Sometimes spending money can actually save you money. For example, if you’re buying cheap boots and replacing them often, you’ll save money in the long run if you buy a pricier pair of boots that last. In line with this concept, money writer Jim Wang suggests the “upgrade and save” strategy.
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When we want to cut back on expenses, we often think in the short-term. I’ll look at my budget then ask myself, what can I give up? What can I live without? Instead, Wang challenges us to think outside the box when we look for ways to save. Try looking at the expenses you can “invest” in to save money over time. He explains:
The Upgrade and Save Strategy is simple. I make a list of every expense I pay for on a regular basis. It can be little things like a cup of coffee in the morning to the heating system of our house. If you use it more than once a month, it’s a candidate.
Next, is there a way I can spend money up front, upgrade it, and have it save me money over the long run? The answer is often yes.
And as a double bonus, by upgrading I’m able to get a better level of service or enjoyment while saving money at the same time. I’m not cutting back and starving myself of something, I’m adding to it and gaining more enjoyment.
An “upgradable” expense might be something you rent each month. For example, instead of renting your modem from your Internet service provider, buy one on your own. Or it might be a frequent purchase: instead of buying fancy coffee everyday, buy a fancy coffee maker.
Of course, some people use this as an excuse to spend. They will justify a frivolous purchase by saying it’s an investment. So this tip may be better suited for those who are a bit more tightfisted with money.
The goal here is to save. The upgrade is just the icing. Check out the rest of Wang’s post at the link below.
The Upgrade and Save Strategy [Wallet Hacks]