Personal Finance Advice

If you have been reading this column for a while you know that you shouldn’t always turn to the cheapest insurance possible because it can cause real problems for you when the time comes to make a claim.  On the other hand, you also know that you should try to save money wherever possible, so it really is a fine line when you’re making purchases and signing up for services because your first inclination may be to look directly toward the least expensive option.

Here is what you need to know: Cheaper doesn’t always translate into the best deal possible.  In fact, sometimes paying a little extra for things will ensure that you indeed get the best deal for your dollar, but it depends on each individual situation.

Here are some examples of when automatically choosing the cheapest option isn’t always the best deal:

Clothing and Furniture:  If you buy the cheapest clothing and furniture possible all the time then you’re probably going to spend a lot less than the other customers at the store, but you’ll probably be back more quickly than they will too.  There is a case to be made for paying a little more for quality instead of thinking that getting the cheapest thing will save you money in the long run.  For example, a $8 sweater from a clothing store may seem like a great idea at the time of purchase, but after it’s fallen apart from the second time through the washing machine then you may have wished you had bought the more expensive version that would have lasted much longer.

Cars:  While it is true that you want to negotiate for the lowest price possible when buying a car, this does not mean that you should seek out the cheapest car on the lot or within the classified ads and then automatically assume that this car is the best deal.  Some cars are cheap for a reason; they are not made well and don’t have hardly any features to make the drive more enjoyable.  There is nothing wrong with driving a nice car…as long as you negotiate the lowest price possible and can actually afford the payments.

Dwellings:  If you’re looking for a house to buy you certainly don’t want to go looking for the cheapest house in your neighborhood, and if you’re looking for an apartment you shouldn’t walk into the leasing office and ask for the cheapest one available.  Houses and apartments are marked down for a reason.  Maybe the amenities aren’t so great or the location is undesirable.  While you do want to try to find ways to spend as little as possible for housing costs, you don’t want to assume that the cheapest option is going to be the best one.

Services:  Whether it’s paying for cable or hiring someone to clean out your gutters, cheaper isn’t always better.  In fact, when it comes to buying recurring services like cell phone service or cable, you might get much better service and options for just a little more money, making the extra expense worth it.  When you hire a service to do something for you then you usually get what you pay for.  Hire a licensed and bonded service to aerate your lawn and you’re probably going to have a much different result than if you hire a teenager in the neighborhood who has never even heard of aerating before.

You get what you pay for, and while it’s important to save money whenever you can, it’s also important to be happy with the things you buy.  Clip your coupons and do comparison shopping, but don’t assume that the lowest price is always the best deal.