If you want to have a good personal finance, you must learn to save money. Don’t spend money on things that aren’t necessary. Try to find lower price alternatives whenever possible. But now I want to look at the other side of the equation: is buying cheap stuff always a good choice?
Well, if you buy cheap stuff then of course you will spend less amount of money for the item. But I’d argue that it’s not always a good choice. In fact, simply finding the cheapest alternative out there is almost always a bad choice.
How can that be? How can it be that spending less money is bad? The reason is that you need to look at the total cost of ownership (TCO) of the stuff and not just the purchasing price. While you might save money at the time of purchasing by buying cheap stuff, in the long run you could actually spend more money.
Take buying car as an example. If you buy a cheap used car, you may need to spend more on maintenance later on. So you save money once when you buy the car, but you end up spending more in the following occasions. This is especially true if the car had a serious problem which – obviously – is much more like to happen to a cheap used car.
So be careful not to use price as the sole criterion in making your buying decisions. There are many other things you need to consider to decide whether or not something is worth your money. Looking only at one side of the coin is actually a good way to lose money – not to save it.
That’s one thing you need to remember when you’re about to buy something. Buying cheap stuff isn’t always a good choice. More often than not, it’s a bad choice to take.