How Spending Money Can Actually Save You Money

October 4, 2007

I’m not one for spending money.  It’s actually one of my least favorite things to do.  However, there is something to be said for preemptive spending that can help save you time and money.

The Crisis
The story begins like this. I arrived home late yesterday evening after a long, horrible day at work to discover the router in our small home network was kaput.  This is a huge problem for me since I spend many hours a night working online so I needed to get up and running as soon as possible.

The Unprepared Scenario
The plot of the story could have been a stressed-out, frustrated guy racing around an electronics store before it closed looking for a good deal or maybe spending the next day at work shopping online and placing a rush order on a router.

When you need something in a hurry the objective shopping and price comparison process can go out the window.  You’ll likely spend more than you want in order to buy something you’re not quite sure is what you’re looking for.  Top it off with expedited delivery if you’re shopping online and the costs of a crisis can really add up.

The Strategic Shopper Scenario
Luckily for me, I had done some preemptive shopping so the story has a happy ending.  Don’t get me wrong, I didn’t make a specific trip looking to buy something, shopping trips aren’t usually my style.  I happened upon a great deal for a Belkin wireless router when a local store went out of business and I snatched it up to store for future use.

Upon diagnosis of a dead router, I made a trip to the storage room and had the new router up and running in 15 minutes. Since I wasn’t scrambling around in crisis mode I didn’t have to spend a premium to get new equipment quickly, even better, I bought it ahead of time for a big discount!  Plus it allowed me to barely miss a beat in my work, which is worth some money itself.

Strategic Shopping Questions
Of course you don’t want to overdo it and spend too much on strategic shopping.  The key is whether an item will save you time and money down the road. Here are some questions you can ask when considering making a strategic purchase:

– Will the item need to be replaced or upgraded in the future?  If so, you’ll have to buy it eventually, why not buy it now for a good deal?

– Will your purchase hold its value?  How long can you keep the item in your storage area without it becoming outdated and unusable?

– Is it a large enough discount to make it worth your while?  The percentage or total dollar amount of savings is up to you.

– Can you store it easily?  Where will you keep the item for an extended period once you bring it home?


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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9 Responses to How Spending Money Can Actually Save You Money

  • Ben

    It’s always nice to have a plan B mike.

  • Mike

    My experience with electronics is that you can alright by upgrading at sales and saving the older equipment in case of emergencies. I’m just now picking up wireless G in my house and I’ll be keeping my wireless B router around should calamity strike.

  • Ben

    I agree, electronics aren’t the best example because they can become dated quickly but this fit three of the four criteria I mentioned:

    Will the item need to be replaced or upgraded in the future? – I knew I’d need a new router pretty soon, plus I needed/wanted a wireless one so I knew I’d use it.

    Is it a large enough discount to make it worth your while? – Yes, I bought it for $19.99, retail is $59.99.

    Can you store it easily? – The box fit easily on a shelf in my basement.

  • Mrs. Micah

    While people point out that it may not have saved you money, it certainly saved you stress. And less stress is worth something in itself.

    I am in favor of such things, though I think Sean’s suggestions of nonperishable, non electric things make the most sense. Some computer-related things, like CD-Rs, if you use them and they’re having a big sale, also seem like a good idea. I probably wouldn’t have bought the router unless it was on a big sale.

    But good going with this! There are definitely a lot of places where spending money can save money. 🙂

  • Robert

    It’s a good concept, but not a very good example. There’s no evidence (given) that this router purchased was cheaper than current store or mail order price, though you were saved the potential hassle / time factor of each. For these types of items though, you run the risk of not using them and wasting your “investment” whereas other items mentioned like linens and towels are much better suited for it. They don’t perish and you don’t have to worry about them not working right out of the box, either.

    For electronics, a good example would be buying some redundant storage saving you money by preventing crucial data loss to your business or something similar.

  • Sean Owen

    Nice post, Ben. I’ve often argued that you can save money buy buying things when you don’t necessarily need them, but know for certain you’ll need them in the future, and spot a great deal now. Clothes, bed linens, and other items that can wear out from use but aren’t perishable on the shelf all work well.

    If you wait until you need something right away, you’ll often end up paying much more for it. I call it the “now premium.”

    The Million-Dollar Dime.

  • Mark U Runta from Smart Investing & Money Management

    Good strategy but in my experience has limited use when it comes to consumer electronics. Three factors which dissuade be from stockpiling are (1) usually electronic products last a while
    (2) by the time I need to buy a replacement there is a newer model or a different product available and
    (3) prices point on such products erodes rapidly (like the iPhone).

  • Meg

    This is a good point–one that underlines the benefits of having a “gift closet” and/or a selection of greeting cards on hand at all times.

    Those things are always needed throughout the year, will not lose their value or become obsolete, and often are on sale–but never at the time you actually need one.


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