In day to day life experience, you’ll come across lots of opportunities to spend money. In fact, people will want you to spend a lot of it. Once you develop basic savings habits, it’s relatively easy to ignore most of the marketing efforts. However, when it comes to spending money on something that’s truly important – like medical care for example – many people simply fork over money on the spot without thinking about if they are getting the best deal. The trauma and urgency of certain events tends to mask opportunities for making rational purchase decisions.
This is something I thought of due to a major expense coming up for our family. It’s one of those things that is not a fire that needs to be put out, but falls into the “not urgent, but important” category of life tasks that are on one’s plate. So often, it seems like these are the things that fall by the wayside because of our busy lives. I have to give credit to Mrs. Mase here, because she’s the one that brought this particular looming expense to my attention.
It’s the kind of thing that requires a specialist of sorts, so you can’t just walk into Wal-Mart or Target and buy something that’s going to solve the problem. So, we started shopping around, looking at various options. We talked to multiple professionals and set up appointments at different places. It’s been sort of a chore, to be sure, but I’m glad we’re doing it.
One of the people we spoke to quoted us what seemed like a fair price. It was the first person we spoke to though, so how could I rationally know that it was fair? As soon as I saw the cost on the piece of paper, my mind immediately made assumptions based on previous experiences of purchasing services from this industry, and a range of acceptable prices probably popped into my subconscious mind. Who knows though? Sometimes you can make decisions based largely off of intuition, but this was not one of those times.
Going to another person for the same group of services, we were quoted about 30% less! I thought that this place would be somewhat more affordable, but I was quite pleasantly surprised. My wife found a creative solution to the problem and suggested we talk with a group of people that I would have never even thought about consulting. Talk about economies of scale in a family – two minds are definitely better than one 🙂
We’re going to keep shopping around some more, but I think we’ve probably found the place that can suit our needs. Major expenditures call for major research and due diligence. I once heard a quip that stuck with me: whenever you are about to spend money, spend as much time thinking about the purchase as it would take you to earn the amount of money to make the purchase.
This strikes me as a good rule of thumb because it strikes at the heart of a good balance between production and consumption. If you’re a high earner in your field and know that you can replenish your cash reserves quickly without much more work, many small purchases will be inconsequential to you. However if you’re just starting out and working two full time jobs just to keep the lights on, you need to weigh decisions to buy many things much more carefully. But really, regardless of your level of income, if you’re trying to make significant progress toward aggressive financial goals (aka like the Mrs. and I), then you’re going to have to weigh most spending decisions with a certain gravity that you wouldn’t otherwise if you didn’t have attaining financial independence as a priority.
Every dollar has present utility and future utility. It’s your job to figure out the best use of any dollar at any given moment in your life.