When to Save Money and When to Spend a Bit More


annuities_good_value_large300Being frugal is not the same as being cheap – it’s about spending your money wisely, based on your individual earnings, savings, priorities and goals. Buying cheap stuff simply because it’s cheap might actually wind up costing you more in the long run. However, many people are unclear on when it’s wise to spend a bit more for a quality product.

What is frugality?

Proper financial behavior involves a person living on a day-to-day basis while still being able to save money toward certain goals. Smarter spending decisions are one of the tools.

Many people assume that simply buying the cheapest product out there is the smartest way to save money, which is not the case. Actually, buying cheap can often lead to more expenses down the road, maintenance costs, replacements, etc. There are certain purchases for which – when more money is spent on a quality item up front – the buyer will wind up getting more for their dollar, avoiding annoying related expenses in the future.

When to spend

The two factors in making any purchase are (a) the price and (b) the quality. This holds true whether you’re buying a yacht or a pair of sneakers. When is it advisable to cut corners and when should you break the bank?

Many people tend to choose cheaper products when the item is something they don’t care too much about – cleaning products, underwear, etc. However, if you have to use more of a product or replace it more often because of poor quality, the original savings is soon gone. Here are a few examples:


When buying a car, it’s rarely wise to simply go for the cheapest option out there. The quality and condition of a car depend on so many factors that there’s no simple correlation between price and quality. A wise buyer must forecast the total cost of car ownership – maintenance, repairs, fuel, storage or parking, among others. The car that has a cheap sticker price might wind up needing endless repairs or be gas inefficient. On the other hand, more expensive doesn’t translate to better quality. Many luxury cars have high prices simply because of branding or luxury details, rather than better fuel efficiency or parts. Make sure to consider additional costs and invest in the money-saving qualities of a car: fuel economy for long-distance drivers, safety features, etc.


Much like a car, a house’s value is made up of many elements. It is not a purchase which should involve skimping on details. Once again, a buyer must take into consideration which costs will be lower at the time of purchase and save future repairs and maintenance costs. Certain costs which involve things inherent in the later value of a house – square footage, location, and neighborhood – are irreversible. For example, buying in a cheaper neighborhood might mean future de-valuation of a home. The same rule applies to rentals, albeit to a lesser degree. Make sure to get a home inspection and do plenty of neighborhood research before purchasing a home.


This does not refer to Italian designer handbags! While it’s fashionable for women to change their bags and purses on a more frequent basis, luggage, laptop bags and wallets are more often called on to stand the test of time. Quite often, spending more for a quality bag means that you’ll have to replace it less. Often luggage comes with hefty price tags, but the costs involved are reflected in the durability of the product. While a $200 suitcase might be shocking at first, one must realize that it could last you for 15 years. The $50 bargain suitcase, on inspection, will probably prove to have cheap materials and could get destroyed after as little as one trip.

Electrical appliances

Depending on the item you’re buying, you might want it to last for at least ten years. When you spend more on an appliance, you are often buying durability, warrantee and reliability. You should come up with an equation which includes budget, cost of operation, and cost of the product. A product with better durability and a longer life will be worth more if you need to sell it later on. A good warrantee should also be factored into the long-term cost of an appliance, as it can save you a lot of money. Additionally, energy efficient light bulbs, rechargeable batteries, power strips, and other accessories can make an electrical appliance cheaper in the long run by lowering electric bills.


We live in an age when many people prefer to buy throw-away furniture that suits their fast-changing lifestyles. However, cheap furniture usually does not last too long. Therefore, buy based on how long you expect to want or need the furniture in question. If you’re a student that will likely get rid of the furniture after college, a cheaper item is probably good enough. Certain items, like mattresses, might be worth an extra expenditure, since the quality of the item will affect your sleep and, therefore, your daily life.

The purchases mentioned here are only a few examples of items which might require a bigger investment. Your unique lifestyle could include many other opportunities for smart spending; computers, sports shoes, and children’s supplies are all worth taking into consideration.

Consumer culture

Believe it or not, our ancestors lived in a world where people used only what they could produce themselves, including clothing, food and tools. When was the last time you saw someone darning a sock? These days, capitalist culture has made us used to fast consumption and disposal: simply because everything we could want or need is so easily available, we should buy those things frequently, cheaply and unconsciously.

The trick to sound spending is to abandon that popular way of thinking. Buying a new product is not always the solution, and buying a cheap one might be even less of one. Spending a bit more effort when doing shopping could wind up saving you a lot of money. There are plenty of resources out there: online product reviews, price comparison websites, etc. In addition, you’d be better off not being blinded by brand names that demand higher prices for no apparent reason. However, when you do discover a higher-priced item which has inherent value for cost, invest in it and see if it saves you money over the long run. There are many companies which stand behind their promises of quality and will replace a product that doesn’t live up to them.