I’ve had a personal buying philosophy in place for several years, but I don’t know if I’ve ever blogged about it.
When shopping for something, do your best to buy only what you need and upgrade only when you need to.
Far too often we get ahead of ourselves in an effort to be prepared for every single eventuality. Unfortunately, that can be a very expensive endeavor.
Real Life Example: The Gym Membership
When we moved to Cheyenne, my wife and I decided that we’d do our exercises by taking advantage of walking/running on the greenway that is just a couple of blocks from our house. We’d considered getting a gym membership, but didn’t want to pay a monthly fee until we proved to ourselves that we’d actually exercise with the free option before pursuing a paid option.
Well, we’ve been doing the free option, and now it’s starting to get cold so we decided to find a gym where we could get a membership.
The YMCA in town has a bunch of exercise options. There’s a gym, swimming pool, weight room, racket ball court, and more. A family membership there would cost $55 per month.
The local regional medical health center doesn’t have a swimming pool or racket ball court, but they have plenty of aerobic classes and exercise machines. The cost of a membership for my wife and I would be $30 per month.
Applying this personal buying philosophy, we’ve decided to start with the cheaper gym membership option. If we find that after a few months we’re faithfully going to the gym and wanting to take advantage of the extra features at the YMCA, we could ‘upgrade’ at a later date.
Lesson: Always try the cheaper option first and then upgrade according to your usage and needs.
Real Life Example: Home Entertainment Center
After considering the cost of a TV and cable, we decided that we didn’t want to pay for either of those things since we don’t watch TV enough to justify the expense.
We decided that instead of buying a TV, we’d watch TV/movies on one of our laptop computers hooked up to an external monitor (that we got for free with a brokerage account sign up). It didn’t take me long to decide that I’d rather have Netflix for $7.99 a month than watch free stuff on the computer with advertisements. Honestly, there’s a time savings (42 minutes to watch a TV episode that is 1 hour on TV), and there is a materialistic benefit. Advertisements on kids TV shows are all encouraging them to buy something else – the latest toy. Anyway, we tried a cheaper option first (free), then upgraded to the next cheapest option.
We tried watching our family movie on the laptop with the monitor, but found it hard to hear. (Every Friday night it’s a movie and homemade pizza.) We decided to order speakers. Again, it would have been possible to go ahead and get a TV, but for the cost of speakers, we have a set up that we like enough for our infrequent movie watching.
Real Life Example: Prepaid Phones
Another thing we did when we first moved was that we started off using prepaid phones for the first few weeks. We had planned to give it a month or two trial, but unfortunately Verizon was changing their pricing on phones with data plans, so we shortcut the trial process. In the end, it cost us more by having a prepaid phone for two weeks and then getting a cellular plan, but still I’m glad we did it because if it had given us everything we needed in terms of phones, then we could have saved a lot of money in the long term.
Start Small and Upgrade Later (if desired/needed)
Far too often our first inclination is to go out and buy the latest and greatest. Start with a basic version of something to see if that will meet your desires/needs. If you’re finding it insufficient in some way, then you can go ahead and upgrade. But by applying this small extra step, you can easily save yourself thousands of dollars a year.
When was the last time you bought small? How frequently do you find yourself wanting to upgrade?