Written by Trent Hamm, The Simple Dollar is a popular personal finance blog that chronicle's one man's road back from overwhelming debt to financial security. Hamm declared the contents of the blog to be in the Public Domain in 2008 and available for sharing when attributed properly. We will share a couple of posts a week.
For me, frugality means figuring out which products do the job they’re supposed to do well, then finding those products for the lowest price. In other words, I’m always looking to maximize “bang for the buck.”
For many products, the generic or store brand version works well. For other products, there are certain brands which are drastically better than the other options and you’re better off simply seeking bargains and coupons.
The challenge is figuring out which is which, particularly on more expensive items. Here’s exactly how I do it.
First of all, I turn to Consumer Reports. Their product reviews are a starting point for me for virtually everything that I buy. While I don’t consider them infallible, I do consider them a great place to start.
However, I don’t start with their “top” item. The one I usually start with is their “best buy,” one they usually designate and explain in their rankings. Sometimes, it’s their top one, but usually it’s one that’s in third or fourth place at about half the price of the top one with only negligible differences between the two.
I usually also figure out their lowest priced items and see where they rank. If the lowest-priced item is anywhere in the top half of the rankings, I’ll usually give it a try, too.
The result is that I usually wind up with two or three items to investigate. If it’s a low cost household item, I’ll usually add the store brand as well.
If the item is a low-cost one such as a household supply, I’ll usually buy the lowest-cost item on my list and try it out. If it meets my needs, I stick with it. If it doesn’t, I’ll try another on my short list.
What about more expensive items, such as a tablet computer? When an item costs more than about $20, I do a few more things before making a purchase.
First, I try to identify the exact needs this item is going to fulfill. What do I want it to do? Knowing this is vital so that I’m not talked into paying more for extraneous features that sound neat but that I’m not really going to use.
After that, I’ll ask my social network for thoughts. I usually stick with people who I think will have some particular insight about the product. So, I won’t ask my great aunt who barely uses a computer what tablet I might want to buy.
Next, I’ll look for opportunities to try out the products myself. I’ll visit an electronics store, or I’ll ask my friends to let me try out their tablets. Any opportunity for hands-on access is golden.
I’ll also read lots and lots of reviews. Yes, some “reviews” are essentially paid advertisements, so I try to stick to ones from sources I trust and I try to read a large number of reviews. I rarely stick to even two or three reviews of the various products I’m considering.
I don’t really bargain hunt until I’ve narrowed my purchase down to one or two options, but when I’ve figured out what I’m going to buy, then I start shopping around like crazy. If it’s not urgent – and most purchases are not truly urgent – I’ll watch prices at a bunch of e-commerce sites as well as local retailers, waiting for a sale, and I’ll also look for coupons and coupon codes.
I use my web browser as a tool in this process. I usually do this by establishing a bookmark folder in my web browser, where I put the product page from the sites of several online retailers for the item I’m interested in. I’ll usually re-name that link to the “normal” price for that item on that site. I’ll check each of these daily. I’ll often also include any links I find through Google searches that list coupons or other discounts for this particular item.
Then, I wait. I usually try to wait for a price that’s at least 20% below the average of the other retailers, but that can change depending on the specific product. When I find a price I’m happy with, I pull the trigger.
Another advantage to this type of shopping is that while I’m shopping for a particular item, I tend not to think much about buying other things. Spending a month or two focused on one item ends up subtly keeping me from spending money on other items.
This sums up my process for buying virtually anything. No matter what it is, it usually goes through a process very similar to this and, thanks to that process, I find myself consistently getting a strong “bang for the buck” as well as making fewer unnecessary purchases.