One of the easiest ways we find ourselves in financial trouble is when we purchase items for a specific purpose or event. A wedding or a funeral for example. You may not have a suit or dress that will suffice so you head to the store or fire up your computer to purchase something you don’t need that will gather cobwebs in your closet from limited use.
A financial rule that has served me well is something called, “cost per use.” Regardless of how much something costs, I calculate how often I’ll actually wear it or use it. If the answer is a handful of times, I keep my debit card at bay and continue my search until I’ve found something worth buying.
This method works for just about anything you’re going to buy. It takes into account the price of the item and allows you to make the purchase you feel is best, regardless of how much something costs.
A few years ago, my wife and I were in the market for a wireless speaker. We like to sit on our back deck, have a cocktail or two (or three) and listen to music. In doing our research, we liked a particular Bose speaker, but it was anywhere from $50-$100 more than the others we were considering.
When we got to the store, we reviewed all the speakers available and decided to purchase one that was less expensive. Option B appeared to be just as good and was $50 less than the Bose speaker we were going to buy. We got it home, fired it up and within minutes were listening to our favorite tunes. The only problem is, we hated it.
There was no reason in particular for our dislike. It simply wasn’t the speaker we originally wanted. We had our heart set on the Bose speaker. As crazy as it sounds, we were emotionally attached to it. It’s the one we wanted, we were going to use it for years to come and would find the most enjoyment from it.
Although the one we initially bought was cheaper, we wouldn’t have used it as much. Our cost per use would’ve been lower than the Bose speaker. We didn’t like it, so why had we bought it?
Needless to say, we took the speaker back the next day and bought the one we really wanted in the first place. We still have it and use it on almost a daily basis. Even though we spent $50 more on the purchase, our cost per use has far outweighed the additional money spent.
Buying something on sale is great, but it’s only worth it if you’re actually going to use whatever it is you’ve purchased. I learned this when shopping at places like Marshalls. You can find a great deal at discount stores but many times the items you’re buying are either damaged or irregular in some way.
The Ralph Lauren polo for $29.99 may look great on the rack but if you’re not going to actually wear it, why spend the money? If you try it on and it looks odd, doesn’t quite fit right but you spent less, who cares if it’s just going to gather dust in your closet? You’d be better off paying full price for the shirt you actually want, knowing you’ll wear it for years to come.
One time purchases can be a necessary evil in our lives. There are times when a special event is taking place (a wedding, reunion, etc) and you either need or want to buy something prior to attending. The key is to buy something you know you’ll use more than one time.
If you find yourself buying a bunch of items you’ll use only once, I’ll be sure to put your weekly garage sale on my calendar for all the things you’ll need to get rid of.
