Wednesday, June 3, 2009

Invest In Products That Last

Saving Money Tip #149 - Invest In Products That Last. When spending money on things, invest in the future. Buying things that are just one time use are often not the best use of your money, unless of course you will never use that item again. Instead, buying things that can be used over and over will give you a better bang for your buck, even if the initial outlay seems to be high.

For example, buying a one-time use camera each time you go on vacation or to an event seems foolish. At $5 or more a pop, you will have spent $100 after just 20 events. Instead, spend $100 on a camera that will last for years. After about just one year of use, the initial outlay will be much less than paying for a camera each time you use it.

What if you want to do an activity that will give you exercise and get you back to nature? You could easily rent a kayak or canoe or bike each time you want to go out. And until you figure out what it is you are very passionate about, that makes sense. But once you know what you like, it usually makes sense to buy the item, even if the initial outlay seems expensive. The cost of initial outlay of maybe $300 for a bike might seem high. However, bikes can easily last 20 years. The cost of renting, while the outlay each time is lower, would cost much more in the end.

Of course there are many times where buying one-time use products or renting would make sense. If you don’t plan on using a product very often then renting may be a better financial move. Or if you truly will only use a product one time, then go for a one-time use product to save money overall. But once you figure out that there is a product that you will use on a regular basis, then it makes sense to spend more money upfront for a good quality product that will last a long time. This idea can be applied to big items such as cars (buying versus leasing), homes (buying versus renting) or everyday items such as batteries (investing in rechargeables that can be used over and over versus buying regular ones that are one time use). Think long and hard about the item in question before you make the big purchase. But when you figure out it’s an item for the long-term, then the higher initial outlay will end up costing you less down the road.

In Real Life (IRL) – I recently started riding my bike again after a short hiatus. I rode it up the grocery store yesterday to pick up a few things. And the minute I got back on my bike, I felt at home. I bought this bike about 15 years ago! I bought it brand new (this was before the days of Craigslist or I’m sure I would have looked for a deal on there). And I purchased a nice, mid-level quality bike from a bike store for about $275 along with some extras. That $300 investment took me on bike rides throughout the countryside week after week all spring, summer, and fall for about 3 years. Each summer, I brought it to the beach with me for our family’s week-long summer vacation. Now I bike it around town for errands or for short rides with my children. The upkeep costs are minimal and I expect it will last another 10 years or so.

Was $300 a good investment for me? I think so. It wouldn’t have been plausible to rent a bike each time I wanted one. And while I could have bought a cheaper bike from a store like WalMart, it wouldn’t have held up as long or been as easy to ride. It has saved me from renting a bike at the beach and paying gas for short car rides when a bike will do. It has given me entertainment over and over again with each bike ride I go on, saving me money on alternative forms of fun. And its useful life isn’t over yet. Investing in this quality bicycle has saved me money over the long-term.

Another item we have invested in is a steam cleaner. At first we were renting them from the grocery store for $20 each time we wanted to clean our carpets. The costs added up. Instead, we got a steam cleaner (which was actually free) that needed some fixing up. My husband bought the replacement parts and now we own a very good steam cleaner. Even buying one new for a couple hundred dollars would have been worth it. We steam clean our carpets about four times per year. In about two years, an investment in a new cleaner would have paid for itself over the cost of renting one at the market.

Last example is our moonbounce. Even though we only paid $25 for it at a thrift store, we would have easily saved money by buying one new for $250, as well. For each birthday party we have at our house (3 parties per year), we set up the moonbounce. For a carnival camp we held at our house, we set up the moonbounce. On long holiday weekends or when friends from out of town are visiting, we set up the moonbounce. While we wouldn’t have rent one for each of these occasions, just three rentals (once per each child’s birthday) would have cost more than the initial outlay we would have spent retail. And it saves us from having to purchase other entertainment for our kids.

While I know it doesn’t always make sense to make big investments in products, it oftentimes does. It pays to do your research and know truly how much you will be using your product before you buy it. But once you determine that this is a product that you will use for many years, it makes sense to put up that high initial outlay and then reap the benefits later.

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