Today’s post dives deep into the different between saving through frugality and knowing when to spend on quality. It is also a guest post from Stefan. Follow his blog at and check him out on Twitter.

As for his background, Stefan is a young millennial who is finishing up his MBA. He will be sharing his journey as he embarks from college into the real world as he pursues financial independence.

Frugal is a word that we often interpret as saving money. While this is partially correct, frugal actually means spending your money wisely. So what’s the difference? Buying cheap items may save you money in the short-term but it may actually cost you more in the long run. Let’s take a look at the difference between being cheap and frugal.

Warren Buffet once said, “Price is what you pay… Value is what you get.” Here is a perfect example of what he means by this.

A fellow teammate of mine had to buy a car for his senior year in college to commute to his clinical placements. This was supposed to just get him through senior year and then he would sell the car for a better one once he began working. Prior to his car search process he set a budget that would allow him to purchase a decent used car. He told me that he will pick me up from the airport to show me the new car as a surprise.

Upon arriving back into the US he picked me up from the airport with his new car. When I saw the car I was pleased with his purchase from the outside. It looked like a sturdy car that was well taken care of. However, what got me slightly concerned was how old the car was, the fact the engine light was on as soon as I got in and the price he paid for it.

The car cost 25% less than his budget, so I thought wow what a great deal you got! There was just one downside though; the car was a 2004 model, so roughly 11 years old at the time. I am no car expert but that, in my opinion, had problems written all over it.

To cut the story short here is what transpired from this purchase. The car worked great, for roughly 3 months. After that there were numerous problems and many break downs which cost approximately 60% of the car’s purchase price to fix. Currently the car is sitting in our school’s parking lot accruing dust because understandably, he does not want to put out any more money to fix the car. If anybody wants to purchase this lovely automobile please feel free to contact me…just kidding I would not do this to my worst enemy.

To sum up this purchase here is a quote from our good friend Benjamin Franklin, “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

To be fair to my friend he thought he got a great deal and so did I. The purchase was meant to be temporary so price was definitely high up on the selection criteria. What Benjamin Franklin says however is that we are often blinded by the price that we forget all of the other factors we need to account for. He saw what he perceived was a great deal from a price perspective so he purchased the item with perhaps little consideration for the future. Unfortunately for my friend, buying cheap led to spending more money after the purchase for maintenance, repairs and upkeep. If you really want to save money then you should invest in quality. There are times when it makes more sense to spend more money now so you do not run into these problems down the road.

Here are some items where it makes sense to splurge on quality instead of saving money:

Vehicles and Other Modes of Transportation

When you purchase a big ticket item quality will usually trump price. Price is only one factor but what about the total cost of ownership? Think about maintenance, repairs, fuel, insurance and other cost factors that play into the budget. Do not however believe high-end or luxury will ensure a better purchase. Think about fuel economy and the safety of the car rather than the brand.


Purchasing a house should never be done on the cheap side. Before you know it you will be ripping down walls to fix unexpected costs. Like vehicles, think about the total cost of ownership. What is the upkeep cost, the square footage, location, and neighborhood like? Do you plan on growing your family? Think about the future and not the present.

Appliances and Energy-Efficient Products

Ever see those energy efficient tags on appliances? Usually the more expensive the appliance the more energy efficient it is which means more savings down the road for you. These purchases may involve some math to figure out the future benefit along with some assumptions. Costs to factor into your budget should include how long will you own these appliances and what is the cost of using them? If you plan on using the item for a long period of time it will likely make more sense to purchase the more expensive item if it saves you money later on. Some items that come to mind are solar panels, energy efficient light bulbs, rechargeable batteries, and kitchen appliances.


Like many of the other categories a major factor to consider is the length of time you plan on owning the furniture. Purchasing cheap furniture will likely fall apart and cost you more money to repair should you have bought better quality. Another factor you need to consider with furniture is how often do you plan on moving? Some people frequently move so it may make more sense to purchase lower quality furniture as they are always on the move. However, if you take the furniture with you it may be cheaper in the long run if you purchase a sturdier, long-lasting piece.

While this may not be a comprehensive list it is one that entails common items we all purchase. Every list will be different depending on one’s lifestyle. For example I will not compromise the quality of my computer for price. My computer is far above the average price but it is something I use every day and an item I deem worth the cost as I do not intend on replacing it for many years. Finding the sweet spot between cost and quality (or longevity) may save you hundreds or even thousands in the future that can be invested into your goals and savings.

What items does quality triumph over price for you? Have you ever found an instance where price outplayed quality for big ticket items?

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