A friend of mine told me that for every $100 he spends on buying an item, he devotes an hour of research to the purchase before making a move.
That seems like a good rule of thumb. In fact, I’d go even further: for every $100 I spend on an item over the item’s lifetime, I try to devote an hour to researching the purchase before making a move.
What do I mean by that? Take a car, for example. Yes, we have the initial sticker price of the car, but how long do you intend to drive that car? How much gas will that take? How much maintenance will be needed to keep it on the road? Those are additional costs, and they should be an important part of the research you do.
If I buy a new computer, I might spend $500 on it (hypothetically). However, it’s going to suck energy right out of the wall and inflate my electric bill, so my total cost of owning that computer is significantly higher than $500 over the lifetime of that computer.
Research pays off. Almost always, research will lead you to the option that will provide you with the most bang for your buck. Whether it’s the most fuel-efficient and reliable car or the computer with the most horsepower for your dollar, time spent learning exactly what you’re buying and how to milk all the value you can out of that purchase pays for itself over the lifetime of the item.
What exactly do I mean by “do the research”? Here’s the process I go through for almost every significant item I buy.
What exactly am I buying? For starters, I don’t buy something unless I can clearly state what exactly I want it to do. What tasks must that item be able to take on to make it worth one’s money and time?
Let’s say I’m looking for a new kitchen knife. What do I care about with that knife? I want it to be able to chop vegetables easily. I want it to hold an edge for a while after I hone it. I want it to be able to maintain a sharp edge (with regular maintenance, of course) for a very long time, because I don’t want to have to go through the process of buying another one because the first one was junk.
This, in itself, involves research. To understand what features you want in a knife, you need to have a basic understanding of how a knife works, what knives are made of, and so forth. Reading and personal experience are both part of this. This is deeply connected to the idea that one should buy a low-end item first, become familiar with its use, and then replace it with an item appropriate to their needs. In other words, start with a cheap knife, learn how to use it, learn what you actually don’t like about it and could be improved, then use that as a basis to buy the right knife for you (assuming you use it enough, of course).
What items out there match the features I’m looking for? Once you know clearly what you’re looking for, you can start looking for items that match it.
I usually rely on several different sources for these types of answers. A few key magazines, such as Consumer Reports and Cook’s Illustrated, provide solid and unbiased reviews of products that I often use as a baseline for what I want to buy. Another key element of this type of research is my own social network, as I’ll send out emails or Facebook requests asking for their recommendations or suggestions. There are a small handful of bloggers that I trust as well. I also use the raw data provided by the manufacturer to figure out things like energy use.
Usually, this means a trip to the library and, often, a trip to a few stores, simply to understand the products I’m comparing and the features that they offer.
Where can I find the item(s) I want at the right price? I generally prefer to buy things when my back isn’t against the wall so that I have time to evaluate lots of different buying options. For example, after shopping for months for the right price on the right vehicle, I actually bought my car off of Craigslist.
The moral of the story? Don’t be afraid to hunt far and wide for the right price on the item that you want. Don’t wait until you have to make a purchase. Instead, start the process now on items that you know you’ll have to purchase down the road.
Research pays off, every single time. You’ll know it when you find the perfect price on an item that you know has the right balance of features for your needs.
This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere.