You have heard it said around the time of the big sale that the more you spend, the more you save. That is a poor justification for irresponsible fiscal behavior.
It is the battle cry of the person running for their lives with financial issues hot on their heels. Just because something is on sale, doesn’t mean it needs to be bought. We could improve that saying a great deal with a small modification:
The more you spend, the more you need to save.
That’s better — not perfect, but better. Saving works both ways: You should save as much money as you can in a proper savings account. And you save as much money as is wise when making purchases.
Table of Contents
The Best Price Isn’t Always The Best Deal
Believe it or not, there are situations where prioritizing price is not wise. It might be penny-wise. But that often pairs well with being pound foolish. And that is a pairing you want to avoid. The trick is knowing what situations call for deprioritizing immediate savings.
What you hope to do is spend a little more upfront and reap huge savings on the back end. But that is something of a gamble that does not always work out as planned. Sometimes, a venture is expensive on both ends.
That is perfectly okay because the return cannot always be measured in dollars, but it can still be measured in good sense. Here are a few examples:
Working With A Professional: Estate Planning
Some things are just complicated enough to be a toss-up with regard to bringing in a professional or doing it yourself.
Take estate planning for example. Sure, you could get an app and do estate planning without any help. But you might get tripped up by something like the difference between a revocable trust vs irrevocable trust.
Are you certain you understand the difference between a trust and a will? Are you clear on the assignment of a beneficiary vs. a contingent beneficiary?
Bringing in a professional can not only clear these matters up, but it can also help you find savings of which you were unaware. Making the wrong decisions can be quite costly in the long term. We personally used YourEstateMatters.
Working With A Professional: Tax Preparation
Tax preparation also comes to mind. Why should you pay someone a commission when you can do it yourself and keep the entire return? For the answer, just check in with those who found themselves on the wrong end of an audit.
Indeed, you might not make a mistake and everything will be just fine. But the little extra you pay will pay off in peace of mind if not in cold, hard currency.
Eliminating A Future Bill
Buy now, pay later is all the rage. Unfortunately, that is not a very good thing for many people. Retailers would not offer it if they didn’t see an opportunity to make a lot of money.
With those deals, you have a set amount of time to pay back the full amount. If you fail to do so in that period, it quickly gets expensive.
The better deal for more people most of the time is to buy now, pay now. You will not get to enjoy the upfront savings. But you will get that future bill off the table. There are no payments to forget about or get delayed due to unforeseen circumstances.
Never having to deal with a future bill for something you will have forgotten about by the time it is due is worth a larger up-front payment.
I mentioned my thoughts on Buy Now, Pay Later in the article from Business Insider.
When The Benefit Is Too Good to Live Without
Going to college is one of the best investments of time and money. It also is a terrible investment for some individuals. The most likely outcome of completing your college degree is that you will have an easier time getting better jobs that pay more for the rest of your life than if you don’t go.
If none of that happens, you still get a quality education that can only result in you being a better version of yourself. You can’t put a price on that sort of thing. When the benefit is too good to pass up, leap, even if it costs you a little more to do so.
In Conclusion: You Get What You Pay For
Dealing with issues professionally, eliminating future bills, and becoming your best self are all good reasons to prioritize the benefit over the momentary savings.
Next Up From ChaChingQueen
Greg is a Chartered Financial Analyst (CFA) with 22+ years experience in Financial Services. He has held numerous FINRA Securities licenses (series 7, 63, 65, and 66), and is an expert on Investment Products and Financial Planning. Greg has 22+ years experience as a real estate investor and degrees in Psychology and Philosophy.
Greg has been quoted/interviewed in Yahoo Money, Yahoo Finance, USA Today, Authority Magazine, Realtor.com, Business Insider, and others.
Greg is an avid runner, and the father to identical twin girls and their awesome brother. His love of budgeting and his kids led him to join The Great Resignation in 2021.
Disclaimer: Any Financial Tips on ChaChingQueen are general and informational. Speak with a professional about your specific situation.