic gets used in it entirety for a total cost of $4.95.

So in the end, the six pack of glass bottles saves you $0.05. In this case, the more expensive item actually saves you money.