Understand How to Buy Just as Much as How to Save

How to BuyThe key to having a lot of money is to save a lot of money. Having a 20-50% savings rate consistently over the long term will let you keep money. However, a lot of others tell you how to save, but not a lot tells you how to buy. Spending money on things that are lower cost to save money could be detrimental over the long term. Warren Buffett famously said,


Price is what you pay, value is what you get.

The key is to increase your value, not increase your bank account. Having money is great, but looking at the short term benefits of saving money could make you worse off than spending expensive items. Why? Great question! For the most part (more than 50% of the time), expensive things are better quality.

Exceptions are commodity items, things that aren’t differentiated at all except for the brand. Clothes, fruit, luxury cars, gas, etc. are some of the things that come to mind. Paying a premium for these items isn’t worth it.

You get the same value as a non-branded item but pay more. The idea is to look for differentiation in features of the product and price and determine if the differentiation is worth the difference in price.

Knowing How to Buy

This past Thursday, my car battery was having problems. I ran frantically over town to find the one auto shop that carried my car’s battery. I spent close to $130 after taxes to replace the battery. If I knew a lot about cars, I would have brought the issue up when I was negotiating for the car, but I didn’t.

I only focused on getting the lowest price. I also had to spend an extra $37 to just buy a cap for my coolant as a result. (Dealers sure know how to play their hand).

Because I don’t want to be taken advantage of again, I’m putting in the hours to read the owners manual. I want to be educated so that I know how to buy a car correctly the next time around. Price shouldn’t have been the only thing I focused on. 

I shot myself in the foot as a result because I should have popped the hood open and asked questions when I was buying. Knowing how old the battery is and making sure parts aren’t missing are basic things I should have known.

The Benefits

Putting that aside, the battery that I replaced had benefits that give more value than its cost. The mileage capacity for my car went from 300 miles to 420 miles. The car now can drive 120 miles more per full tank than before. I usually pay about $20 per month for gas. The additional 120 miles will let me pay $20 per month AND A HALF for gas.

That’s a yearly savings of $80 ($240 per year before the change vs spending $160 per year after) given that oil prices stay the same. The battery has a 3 year warranty, meaning I spent $130 to save $240. If oil prices rise, I realize even more savings (I don’t think it will rise anytime soon, however). 

I could have easily focused on the short-term money outlay of $130 and not paid for a new battery. That’s looking at the short-term effects and not the long-term effects. If looking at the long-term, I would be better off spending money than saving. Knowing how to buy can be more beneficial than knowing how to save.

Focus on Value, Never the Price

Some examples where value should be looked at more closely include health services, food, cars, debt, and most important of all, time. These are things that almost everyone pays for and has to have, so might as well figure out how to buy.


Holding off on going to the doctors or dentist because it’s too expensive or going to a sub-par review doctor is risky. Not getting a filling for a chipped tooth today can lead to needing a root canal in the future. Save a couple hundred now to spend a couple thousand later is not smart.

Going to a cheap doctor saves a couple dollars but a medical mistake can cause thousands if not tens of thousands of dollars in medical bills. It could even be considered risky to go to a bad doctor. It’s not smart to take on risk when you are the one buying a physical product or service.


I’ve been there. I saved a lot of money on food costs by only spending my days in McDonalds and eating ham and cheese sandwiches. Eating only McDonalds is life-threatening. I hope I didn’t accumulate any trans-fat by only eating McDonalds. I saved a few dollars every day by eating cheap food but if I didn’t stop, I would have racked up thousands in medical bills. Again, not very smart when looking at the bigger picture and the long-term.


I told my parents that I only wanted to spend $5k to buy a car because I wanted to be frugal. It was my money that I was going to spend so I wanted to call the shots. Oh, how my life would be different if they hadn’t advised me otherwise.

The only kind of cars that go for $5k is one that has 80k+ miles and need regular maintenance. Maintenance costs are significant. Short-term savings for long-term loss situation once again. I’m glad not to have paid all of my attention to the price and focused on the value instead. I upped my budget and spend 10k to buy my car.


When you take on debt, you’re buying debt. Most debt is not worth buying because of the covenants and obligation. However, some debt is worth buying.   


Time is finite. Once it’s spent, it’s gone. Forever. As a result, doing things that buy you time can be money well spent. How to buy time? Look for products that give you efficiency. For example, I could spend money on a bicycle to go to work which will save me gas but it won’t buy me extra time. I could live without a cell phone but my work would never be done so efficiently if I hadn’t had a cell phone.

Looking to buy only necessities to save money is good, but there are limits to the benefits. Buying value to live more efficiently and better lives have endless benefits. You have to figure out if money is more valuable or if time is more valuable. Every situation is different.


I learned that I shouldn’t buy something if it’s not a necessity. I agree completely that I should only buy things that I need. However, it was too ingrained in my brain to the point where I wouldn’t spend any money unless I need it for the short term. Long-term viability is what matters and spending money can be a great way to add value if done responsibly.

One thing that I did leave out is in investing. Always look for value in the stock market and never focus on price. It takes a little bit of research to make sure that what you’re buying will add value but putting in the time can let you live a better life!

Readers, do you feel like you have a grasp on how to buy? How do you make spending decisions? Let me know in the comments below!

Finance Solver

I grew my net worth to $40,000 as a college student through hard work, discipline, and a little bit of luck. I graduated college in 2016 and will be starting to plan for my retirement once I start working.I am planning on reaching financial independence by my early 30's and I will document my moments of inspiration all the way to desperation here.

My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!

Read more about me here.

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36 thoughts on “Understand How to Buy Just as Much as How to Save

  1. Good article. Sometimes especially with shopping usually the more you buy the cheaper it is but that’s not always the case.
    When I use coupons I will almost always buy the smallest as it brings the price down a bunch.
    Same thing with vehicle repairs I go to a reputable guy who does quality work. Dealers overcharge generally for a product with that cars name on it.
    Car batteries I found out the hard way cheaper isn’t always better so tend to buy the higher end ones. As they seem to perform and last longer

    • Finance Solver says:

      Thanks Doug! I always use coupons and any discount apps to lower my purchase price. With so many products out there, it’s almost a crime to pay full retail price for something.

      I agree. I couldn’t find the cap on Amazon or any other place so I had no other options. I’m going to do a ton more online research before going to a dealer ever again, though. Hard lesson but an important one to know.

      I didn’t know how important batteries were. I’m going to exchange my Mac battery pretty soon once it reaches the 1000 full cycles. I have about a year to go before it reaches that point, and hopefully I don’t charge it frequently.

    • Finance Solver says:

      I like to talk to people, look up resources on google, etc. before I make a purchase. Reviews are critical to my buying decision process when deciding to pay more for a product or not.

      I try to never buy full price (well, by definition because my credit card gives me a 2% cash back, I never pay full price) and do a quick check on coupons, discounts, etc. before making a purchase, especially online.

  2. Negotiating is a skill. I bought a new used car that somebody owned for 3 months. They traded it in but it didn’t come with a spare tire. I was able to negotiate a spare tire that they threw in for free ($500 value according to the dealer since it came straight from the factory in Singapore). But, I forgot to ask for a replacement jack and a spare key.

    Also when I do need to buy. I make sure I use a rewards credit card or a cashback portal of some sort. Also only spending I need to spend & use the rewards as extra to put back into savings for another day.

    • Finance Solver says:

      That’s awesome! It’s important to look for negotiation points beyond just money. I didn’t understand that when I went, which gave me a lesson in negotiation. One small lesson to learn a lifetime of, though!

      Same here. My credit cards give me a 2% discount plus the cashback websites give me additional cash backs. I’m getting paid to spend money on things I was going to spend money on anyway, which I think is a steal. I think I have about $500 in credit card cash backs and got about $150 in cash back websites.

  3. I went to buy a car the guy told me prices were final on all cars sold. He said what does it take to get you into this car today. I said a price 1,000.00 lower than price and got it. Kind of wish I would have said 1,500 less to see if the price would have come down anymore.
    So even though a dealer says price is final does not mean it is.

    • Finance Solver says:

      Yep, and what’s more is that dealers are usually very sleazy. They will lie and won’t feel guilty about it at all because they need to feed their family. I need to start calling them out more on lies.

  4. Nice article, we totally agree Finance Solver, we only buy when it’s necessary and when it is necessary we frugal the hell out of it. By making as good a value purchase as possible, not necessarily the cheapest.


    • Finance Solver says:

      That’s awesome. I try to minimize my costs while maximizing the benefits. Sometimes it’s hard to do when it’s a product that I haven’t tried before but I try my best. I’ve been getting more intrigued with the power of research!

    • Finance Solver says:

      It’s all about the long-term, never the short-term. Focusing on the value instead of the price can be a great way to buy smartly!

  5. I really like this approach and need to continue to focus on “value” instead of price. I think sometimes people will point out things people buy and say “you paid HOW much for that?” and it may not be obvious the value that it provides. I think having someone come and clean your house is a good example. If it frees up 5-10 hours a month for you to focus on a side hustle or focus on improving a skill, it could totally make sense from an ROI standpoint. But if you don’t think of it from a value perspective you may just think “I can clean myself – no way am I paying someone to do this.”

    • Finance Solver says:

      Yep! People have bashed on me that I had a Mac and not a Windows computer but I think that having a Mac provides me more value because my Mac has a faster processor, saving me time. It also lasts a lot more than a windows computer so over the long-run I’m so happy that I spend 1k+ to buy my Mac.

      That’s so true! The capital outlay on year 0 or time 0 is what people usually focus on instead of the benefits on year 1 and beyond. Value added in perpetuity can be a powerful force in living more efficiently. It’s hard to think into the future but it’s an important skill to have!

  6. Great article! It took me a lot of years to learn the lessons that you talk about here. Cheap is definitely not always the way to go and has certainly cost me more in some cases by having to replace items that don’t last very long. I love your examples of not getting health care issues taken care of. My husband is a great one to say, “I don’t have time for that right now” or “We can’t afford it.” In reality you can’t afford not to go to the dentist or doctor when the need arises.

    • Finance Solver says:

      Thank you Paula! It took me a lot of time as well before I realized that some of the savings techniques that were employed by my parents weren’t the best.

      Yep, I’m very guilty of that as well. Being so young, I feel that I’m invincible but I know that reality is going to kick in if after years and years of not taking care of myself. Saving a couple hundred dollars today can lead to paying thousands of dollars down the road. It costs a lot of money to live, but it has to happen.

    • Finance Solver says:

      I never considered that, great point. DIY projects are great to learn and save money, but if done incorrectly, it can cost a lot more than saving. I love doing DIY projects on my car and figuring stuff out but I know if I do one thing wrong, my car could go out any second. I take the overcharged price that the dealers charge to get my car fixed. Thanks for stopping by!

    • Finance Solver says:

      Yep, buying just the necessities can certainly help in helping your finances. It’s the way to reaching financial independence and being able to retire early!

  7. Buying cheap can cost more in the long run. I use to work for a major superstore chain and learned that even when they have well known name brands that does not mean you are getting the quality of that brand. They, (the superstore) demand that the product is made out of cheaper material so that they can buy it and sell it for cheaper. For example, You see a water hose selling at a hardware store for $20 and the same brand water hose at one of the superstores for $10. That $10 one is made out of cheap material and may last for a year or two. The $20 dollar one could possibly last 8-10 years or more. So you also need to be careful where you shop for the item you researched.

    • Finance Solver says:

      Oh man I can’t believe the brands have bended to the will of the superstore. If the consumers find that out, the brand will have so much more to lose than a couple of dollars by losing their brand value. I didn’t know that would actually happen in a superstore but I should do a little more due diligence on the superstores that I’m visiting regularly. Would not like to be a duped consumer by any means!

  8. You’re right about price vs. value. You don’t want to be “penny wise and pound foolish” as the expression goes. If you purchase for long-term value, you should be in good shape.

    For example, we spend extra for organic food for our long term health. Short term, it’s a real budget buster!

    • Finance Solver says:

      Nice! I tried to buy organic food at Trader Joes. The bill came out way more than I wanted it to be so I scaled it back a little but I still add a little bit of organic food into my grocery bill so that I can be healthy. If I can control the destiny of my health, I sure will take it!

  9. Totally agree. Buying value and quality over price is the way to go. If you buy cheap stuff that doesn’t last as long, you probably will end up spending more money than buying value/quality product that would last longer.

    • Finance Solver says:

      This could also apply to failures as well. Failure is a short-term effect that could give long-term benefits. However, human psychology have us focus a lot more on our losses than our wins. We could win $1m but we might care a lot more about losing $1. Life is a marathon and focusing on the long-term value is a great perspective to inject.

  10. This is really important, and many people seem to think that being frugal simply means buying the cheapest thing possible. If you have to to buy that $1 item 10 times in a year, the $5 item that lasts multiple years is really the frugal choice. I’m always trying to find the value when making purchases, probably sometimes over analyzing them! I’ve been searching for a mattress lately and it’s a struggle to really determine what determines “value” for a mattress.

    • Finance Solver says:

      The inherent problem I think lies in the fact that people don’t take into consideration the frequency of the purchase. When we go to a store to buy something, we look at 1 product. We only think that it’s a one-time purchase because we only look to buy 1 tangible thing but it’s hard to imagine the future and think how many more times we need to buy something.

      Same here! I try to do a ton of research by comparing different prices on the internet but if I can’t find a credible source relatively easily, I stop and go with my gut and reviews. It’s hard but after figuring it out, it’s sure to be rewarded.

  11. Especially with food, it isn’t worth it to save a few dollars with bad quality food. Short term savings today will translate in long term cost on health, costs that are probably hard to quantify if it leads to a shorter lifespan.
    In general however, I completely agree with you: it’s better to focus on getting the best value than the lowest cost.

    • Finance Solver says:

      Yep, I spent $2 a day just eating McDonalds but I can bet that that wasn’t healthy at all. I hope that I didn’t rack up any healthcare costs along the road but that’s yet to be realized and seen.

      Value is a different thing than the sticker price which is harder to measure / see and takes a little time figuring it out. But once it’s figured out, it’s going to become routine and easier to do calculations for other products to buy.

    • Finance Solver says:

      Car shopping.. The negotiation will be a fun process. I didn’t really take into account maintenance bills when buying my car (I hope I’m not going to regret that) but I think I got a great deal.

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