What do you think about when shopping for something new? Is paying less one of them? Some of the thoughts that cross our minds at Bleeping World are:
Let me see if another store has that same product or service for less!
… Sometimes time is more valuable than money.
This thing is almost free, how could I go wrong? I have nothing to lose! I can try this product before investing in a better one. Basically, I don’t care if it breaks.
Yup, the product didn’t break. But it did break or ruin something else I own!
Well, I’ve compared “Product A” to “Product B”. Yup, same specification’s, it’s just a different brand name…
Once again… I ordered my Chinese from the wrong restaurant! That left a bad taste in my mouth.
If I cancel within 30 days I don’t get charged. I just have to remember to do it, that’s not a problem. I’ll just set a reminder in Siri.
They said cancel within 30 days but it can only be canceled on day 28 or day 29. Well I didn’t know that was going to fall on Saturday and Sunday!
Yes, everyone loves a good bargain. Paying less then the full price feels good, doesn’t it? But, if you’re not careful, you may end up paying the full price or more, one way or another. Being cheap by default, and not by choice, can harm your financial future. Here are eight reasons why.
1. Consumable Parts
Consumable parts are anything in which the product you use continually needs to be replaced. Such as filters for a water pitcher or light bulbs for a light fixture. When shopping for a product you might be comparing 2 items but one is much cheaper. Design and quality are also on par with each other. The replacement parts is a different story!
The Replacement Costs
Let’s take for example that light fixture. Both take light bulbs and when one bulb burns out you swap it out for another. You may be tempted to go with the one that is half the price, paying less, but later you find out it needs a special fluorescent bulb in a rare size that is going to cost you double the money for each replacement bulb. You may have gotten a bargain light fixture but those bulbs are going to cost you as much as a new fixture each time one burns out.
This is a common tactic company’s use in those blow out deals! They get you hooked in and now you have to pay for those ridiculously overpriced replacement parts for the rest of your life.
2. Problems Escalate
The rush to save a few dollars short-term may cost you a lot more in the long run.
You’ve come down with some kind of sickness and are unsure whether to see a doctor. Let’s say you use over the counter medicines to treat your fever. You congratulate yourself for paying less and saving money on a hospital visit. After a couple of days the fever doesn’t subside. It becomes even worse and you have no choice but to visit a doctor. By now you’ve made your condition worse and treating it will cost more.
You have seen enough of the world to know when and where to make compromises. When it comes to your health, family, career, and relationships, don’t sacrifice long-term well-being for short-term savings.
3. Purchases Aren’t Created Equally
If you’re on a trip and you forgot to pack your toothbrush, it makes sense to buy a cheap use-and-throw toothbrush. But, if your family needs a new car, you should go for the best one your budget allows. Especially if difference in cost is minimal compared to longevity of the product.
Sometimes paying just a little more means the product will last much longer or have a much bigger impact. You may end up paying more, but when you divide that by the amount of days of usage, you’re actually paying less.
In certain situations, you can be as cheap as you want and be proud of it. However, when it comes to paying less for a home, a vehicle, insurance coverage, furniture, accessories, your child’s education, or electronics, be frugal but not cheap.
4. Missing Parts & Hidden Costs
“What do you mean I have to buy the adapter separately,” Tom protested over the phone. The customer service representative at the other end cordially replied, “I am sorry sir, but the package clearly shows what’s included and what’s not. It’s unfortunate you missed it. Would you like to order an adapter?”
You get the picture, right? Before you buy anything, consider the whole picture. An item could be cheaper but not contain the normal accessories. When you identify hidden costs lurking within an attractive bargain, make sure your account for them. Don’t let omission put you on the wrong end of a deal. Sometimes you’re paying less but you don’t get the “whole” package.
5. One-Time Payment is an Illusion
“No, thank you. I don’t need the extended warranty.” 14 months later, Caroline regretted that decision. Her three-year old accidentally spilled milk on mommy’s laptop. But, Caroline’s laptop was out of warranty and fixing it would cost a bomb.
Many people think of their purchases as a one-time transaction. In many cases, it is not. After buying a product, you have to spend money operating, maintaining, and repairing it. A cheap product may require more money to operate, maintain, and repair. As a result, you end up parting with the money you saved and not paying less. So, be smart about how you decide to save money.
6. Deals Are Seldom What They Seem
When you spot a deal, remind yourself that there’s always a catch. Even if there isn’t, it’s better to err on the side of caution. We know you want to be paying less, but if the deal doesn’t make sense, you should stay away. Read between the lines, ask around, study other similar products, and mine the Internet for reviews.
Do whatever it takes to understand the deal thoroughly. After that, you can go for the deal. Even if you get burned, you won’t feel guilty because you did everything you could. Sometimes people end up paying more for something that is worthless. In this case, paying more just cost you more, and there’s nothing on god’s green earth anyone can do about that, you just got double fist’ed.
7. Social Consequences
People want to be reasonably successful. But, more importantly, they want others to see them as successful. Does being a miser really go with that image? No, it doesn’t. You want to be a good provider for yourself and your family. You want to experience the good things life has to offer. An attitude of cheapness makes attaining all this difficult. This is a case where paying less won’t cost you more but you may be trading your integrity, and too some people that is worth more.
8. Technical Support Wasn’t Part Of The Deal
You can cheap out on a purchase in two ways…
First, you can buy the product or service at a cheaper price from a not-so-reputed company. Maybe the company has a high quality product product and is just trying to make a name for themselves by getting people to try the product. Or, maybe there products are just bad and no one is buying them.
Second, you can buy a product from a reputable company at a bargain. You know they produce high quality products. So whats going on here? Maybe they are discontinuing the product. Or, maybe they have gotten bad review on just that one particular product.
In both cases, the law of equivalent exchange holds true. If a seller offers a product at a cheaper price, ask yourself, “How come?” It is likely that the seller has made a compromise somewhere down the line. Sooner or later, that compromise is going to bite you in the rear.
Sometimes, the price reduction makes sense. For instance, a seller may offer heavy discounts to clear existing stock and make room for fresh stock. But, the street vendor selling $100 Rolex’s from the trunk of his car is going to rip you off. Use your common sense. It will keep you and your money safe.
Put An End To Cheapness Today
Sooner or later, you will pay the full price of your purchase in some shape or form. You can get away with paying less occasionally. But, if you’re habitually cheap, the disadvantages will catch up. Instead of searching for the lowest price, look for the right price. When you find the right price, pay it and enjoy your purchase. Living this way is much more fun than squeezing dimes and pinching pennies.
Wise Budgets Beats Cheapness Hands Down
Budgeting your money is the cornerstone of sound financial judgment. You will see that if you learn to budget your money properly, you will never have to cheap out again. And if you have to cheap out, do it for the right reasons. Make sure the benefits of paying less offset the penalties.