Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. (1 Tim. 6:17-18)

Thursday, November 29, 2012

Do You Calculate Value Versus Cost In Your Spending Habits?

Photo by Ryantron
Tightwad Philosophy

It can be difficult to spend money on beneficial, long-term, somewhat expensive items for those of us who have a natural bent toward saving money, paying off debt, and not spending money on frivolous stuff. Many times, people who are conscientious about their debt-free journey and wise spending habits have difficulty parting with money, even for stuff that would benefit them or their families in the long run. Many would call these people tightwads or extremely frugal in their spending.

I can relate to the tightwad way of life. I have a natural leaning this way. But, I'm also not into extreme couponing or thrift store shopping, either. I have my limits on when or where I can save a buck. I'm also willing to spend more money on certain items or services. I take time to weigh the value of what I want to spend money on versus the cost. Let me give you some examples.

Examples Of Calculating Cost And Value

Mac vs. PC: A few years ago, I made the move away from the PC world and went to all Mac from my computing needs. If I was a true tightwad, this would not have happened, because the price point of  Apple products is much higher. But for me, the perceived value of a better product enabled me to be willing to spend more money.

Food Choices: If given the option on where to eat lunch with a buddy on a specific day and the choice was between McDonald's or Chipotle, I'm picking Chipotle even though the price point is slightly higher. Why? Because I value the food as better for my healthy lifestyle. I don't mind paying a few extra dollars for a better tasting, higher quality, healthy lunch. Same goes with the grocery store. I don't mind paying a little more for healthy fresh fruits and vegetables. I value the long term benefits of healthy eating over the cost.

Personal Counseling and Coaching: Spending money for someone to listen to my problems or to push me to grow, are you kidding me? Yes, believe it or not, spending money to pay people to help you can be incredibly beneficial over the long-term. Let's say you paid a personal coach $10,000 for one year to push you in your career. And, in the process of your career growth, you made an additional $20,000 just in that one year. At the very least, you doubled your investment in that one year. Plus, there's a very high likelihood that you will continue to reap the benefits of that professional coaching for many years to come.

Car Insurance: We have an excess of car insurance ads on TV these days, all trying to lure you away from your present company to another one in order to save a few bucks a month. The question I always ask, though, is what kind of service are you going to get for the money you may be saving if you just happen to total your car? With my current company, I have received exceptional, quality service over the years. I value that more than saving a few bucks, and that's why I stick with them.

Do You Consider The Value In Your Choices?

So, how about you? Do you calculate the value of price points in your spending habits? Or, is your tendency to spend purely on the cheaper, lower cost items, no matter what?

If you do take the time to calculate the value on what you spend money, do you have additional examples to add to my list above? If so, I'd like to hear your stories. Share with us in the comments below.

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