We've heard it many times before: Save, save, and save some more. Save enough that it hurts. Save today for a better tomorrow. A penny saved is a penny earned. But when is it wise not to save? When should we pay extra for the things we're buying?
Depending on who you ask, the answer can be very different. Ask someone who lives an extremely frugal lifestyle and they may tell you to always buy the cheapest option. If you ask someone who constantly lives above his/her means, they may tell you to always buy the brand-name product because they are the best. So when should you splurge and when should you save?
My general rule-of-thumb is to be smart with your money. Being frugal doesn't necessarily mean being cheap any more or less than paying full-price promises that you're guaranteed to get the best quality. When it comes to generic prescription and OTC drugs, paper towels, and various pantry staples such as flour (among other items), I will certainly purchase the cheaper option. However, when it comes to buying my running shoes, I always invest in quality shoes because I know they'll last longer and provide more comfort for my long marathon training runs. Here are some other commonly purchased items that it just makes more sense to splurge on:
- Footwear. As I mentioned above with my running shoe example, footwear is definitely something that requires a larger up-front investment. Consider your favorite pair of shoes: How often do you wear them? If they were made of cheap materials, do you think you'd be able to wear them as long as a pair that cost more? With footwear, higher quality materials may command a higher price, but those shoes will have a longer lifespan, provide your feet with a higher level of comfort, and be easier to fix should you need to do so. If you purchased a $40 pair of shoes and those shoes wore out after 6 months, you'd be forced to buy another pair. If you purchased a $100 pair of shoes that lasted 1.5 years or more, you'd be saving money, aggravation, and your feet.
- Products with lifetime guarantees. Sure, purchasing a jacket from The North Face or a bag from L.L. Bean requires a much larger investment than buying a cheap backpack or jacket from a discount retailer. But what if you consider that these products come with a lifetime warranty?!If the zipper on your $20 discount jacket breaks, you have to replace it (or the jacket) yourself. If the zipper on a jacket from The North Face breaks? You can send the jacket back and they will repair or replace it–for free. Other companies that offer similarly generous product warranties include Land's End, JanSport, Timbuk2 Bags, some Rubbermaid products, Pelican cases & lighting, Mountainsmith bags, and Arc'teryx.
- Cars. Obviously, the best course of action when purchasing a car is to buy a used vehicle. Regardless of your decision to purchase new or used, you should invest in a quality vehicle that has a solid reputation. Consider the total cost of ownership, anticipated future repairs, and depreciation rates before signing on the dotted line.
- Home improvements. When it comes to protecting one of your largest assets, your home, extra money spent on renovations and repairs is a wise decision. If you're hiring a contractor to complete the work, doing your research before making your decision can be the difference between enjoying your new bathroom for years to come and ending up on HGTV's Holmes on Homes. Additionally, investing in quality materials is much like investing in quality shoes: you could choose to install cheaper carpeting that may need to be replaced in 5 years or you could pay extra for hardwood floors that can be enjoyed for decades to come.
What products are you willing to spend extra money on?