Wednesday, March 3, 2010

Buying to Meet Your Needs

One way to save a whole bunch of money is to buy in a way that meets your needs instead of buying the "absolute best" that is available. Here's some examples:
  • When I buy a computer, I buy my favorite brand (HP) but I never buy a top of the line computer. Because I don't do any gaming on my computer or crunch PhD level numbers, I get by just fine with what equates to a bargain basement computer which has everything I need to do the (mostly writing) stuff that I do. I know "tech envy" can drive people to think they need every possible bell and whistle on their computer, thus leaving them with a $2,000 machine that will be obsolete practically before they get the thing unwrapped. Don't let this happen to you. Know what you need before you shop for an expensive item and stay true to your list instead of having your head turned by a convincing salesperson and the shiny new models that are on display.
  • Vacations can cost as much or as little as you want to spend. I know very wise people who spend like maniacs on and for their vacation. One friend has to have an entire new wardrobe when she goes on vacation. She totally doesn't get that the people who see her on vacation have never seen her before and will never see her again and therefore they wouldn't even know that the clothes she was wearing were worn for a month instead of bought the day before she got on the airplane. If she were buying to meet her needs--to have fashionable clothes to wear on vacation--she would actually end up buying nothing because all of her regular clothes are just fine for vacation. Ditto for places to stay (a multi-thousand dollar time share is most often overkill when compared to the cost of a basic hotel), places to eat (most cities have great ethnic areas where food is awesome and cheap; the five star restaurant is definitely a "want" and not a need). and modes of transportation (first class and coach passengers tend to arrive at their destination at the same time, even though one set of passengers has spent a whole lot more money for their seat).
  • Food is a huge area where money can be spent to meet your actual needs and not the fictitious needs generated by the advertising companies, thus saving you $$$. For example, you need to feed your kids breakfast. An egg and toast or oatmeal are wonderfully nutritious and cheap breakfasts. Frosty-fruity-look at the toy in the box cereals are not only hugely expensive compared to oatmeal or eggs but they are much less nutritious. Ditto for the steak you can buy on sale compared to the steak you spend and arm and leg for at a five-star restaurant.
  • Consumer items are infinitely flexible when it comes to price vs. needs. The last season jeans which are cheaper, and look just like, this season's jeans are a bargain. Finding them barely used at the thrift store is an even better bargain. And the two year old Mercedes as opposed to the brand new Mercedes that drops a quarter of its value as soon as you drive it off the lot can be a bargain if you absolutely need a Mercedes (otherwise go for the highly rated, used generic car that will serve the purpose of getting you where you need to go).

The bottom line is that if you spend your money to meet your actual needs as opposed to the needs you see expressed on TV that are meant to separate you from your hard earned cash, you will not only have met your needs but also have some money left over.

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