How to Really Save Money When You Shop
I assume we all sometimes feel the urge to mock people who think that they "saved money" when they bought something at a discount. They buy some exercise equipment or new shoes and are pleased with themselves for "saving $60," even though what they really did was spend twice that. But there is a valid way to save money with a purchase. Hint: It has nothing to do with a discount. (See also: 25 Things to Never Pay Full Price For)
What really works is to make a purchase that lets you produce something, or make a purchase that lets you avoid consuming something.
The first examples that come to my mind have to do with producing or saving energy:
- Insulation or weather stripping
- Warm sweater
- Fuel-efficient car (or motorcycle or bicycle)
- Energy-efficient furnace (or other appliances)
- Solar hot water heater
- Photovoltaic power system
All but the last of those have a payback time that's pretty quick. And those are just some obvious ones. There are all kinds of things that might qualify, depending on exactly how you use them.
Tools are another example — although only if you're actually going to use them to make or fix stuff that you'd otherwise buy or replace. Because so many things are made to be replaced (rather than repaired) these days, tools to make or grow stuff are often a better bet — knitting needles, for example, or garden tools. I got a pressure cooker a few years ago that has probably already paid for itself by saving energy and letting me make good use of cheaper ingredients (not to mention providing vast numbers of yummy meals).
Sometimes it makes sense to buy things you'd otherwise have to rent repeatedly — but not very often. For example, there's a movie that my wife and I like to watch every year. After renting it for a couple of years, we bought our own copy. It was really a matter of convenience, though. Even at just $12 or so, the payback time for the investment is pretty long.
Finally, I want to mention financial investments. Most people seem to treat them as a special case, but as far as I'm concerned they fall squarely into this category — you spend money to buy a stock or bond, and you receive money in the form of interest or dividends (and potentially a capital gain when you sell the investment).
Do you know other ways to save money with a purchase — that is, really save money?