False Economy

Being frugal does not mean always buying the cheapest alternative, but rather getting the most value at the lowest cost. This takes a little more thought but is worth it. Take food for example. It may appear that the frugal choice for food would be a diet of 99 cent fast food items, or macaroni and cheese from a box. But that would be incorrect. This is because there is a nexus between diet and health. And poor health is very expensive. My conclusion is that it is more frugal to spend what it takes to get food that will keep me as healthy as possible. Knowing what to buy takes a certain amount of effort. It may also mean exploring alternative methods of acquisition (such as gardening, raising chickens. etc.).

This principle also applies to buying consumer goods, the ones you buy new in particular. The United States is awash in cheap imports that fall apart very quickly. If you buy six pairs of socks at Walmart and they develop holes in three weeks is that really more economical than buying two pair at REI that will last for about five years? I think not.

If you just recently hit a financial bottom you may not have a choice for a little while. You may have to subsist on macaroni and cheese and buy just one pair of cheap socks, because that is simply all the cash that is available. But, as you pull yourself out of the hole, improving the quality of your diet should move to the front of your spending plan. Because you really can’t afford to get sick, or even to lose your energy. Rebuilding your economic base can be exhausting. After awhile you can start doing a real cost/value analysis again. The sooner the better, because false economy can be a very expensive trap.

If you have a cash flow and are making the best use of it, always ask yourself if the choice you are about to make is the best one. Beware false economy and do the work to factor in all the variables. How long will the purchase last? What else is it connected to? If an item is very low price, why is that? What else is out there? An example in my life is my computer. At the time my last one failed I was flat broke. Yet I need a computer to do my work. After four months of using other people’s machines I had just enough to get a new computer. After looking around, the best deal appeared to be a Best Buy floor sale. It was an un-opened Dell that had been on the floor for four months. The price was exactly what I could afford at the time. What I didn’t take into consideration was the Vista operating system. I have wasted many hours repairing this machine when it crashed. You can be sure that next time I will do my homework and spend a little more to get a lot more. And so should you if you are truly frugal.

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2 Responses

  1. Annabel, This is all so true. I love your blog. Keep up the good work.

  2. Hi. Cool article. There is a problem with your site in chrome, and you might want to check this… The browser is the market leader and a huge component of other people will omit your fantastic writing because of this problem.

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