We all want to save money. That’s a universal in today’s economy, and it isn’t a bad impulse; it’s way too easy to fall into the trap of spending money on things you don’t need. But on the occasions when you are buying something you need and use regularly, trying to save money can sometimes be counterproductive.
How so, you ask? The old idiom that you get what you pay for is true on a number of levels. For certain purchases, going with the perceived lower priced item can end up costing you more in the long run. Here are 6 traps to watch out for when trying to save money by bargain shopping.
Many times the less expensive end of a given product line can be of inferior quality. Cheap plastic dollar store toys, for example, will inevitably break more readily than those from a quality toy manufacturer. It almost always costs less in the long-term to invest a little more, especially for those items that will experience a lot of use.
This is especially true of electronics, but applies to almost any kind of purchase; cheaper products inevitably become obsolete faster than more expensive ones. For example, processing power in computers doubles every few years, meaning a lower end phone, tablet or laptop will be left in the dust within a few years at best.
One pitfall that is easy to fall into is focusing on one purchase at a time. You may be so focused on getting a good deal, that you don’t consider that buying in bulk is often a better use of your money. Another example is if you’re assembling a toolkit, sometimes it’s simply easier and less expensive to buy an already assembled one instead of trying to find each tool individually.
Something many of us don’t take into account is that our time, just like our money, is a limited resource that needs to be treated as such. For example, let’s say you have two items of equivalent quality, but one costs $10 while the other is on sale for $5. It’s simple to decide which to buy, right?
But let’s say that it’ll take you three hours of shopping to find the $5 option. Suddenly, the choice becomes a little more complicated. This is because if it wastes your time, tracking down deals is a hollow victory that costs you more than you save.
Related to the point above, another way it can be worth spending more money upfront is when the less expensive item you buy will be less efficient and incur a time cost to you. A good example of this is lawn equipment. A substandard or underpowered lawn mower will cost you less money but will require more effort to push and take more time to cover the same ground as a better machine. When you shop, carefully consider the value you place on your time compared to the money you could save.
This point is sometimes called the “sunk cost fallacy.” Essentially, a sunk cost is when you’re willing to spend good money after bad because you don’t want to waste the money you’ve already invested. For example, you might be unwilling to spend $10 on a purchase, so instead, you spend $7 on a cheaper one. But through the sunk cost fallacy, once you have that item, you’ll be willing to spend another $4 to keep it working, more than you were originally willing to spend.
The sunk cost fallacy is a common psychological phenomenon that we all experience, but if you’re mindful of your purchases, you can avoid falling for it. Know when to cut your losses, and you’ll spend less money and be happier in the long run.
While you may agree with everything on this list, in life we don’t always have the money to buy something right the first time. This is where payday loans can be of great help. Payday loans are a fast cash option that can ensure you have the money to not settle for something that will cost you more in the long run. It has been said that a bargain is something you can’t afford at a price you can’t resist, but when you really need something, price is no object.