When you buy something, how do you decide whether it’s worth your money? For example, say you’re thinking about upgrading your smartphone. Do you splurge on the latest model, settle for the more affordable previous generation model or skip buying a new phone in hopes that your current one will last another year?
Having a decision-making system to help you figure out these sorts of purchasing conundrums is a great way to ensure you’re getting the best value for your money and avoiding unnecessary expenditures. Learn when it’s time to splurge, settle or skip some purchases altogether.
Last updated: Oct. 10, 2019
Money expert and Wallet Hacks founder Jim Wang said it’s worth it to spend more on some big-ticket items to ensure that they stand the test of time. “I generally splurge on anything that I expect to last more than five years,” he said. For Wang, that includes appliances such as a stove, dishwasher, washer and dryer, and even a grill.
If you’re going to shell out hundreds or even thousands of dollars on an appliance, spending a little extra to get a quality product that will last makes sense. But that doesn’t mean you shouldn’t look for opportunities to save money on big-ticket items, such as during Memorial and Labor Day sales.
Splurge: Meat and Produce
Spending extra on food can be money well spent. “I want higher quality meats and produce because it’s what my family and I will be eating, and we appreciate higher quality,” Wang said.
However, Wang said he saves money on meat by stocking up when it’s on sale. “I am a sucker for stocking up whenever there’s a sale on something we usually buy,” he said. “So we might buy the marked down meats because they’re ‘expiring’ in two days but we can cook them tonight or freeze for later.”
Splurge: Apparel With a Quality Guarantee
It can be worth it to splurge or pay full price for quality apparel you know you’ll wear often – especially if it comes with a lifetime guarantee or no-hassle return policy. For example, Lululemon athletic wear can be a splurge because it costs more than similar apparel you can get from discount retailers. But consumer savings expert Andrea Woroch said Lululemon workout gear comes with a lifetime warranty and can be replaced if it tears or doesn’t perform as promised. “If you exercise regularly or wear these types of clothing for leisure and you will wear it often, then the cost per wear for a quality item that will last is very reasonable.”
Splurge: Designer Denim
Smart shopping expert Trae Bodge loves a good bargain but said it’s worth it to pay more for higher quality jeans. “I find that cheap jeans don’t tend to fit as well, or hold up as well as more expensive jeans,” said Bodge, who shares money-saving tips at TrueTrae.com. “I’m not talking $500 jeans, but investing in jeans in the $100 to $150 price range is worth the investment.”
Splurge: Beauty Products
Just because a beauty product is expensive doesn’t necessarily mean it works better than lower-priced options. But spending more for a product that delivers can be worth the money.
“I’ll pay more for beauty products that work for me,” Bodge said. “My skin is sensitive and a bit fussy, so if something makes my skin look and feel good, I’ll do it. Like with jeans, however, I will not pay hundreds of dollars for a serum, but I will buy something beyond the drugstore.”
Settle: Convenience Purchases
Settling for a lesser quality item or a slightly more expensive item can make sense if it means saving time. “Typically, I settle because of convenience,” Bodge said. “For instance, if I need something and my favorite brand is several towns away but a fairly comparable brand is local, I’ll often opt to stay local,” she said. Bodge also is willing to pay more occasionally if it saves her the time and effort of driving farther to get an item for less.
Settle: Items With a Shorter Lifespan
Spending more on items that you expect to last a long time can make sense, but Wang takes the opposite approach with things that have a shorter useful lifespan. For example, he said he’ll settle for lesser quality to get a lower price on items such as exercise or everyday shoes because he knows they tend to wear out within a year.
Settle: Items That Are Consumed Quickly
For items that are used quickly such as paper towels, napkins, soap, shampoo and other personal care items, Wang won’t spend more just to get better quality. Instead, he’ll settle for whichever brand is on sale or can be purchased in bulk for a lower price at Costco or a similar warehouse club.
Settle: Trendy Items
Trying to keep up with the latest trends can get expensive if you’re paying top dollar for brand-name apparel and accessories. But if it’s going to go out of style soon, Bodge sees no reason to splurge. “If something is trendy and I assume that I won’t wear it for more than a season or two, I’ll settle for a cheaper, lower quality brand because what I really need is ‘fast fashion,’” she said.
Settle: Air Travel
When it comes to air travel, you should settle for the best flight at the best fare. That can mean taking an early morning or late-night fly with layovers to save money. But it also can mean paying a little more for a flight with more-accommodating departure and arrival times and no layovers if you’re traveling with small children. Wang said he looks for ways to save money on flights so he can have more money to spend on accommodations and experiences at his destinations.
Skip: Cheap Toys
If your kids are constantly begging for new toys, don’t assume you’re saving money by buying them cheap items to appease them. Wang said he skips these items because they can be a waste of money if they break easily. In fact, he said rarely buys any toys other than durable items such as blocks and building sets that can spur creativity.
Skip: Expensive Equipment That Won’t Be Used Often
If you have a home improvement project, don’t rush to buy expensive equipment you might need to tackle that project. Wang said that he rents equipment in these situations. “We do this because I don’t want to maintain equipment I use very rarely and because it takes up a lot of space,” he said.
Skip: Full-Priced Apparel You’ll Rarely Wear
It’s one thing to pay full price for an item of clothing you know you’ll wear often. But it doesn’t make sense to spend money on something you’ll only wear once or on special occasions. For example, you should skip the high-priced, name-brand ski jacket “unless you score it at end of (the) season for over 50% savings or you ski enough to make the cost worthwhile,” Woroch said.
Skip: Extended Warranties
If you buy electronics, appliances or other big-ticket items, you typically get the hard sell to pay extra to protect your purchase. But you should skip the extended warranty. That’s because the chances of an appliance needing repair during an extended warranty period are low and, if it does, the cost of repairs isn’t much more than the cost of the warranty, according to Consumer Reports.
Skip: Anything That’s Overpriced
It can be tough to resist the urge to keep up with the Joneses. But Bodge said you should skip items you covet if you know the cost is too high. “If a friend is raving about the best snow boots ever — or something along those lines — but they are a pricey, designer brand, I won’t even consider it, even if I desperately need snow boots,” she said. “Same goes with designer handbags, fancy cars, over-the-top vacation homes … pretty much anything that is overpriced, I won’t buy it.”
When You Should Splurge, Settle or Skip
Expert advice on when to splurge, settle or skip a purchase can be helpful. But, truly, much of this decision comes down to your values and personal preferences. For example, you might be willing to splurge on the softest, thickest two-ply toilet paper that’s on the market while others will settle for cheap, single-ply rolls (few if any would skip this purchase altogether). The key, though, is to ask yourself before any purchase whether you’re getting the best value for your money or whether your money might be put to better use elsewhere.
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About the Author
Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.
U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.
She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.