Thursday, October 9, 2008

Spending to Save (seriously you guys!)

One important tightwad rule is that occasionally spending the big bucks is needed in order to save money in the long run. It took me a few years to truly catch on to that principle. But, now I swear by it. I still throw up a little in my mouth when we buy something that’s more than $30 and/or less than 50% off, but financial lessons of the past always soothe my stomach and my bank account. There are some ground rules to this philosophy…

Everything must earn its keep. We’re pretty firm on this rule. From the couch to the kids, if something isn’t earning its keep, it’s at risk of being sold on EBay (ask my daughter if you don’t believe me). This is a tough rule because tightwads are also usually packrats, so you really have to cling to this rule in order to not fill your life with unnecessary clutter. My rule goes like this: If it hasn’t been used in a year, it goes. Simple. Occasionally I’ll break this rule for things like baby clothes or gear (i.e. the stroller I haven’t used in two years) and other items that WILL have a use down the road, but the exceptions are rare. On purchasing, I like to determine how much I need to use something before it has earned its keep. I’ll use a friend of mine as an example here. Now, she’s Canadian, so we give her leeway in the common sense department (said with love people), but the woman buys a new purse every six months! I buy a new bag… hardly ever. Let me compare the last bag purchase of hers to my last purchase. Her bags average $50, even on sale. She uses them daily, so it’s costs her $.27 per day to use that bag. My last bag purchase was a great sale on a $55 bag. I got it with two other bags for $15 total. I gave the other bags away as I didn’t need them, but I’m still saying this one bag cost me the full $15. For six months this bag costs me .08 to use daily. I love this bag and will be using it for at least another year or two or more, so in two years it will cost me $.02 a day to use this bag. I can deal with that. See the difference?

Think ahead and prevent. This one has been a hard rule to learn. As poor newlyweds Sam and I did not take the best car of our car. We had the oil changed maybe yearly and NEVER had any tune ups. So, when our transmission went out, we really had no one to blame but ourselves. We spent twice what our car was worth fixing it than we would have had we just taken care of the car. Not a mistake we will repeat again. Yearly medical check ups are another way to prevent a bigger bill. Yes, it’s expensive to see the dentist, but a cavity is easier to fill before it’s a root canal. Not only is the tab higher, but the time off with work, extra child care… that bill can climb.

Another example (and lesson in my own stupidity): I had a lovely kitchen aid mixer given to me when I was first married. It was used, but still worked great and had many accessories. I never used it and it sat on or under my counter collecting dust for years. Finally, a friend of mine kidnapped it and it has been loved ever since. This never bothered me until this year when I decided to really focus on baking to save money and live more healthily. When I looked over the wasted money we’d spent on cheap hand mixers and other kitchen items that had broken almost immediately after being purchased I realized I could have bought that kitchen aid twice over! True, it wasn’t earning its keep when I had it, but it was free and I had the storage space. A big example of a costly mistake from not looking ahead on my part.

Take some time to research. This is a pain, but worth it. Because you’re thinking ahead, you should have time to research a purchase. Don’t buy the first product you come across, make sure you get the best product for your money. If I buy something that runs more than $50, I expect it to last me 10 years or more. That limits me when I purchase, but again, saves money down the road.

As I went on my quest to buy a mixer, I researched a lot of brands. I had a list of appliances I wanted for cooking and I had to find one that could do most, if not all those tasks and had a price tag I could stomach. In the end, I found kitchen aid really was my best bet… if I could find a good deal.

Find a deal if there is one to be had and buy with cash! This is my favorite rule. I love deals. I believe there is always some sort of discount or bonus to be had; we just have to be patient and/or creative to find it. For me, I used eBay. I found a refurbished model from a reputable seller (research people!) for less than half the price I would pay at a store, including shipping! And, it was in the price range we could afford! Woot!

We had also budgeted for this purchase because we don’t believe in using credit for a consumer purchase like that (for the record, everyone is different, but unless it’s a necessary car or a house, we only buy cash or we don’t buy at all), so we spent the money and a few days later, my beautiful kitchen aid mixer had arrived!

Commit to the lifestyle change. Now, this goes back to the first rule. You bought the product, now make it work for you! Some products that have earned their keep for us include our chest freezer (we can buy bulk meat and save a bundle), my sewing machine (it more than earns its keep), our children (they have washed the lower half of my walls every week since they were old enough to hold a rag and rub it all over) and of course, my beloved mixer. I’ve had to make a conscious effort to use the mixer, but it saves me so much money. I bake bread weekly, we bake cookies instead of buying at the store and soon we will be able to grate our cheese (therefore making bulk cheese purchases more worthwhile) and veggies and grind our own wheat! And we keep coming up with more ways to use that mixer!

If you do the research on any expensive item (and only you can define expensive), find the deal, commit to using it, you will find that these big ticket items will save you more money in the long run and make themselves and worthwhile and even beloved members of the household. If you’re a freak like me who talks to and names appliances, that is.

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