Every day I’m bombarded with choices. I’m faced with the choice of choosing quality vs quantity.
One amazing patisserie cake or two grocery store cakes. Two pieces of IKEA furniture or one piece at West Elm. McDonald’s vs anything else. That McDonald’s at the end of my street really isn’t good for my waistline.
But quality vs quantity may not be the best way to look at the choice. Ultimately I’m making a choice of what is going to give me the best value for my purpose.
The more often I expect to use something, the more likely I'm going to choose quality.
Consider my choice of smartphone. I choose a quality built product like an iPhone because I know I’m going to use it every day, several times a day, hopefully for 3+ years.
If I’m buying dishwashing detergent, then I’m more likely to choose a commodity type of product that will give me a high amount of uses for the lowest price. Even though I'm going to use it every day, the difference in performance isn't likely much different at the top and bottom end price.
Quality Hand Bags
My wife is in the market for a new cross-body handbag. She bought her current bag about 4 years ago and has used it almost every day. As a result, it’s taken some wear and tear. At the time it cost about $800. Given the frequency of use there is value in choosing and paying for a quality product. As we pass through airports, we continue to look for the perfect bag at the right price.
A high price doesn’t always = quality, or equal the desired product
My wife has tried plenty of bags that cost more than $800 but none have convinced her to buy, even before looking at the price.
The rules I’ve adopted when making a purchase are:
- If it’s something that’s a one time use, then go for commodity product
- If it’s something that’s a long-term use, then go for quality
- When looking for quality, look for the good “gut feeling”, that “wow factor”. No point spending money on something you aren't impressed by.
- Then look at the price and consider how many times or years you will use it for and determine the “per use” or “per year” price.
- If you can justify the “per use” or “per year” price against an alternative cheaper product that you would have to replace more often, then maybe it’s the right purchase.
- If you don’t know yet how much you will use it then think about it more.
I want an espresso machine, but I’m not sure yet how often I’ll use it since we have never made coffee at home yet. I want a toaster, but we’ve only eaten bread at home a handful of times in the last year. I want a sound bar to amplify the music from my iPad, but I’m not sure the improved quality is necessary.
This is my process. Walking step by step through the process every time I want to buy something helps me be several times more thoughtful with how I spend my money. It ends up delaying the purchases I make, showing me that I can live without them. More than half the time I end up not buying anything.
Saving Money requires rules that prevent you from making unnecessary purchases. But it shouldn’t stop you from making necessary and life-improving purchases. These rules help me be more intentional with how I spend and save my money.
Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.