How do you make a purchase? Do you shop at the store or site with the cheapest price? Best service? Most established brand? Renown quality?
Recently my wife bought shoes from Zappos. Usually, they do free shipping. However, on her order, just for the heck of it, they sent her an e-mail thanking her for her business and letting her know they upgraded the shipping to over night for free. Keep in mind, my wife isn’t a regular shopper there, her order wasn’t big, and she didn’t do anything special. Zappos just did it…because.
Even if they aren’t the cheapest, they will get our business again. (And note that the experience was good enough to share with others, and it wasn’t even mine).
How do you decide who to buy from?
To all who bank with us, another credit union, or some other financial institution who cares about you, thank you. To those who don’t; why not?
I freaked out the other day when I got home and to my dismay, pushing the power button on my computer elicited…well, nothing. It would start up for about two seconds and then just turn off. Turns out we had a power outage earlier in the day and something got fried. Fearing that I had to buy a new computer, or that I potentially lost ALL of my files, I spent the next five hours troubleshooting, Googling, and calling friends that might have an idea what was wrong. In the end, it was only a bad power supply. In non-techie language, that means I didn’t lose any files and didn’t have to buy a new computer; I just needed to replace one part.
The whole fun-filled ordeal was actually my fault in part because when I bought the parts for my computer, I bought a low-quality cheapo power supply. Rather than spending an extra $20 bucks initially on a good power supply, I now had to spend an extra $80 to replace the dead one.
Sometimes the best way to save money is to spend money. Over and over lately I have been learning the age old lesson, “buy it right or buy it twice”. It can be so tempting to buy cheap when it comes to water heaters, mattresses, running shoes, appliances, cars, computers, etc, but in the end it almost always pays off to buy quality goods over the cheaper models. They are cheap for a reason…
I continually run into people who want to get a dog but don’t know the best place to look. They usually have no concept of how much it will cost either. Most people are shocked when they find out they can get a great pet for the price of an iPod Touch. Here’s the scoop:
1. Check out http://www.puppyfinder.com for new and used dogs (ha).
2. Adopting a pet usually saves a ton in medical bills since most of the time they come with shots and are fixed.
3. Mutts are often times healthier than pure breeds, and thus cost less to purchase and keep.
4. A dog usually lasts a lot longer than an iPod (hopefully).
5. If you’re wondering about the cost of pet maintenance…how much do you spend on iTunes a month?
6. iPods don’t greet you when you get home (maybe in a couple of years…)
Dogs (or any pet for that matter) are a lot of responsibility, something that is often overlooked in the excitement of trying to find one, but they sure make a great present and might not cost as much as you think…
Buying a house is a huge decision (at least it should be). Statistically, over the last 50 years houses have gotten bigger and families have gotten smaller. Like so many other things, we now feel that we “need” a huge half-empty house. There can definitely be an upside to owning a ‘big’ house (which is why people do it), such as more space, guest rooms, specialty rooms, long term investment, etc. However, bigger isn’t always better.
I used to always want a ‘big’ house until recently. Thanks to a blog post by Frugal Dad, I realized that with a small house:
There is less to clean
Potentially lower property taxes
Smaller mortgage (and quicker to pay off)
Less furniture is needed to “fill” it
Easier to live off one income
Less isolating from family
Lower utility bills
…and all of that equals LESS stress and MORE freedom; the two things we so often forget to examine in our lives because we can’t see them. What do you think?
Remember long family car rides? Kids always ask how much farther it is, and parents always reply, “Just over the next hill”. Sometimes it seems like people have the same reaction with their finances. When asked how much money is enough, most people say 10% more than they have (regardless of their class).
Will you ONLY be happy when you earn X, weigh Y, or have Z? Does happiness really come just over the next hill?
More often than not, things are most expensive when they first come out. You pay the extra money for the novelty of being first, cutting edge, maintaining a certain image, etc. But how much would you save if you waited until the price dropped? Whether a newer model is released than the one you want, or a sale is coming down the road, you will almost always spend less when you wait.
There was a psychology experiment done years ago on children that tested their ability to delay gratification. Children were given a marshmallow and told they could eat the marshmallow right away, or if they waited five minutes, they would be given a second marshmallow. Eat one now, or eat two later? Can you guess what the children did? What would you do?
It’s easier to go out for lunch instead of packing one. It’s easier to just swipe your card rather than budget. It’s easier to use credit than to show restraint. And it’s also easier to feel anxiety after you do those things rather than peace.
Are you trying to acquire “stuff” or “freedom”? Would you rather sit back and marvel at everything you have, but have little savings, or choose to have less and instead be free to do whatever you want with your time and energy?
The hard road is usually the good road.
For some, this post will be a glorious act of confirmation. For others, a bubble-bursting, eye-opening, wake-up call.
Maybe you only have $500 bucks in your savings account and you feel broke. Or maybe you have $30,000 and you think you have nothing to worry about. Either way, as much as we draw anxiety or comfort from the number on our monthly bank statement, there is another number that will tell us the truth; and nobody will tell you that number. You’ll need to figure it out on your own. It’s called net worth.
You have probably heard that number before, but have you ever calculated it? Take all of your assets (the value of what you own like your car, house, etc, plus all bank and retirement accounts and cash) and subtract your liabilities (your debt; all your loans and anything you owe money on). The goal is to have a positive number, and to watch that number grow in time.
Net worth is the true measure of financial well being. A doctor might have a huge house, two nice cars, and 50k in the bank. But he might owe 250k for his student loans, not own the cars, and have barely made a dent in the mortgage. Technically, the bum on the street is more well off than he is. Material possessions only give the appearance of wealth.
The sooner you find out your net worth, the sooner you can realistically work towards financial freedom. And THAT is the goal.
I don’t think I need to spell out the lesson here. Funny how the pursuit of money isn’t always (rarely, actually) the same as the pursuit of happiness.