A friend of mine is a penny-pincher; he watches prices like a hawk and pounces on businesses that offer a lower price. For example, he will drive an extra 10 miles to find a gas station with the lowest price per gallon in the area. Assuming a purchase of about 15 gallons at 3.89 versus 3.94, he will save 75 cents. His car gives him 18 miles a gallon, so to get to the cheaper gas, he will use an additional half-a-gallon (approximately) to get there, at a cost of $1.90; he will end up spending $1.15 more than if he had bought gas at the more expensive gas station.
We all make that kind of mistake, though we probably won't drive 10 miles out of the way to save 5 cents a gallon. Here is a list of savings (!) that turn out to be just the opposite.
Cheap vs. Expensive
One lesson my wife and I have learned throughout the many years of shopping is: Don't buy cheap; it ends up being more expensive.
Quality costs more, but it also lasts more. If you have small kids, buy quality. When the child grows out of it, you still have a good garment that you can give to the next in line.
The same applies to the washer and drier, to the ceiling fans, to the A.C. and to the family car. Do the research; the Internet nowadays allows you to find out which products are recognized for their quality and which are not. The money you save today will hurt you in the long run if you have to replace the fridge after 2 years.
Buying from T.V or the Internet
One simple piece of advice: Don't do it. The products they announce as modern marvels not on sale in stores are usually things you don't need or very low quality items. Besides, you can find them in specialized retail stores within a month if not sooner: Just like on T.V. is the sign prominently displayed.
If you can't touch them and kick the tires, you have no idea what you are getting into. Plus the consequences: They will never leave you alone once you made the first buy; you'll be swamped with “special” offers through e-mail or on the phone.
P.S. If the item you receive is not what you wanted, you are going to have a deuce of a time returning it.
The Psych Factor
A good salesman is able to exploit the weaknesses of his client. If he feels that you are afraid of confrontations, he will pounce on your psyche to make you sign on the dotted line. Salesmen have to fulfill their quotas and they don't care if you can afford the house or the car. They will push and push till they make the sale.
You, on the other hand, may be reluctant to ask questions, or even to contradict his statements. After all, he is the "expert", and you are just an amateur.
Wrong! You are about to sign over to him the next 5 to 30 years of your earnings (car vs. house). Why do you think that so many homes have been repossessed? Why the housing/mortgage bust? Because people, innocent dumb people, believed the salesman, did not read the fine print, did not prepare adequately for the occasion, and discovered too late that they could no longer afford the payments.
When you feel ready to buy a car, a house, new furniture, or make any large expense, you must steel yourself to resist the pressure from salesmen; practice at home, with family members, until you are ready to get what you want, not what the salesman wants. You must be prepared to go home empty handed, if your conditions are not met.
Real life is full of "sharks", ready to eat your hard-earned money. You'd better develop shark repellent in a hurry, if you don't want to lose your dollars, thinking you saved a few pennies.
