This Holiday, Think Short-Term Spending for Long-Term Gain
To be penny wise and pound foolish is to refuse to spend money when judicious spending is the best thing to do; Spending for Long-Term Gain. This often manifests as buying something cheap when something more expensive would have been a better long-term bet. A used car can cost you more than a new car in the long run. Discount airfare can cost more than a premium ticket if you have to change your schedule or cancel. You might not be able to do either with the cheap seats.
It can be challenging to tell when to save and when to spend. Sometimes it just comes down to timing. There is an item that you don’t exactly need. But you know you are going to get it anyway at some point. There is a sale on that item that will save you a lot of money by acting now. You should probably buy now and save rather than wait till later and spend more on the same item, or take a chance on that item being sold out when you really want it. This is an example of opportunity cost.
It is easy to recognize these moments after they pass. But that is too late to do anything about it. This holiday season, there will be many buying opportunities. Here are some things that will be good purchases in the long run even though they will cost you a bit more right now:
A New Car
California is being devastated by wildfires and Covid. Beyond the death toll, the economy is tanking. People are unemployed, out of savings, and teetering on the brink of bankruptcy. This feels like the wrong time to spend money, especially in California.
However, if you need a new car, this might be the perfect time to shop for auto loans in California. Lenders are extremely motivated right now. You could save thousands as a result. And just because things are difficult doesn’t mean you don’t still need to get around. We have vaccines right now that are over 90% effective from at least two companies. You will get back to work again. Don’t wait for prices to go back up. If you need a car, it is better to spend now and save over the course of the loan.
Smart Home Gadgets
It is time to invest in smart home technology. These gadgets have been around for quite a few years now. In their early stages, there was reason to hold off and let the early adopters be the product testers. There were many concerns about security, longevity, and overall utility.
Today, those questions are resolved enough to make it reasonable to recommend to the average person. Many gadgets for the smart home make your home and family more secure. Smart locks and cameras are a genuine technical advance. It used to be that only the wealthy could afford these types of systems. Now, everyone can afford them.
Smart lights and smart plugs are also coming into their own. The light kits are still somewhat on the expensive side. But there is a utility in controlling your lights when you are away from home or having them automated based on when a room is occupied or by the time of day. It is also a nice convenience to control lights and other items by issuing voice commands. Smart thermostats can save a ton of money. The jury has reached a verdict. Spending a little to make your home smarter can pay off big time every day after that.
Game Console Bundles
It can be quite aggravating to finally locate a next-gen game console, only to find that it is laden with bundle pricing. The console is expensive enough. But you can’t buy one without having to pay for additional items that you didn’t want. It is a way for sellers to pad the profits on a hard to get item. They know that if you don’t buy it, the next person will.
That said, if you are purchasing the rare beast as a gift, there is a good chance the recipient will very much appreciate all of the items in the bundle. Some of those items might also be hard to get, such as premium controllers. So don’t look at the bundle as a scam. Rather, consider it an opportunity to maximize the value of the gift. You will spend more than you wanted to upfront. But you will potentially save a lot of money by getting those must-have extras at bundle pricing.
Conclusion | Spending for Long-Term Gain
When holiday shopping, don’t fixate on how much you spend in the moment. Instead, try to focus on how much you can save down the road. You literally save down the road with a new car purchase now. Smart home gear is relatively inexpensive now and will start saving you money immediately. And let’s be honest: You are buying the game console and all those extras anyway. So rather than be upset by bundle pricing, find the best bundle you can and save big.