7 things you don’t want to skimp on

You don’t always want to save as much as you possibly can on everything.  I can think of at least a few examples where spending the least amount possible is not always a great idea:

Education.

I am a huge proponent of public education for two reasons:  1, the involvement with your community, both for parent and child, is going to happen somewhere – there is no sense in insulating yourselves from it; 2, you’ve already paid for it (through taxes).  That having been said, education – particularly college – is not a good candidate for finding the cheapest option simply because it’s cheapest.  That might seem to contradict some of my earlier pieces.  But I don’t think it really does – I simply think that far too many people choose the most expensive college just because it’s the most expensive, and that’s wrong, too.  At every level you need to find options that are good for you and that really address your goals.

Health care.

This one is tough.  Of course you don’t want to overspend, but I can tell you that when you are seriously ill, most – not all, most – thoughts about money go right out the window.  Of course in the case of lingering illnesses, such as happened in my family this summer, you still have to worry about the person’s family’s future – will the cost of health care be too much to allow them to keep a house, for example?  And it’s a sad state in this country that we have to worry about the cost of wellcare.  But in general, when you are really sick or injured, you don’t stop the hospital from doing procedure X because it costs too much.  The hospital or insurance company may stop it, though.

Cars and related expenses.

When you read people suggesting ways to save money on cars, I always think “this is a metal box that you get in and drive around in at 60 miles per hour – do you really want the cheapest car you can get?”  I want the safest car, with reasonable mileage that keeps it from being an outright assault on the environment.  I’ll pay a bit extra for the good tires, even though I could get reconditioned ones cheaper.  Then again, I still drive a 2001 Pontiac Grand Prix.

Insurance.

If you live in a flood zone, you can save some money by skimping on the flood insurance.  When the flood comes, though, if your insurance isn’t enough to rebuild your place or buy a new one, why did you bother?  What was the point of saving that money if you can’t use the insurance when you need it?  Make sure you’re insured against financial catastrophe.  Life insurance is important.  Having a $100 deductible on your auto isn’t.

Babyproofing equipment.

I think the choice here is clear.  If you want to skimp on gates at the top of the stairs for your child, then I don’t think you have your priorities straight.

Food.

This one may be a little more contentious, but I think trying to save money on certain types of food is ridiculous.  If you eat meat, try this experiment.  Go buy some heavily processed, dyed, factory-farm raised chicken, and buy some organic free range chicken.  Prepare them both the same way, but don’t overdo the breading, herbs, spices, whatever – keep it simple.  Try both of them.  Tell me which one was a better use of money.  If you aren’t a meat eater, try buying organic, locally produced tomatoes and then buy a Mexican imported tomato from the supermarket.  In both cases, the more expensive option is likely to taste far better, therefore it satisfies you better meaning you’ll eat less, enjoy it more and be less tempted to let it sit in the fridge until it goes bad.  It’s probably healthier, too, but I won’t even use that argument.

This one is the tough one – making money.

If you are starting a business or investing, you don’t necessarily want the cheapest possible option.  Undeveloped property 80 feet from the road with no plumbing or electricity in Montana might be cheap, but that doesn’t mean it’s a good investment.  If you are starting up a restaurant, you don’t want to serve the cheapest possible food.

I guess the purpose of these examples is to show that sometimes the mania for frugality and savings isn’t always the best idea.  Saving money can’t always be solely about retiring or financial freedom.  Between now and then there is a life to be lived, and lived safely and comfortably.

  • http://20andengaged.com 20 and Engaged

    I definitely agree, you don’t want to skimp on these things, but you also don’t want to splurge if you don’t have to. For education, search for scholarships and grants. For cars, look for a reliable car that’s not going to give you too much trouble. For food, search for coupons. There’s a way to get quality of all of these without having to pay full price. There’s always a way around it :)

  • Janette

    I am beginning to think that unless you are ultra involved- spending money on a private/or excellent school district high school is more important than a college degree!
    An “A” in many high schools will get you a job in a McDonalds.
    Don’t skimp on high school!

  • http://www.advancedwebads.com/ Frank Adams

    I think I would go for education first. And then, I would get a car, a car that wouldn’t be that pricey and wouldn’t be that pain in the ass for repairs or stuffs like that. Then I would go for businesses. I have a blog and I invest in article marketing and other sorts of things in the internet to provide me the income while being at home. Anyways, you can try using advancedwebads’ unlimited banner impressions and click service to gain more traffic or visitors to your blog. This is the service I use.

  • http://freefrombroke.com Glen

    I love your food example! When you start to eat better food you realize how much taste is actually in the food compared to the processed ones. You get what you pay for and when you buy cheap food you get little flavor.

  • http://www.jackscouponcodes.com Jackie

    I certainly agree with all your examples. Sometimes we can hurt ourselves by trying to save too much. My grandma used to call it being penny wise but pound foolish. It doesn’t always pay to save in some areas of life.

  • http://www.rklfinancial.com/ Shaun Somers

    I think that it’s a good point to be made that there are some things that price shouldn’t be the most important factor considered. On the cars example though, I have seen a lot of my friends and acquaintances that use the “I need a safe car” argument to justify buying a much more expensive vehicle than they can really afford. My 1999 Dodge Caravan with 230,000 miles on it might break down more often than an ’09, but I really don’t think it’s measurably less safe for day-to-day driving; and there’s no way I put out anywhere close to as much in repair $ as others do in payments!

  • http://newfromclt.blogspot.com/ Randy

    While I agree with you, just because you shouldn’t skimp doesn’t mean you should splurge. Education is a good example, is a Harvard education better than a state college/university? Same goes for food. Locally grown is better than the supermarket stuff, but is the pricey organic food store really better? (and is it really any healthier?)

    As for insurance, it’s very possible to be over-insured. Cancer insurance is an example, why not just get regular life insurance?

    So don’t skimp, but don’t automatically buy the most expensive either…

  • Bubelah

    There’s a saying in Russian, that translates roughly “A stingy person pays twice”. I am sure Steve can tell me the English equivalent ;o). But it’s clear what it means. You try to save on smth by buying cheap, but end up throwing it away and then buy a good quality that costs a little extra. Imagine buying a used mattress for $75 and thinking you got a steal, only to find out how nasty it is, you try to clean it, but it’s not salvagable, so you still go ahead and buy that $300 twin mattress at the end. You tried to save money but in the end you pay much more. Just a primitive example, you get what I mean.

  • http://insurancecoverage.me/liability-auto-insurance-and-the-necessity-to-have-adequate-coverage Phil @insurancecoverage.me

    Skimping on auto insurance can be a big mistake especially so with liability coverage. One that causes an accident can be sued for large damages and with insufficient liability coverage will be be subject to possibly losing personal assets.