If you are a frequent reader of personal finance articles, you are familiar with some of the most commonly cited ways to save money – bring your lunch to work, install a programmable thermostat, cancel your cable, etc. In general, choosing the most frugal option is good for your bottom line. But sometimes, spending a little more might still help you out.
When I make less-than-frugal choices, I consider what my other options are. If I pay a little more for something when the cheaper option was easy, available, and a good substitute, paying more was a bad choice. But if I pay more for something when it saves me more in the long run or stops me from spending even more, the extra money is worth it. I’ve compiled a list of my five favorite things to “splurge” on.
Things Worth the Extra Expense
- Frozen Dinners: Frozen meals are more expensive per-serving than anything you can make yourself from scratch. But I don’t use frozen meals as a substitute for cooking – I keep them in the freezer for those days when I get home late from work or am feeling a little under the weather. In the past, I would have ordered in. Instead, I pop a frozen meal in the microwave or oven to save me a few dollars on takeout.
- Cable TV: Many people view cable as an unnecessary expense, and it probably is. But I frequently curl up at home to watch my favorite shows, and like having access to news whenever I want it. I also really enjoy watching free on-demand movies – and even on those rare occasions when I pay $5 for a movie it’s much cheaper than a night at the theater. Without cable, I think I would be bored at home and find myself going out for entertainment (including movies…and candy…and popcorn…) far more often. If cable keeps you from spending elsewhere, think twice before you cancel it.
- Magazine Subscriptions: The best way to read magazine articles is online, in the library, or using free subscriptions – all these options are free! I enjoy reading magazines in print and am always tempted to purchase my favorites after browsing in the grocery-store checkout line. Since I would buy them anyway, a subscription is cheaper. You can only read so many magazines per week or month, so think twice about how many you subscribe to. But don’t be afraid to order a few of your very favorites, especially if you might find coupons or other savings within.
- Annual fees/Entertainment Books/Discount Cards: This is kind of three things in one, but the bottom line is the same – annual fees on rewards credit cards, entertainment books, and store/website discount cards are all examples of paying to earn/save money. In general, you should be wary of paying someone else to save you money. There are lots of money-saving programs (such as accelerated mortgage programs) that charge you to do what you can do yourself for free. But sometimes, spending a little to save a lot is worth it.
If you travel frequently on a particular airline, a branded credit card for that airline can get you to a free flight pretty quickly – but you have to be willing to pay an annual fee. An Entertainment Book will give you coupons for everything from oil changes to your favorite restaurant – look through one before you purchase it and see if it provides coupons for places you go anyway. As far as discount cards, many businesses will allow you to pay a flat amount for the right to get a certain percentage off of each purchase for the next year. Again, if it’s a place you go often, this could be worth it. The bottom line with these kinds of offers is that if what you will pay exceeds what you will earn or save, the initial outlay is a smart one.
- Small Home Enhancements: In general, things like candles or decorative pillows may not be the best use of your money. But if these or similar items will help you view your home as a haven, you’re more likely to find reasons to stay home – and therefore avoid going out and spending money. Warm blankets or even a bottle of wine can fall in this same category. Don’t view this as free reign to buy anything you’ve ever wanted for your house or apartment – but recognize that small comforts can pay big dividends.
What are some areas in your life where you can look past the most frugal choice to save more in the long run?