I just bought a new vacuum cleaner. Besides the fact that we really needed it (wich is loophole numer one in our personal finance web) I evaluated pretty much the way I do buying stuff in general. Simple google got me to a test from a consumer magazine (I know them from before and can say they deserve my trust). Spent 2-3 minutes reading the test, and ended up buying the second best according to it. It was $77 more than number one at $274. Why? Because even though the testers liked a little less sound, a lighter machine and a little less money, they also praised the one I ended up buying for impressive build quality. Producer (Miele) claim they will work for 15-20 years, and many others seem to agree to this.

So, even though buying a vaccum cleaner seldom is fun and I really don´t like the thought of moving $274 out of my savings budget in order to finance it - I do enyoj the thought of not having to do it again in 15-20 years (while it gives me good service).

As long as you use the initial loophole (ask yourself: "do I eally need this function/item?") I have found this approach the long term winner. It is expensive to be cheap, because you end up buying more stuff replacing the crap you bought in the first place. I read an article on GRS recently about furniture, and even though I come from the land of Ikea (wich I hate) I have the same values as the article writer. Buy solid stuff, avoid getting cought up in what is hip this summer. I have an chiffonier from the 1800:s in my living room, bought for $225 from a guy who refurbished it. It will last another 100 years. My kids beds - carpenter made by hand 40-80 years ago. Bought used for $360 (both of them) from a couple in their 40:s who said they could buy them back in 10 years for their grandchildren... The beutiful beds could probably be sold for $360 plus inflation during the time we had them!

That is smart economy.

Excellent point. I'd rather have 2 quality things than 20 crappy-so so things.

Just look at all the stuff going in peoples trash every week.

I make no effort to be frugal. But I also don't see much point in wasting money.

When I buy something I usually try to buy good quality even if it means spending more. I could give lots of examples of this but basically it comes down to generally buying the "mid tier" of any product line.

Most products have a cheap version meant to attract people. That version uses crappy materials and is generally cheap. It won't last very long and the company does not value those customers very much. Those with a good experience, which might be random, will buy the higher end later. Those with a bad experience no one cares about. The mid level will have all the good features without the extra price of the heavy branding.

At least that's my experience.

You folks act as if there was no middle ground between top-of-the-line and crappy.

I tend not to buy top-of-the-line computers. The state of the art is moving so fast that it's much better to buy something mid-range because it'll be obsolete long before it breaks down. Even cutting edge tends to be superseded by paradigm shifts. My wife's company gave her a great laptop for travel; she hasn't taken it with her on a trip since sh got an iPad. You get the picture.

Ditto suits. I buy nice suits that fit well and look decent but not high end expensive stuff like Armani and Brooks Brothers because they'll be out of fashion long before I'm able to get a lot of use from them

In short, it's always a value proposition for me. I buy top-shelf stuff, middle-road stuff and even crappy stuff depending on my intended use. Sometimes it's okay to buy crap if you only want to use it one time and can't borrow it.

My philosophy has long been "live below your means so you can splurge when it matters." I'm far from a neat freak so having a high end vacuum is not a priority, although I know it is for some people. My $50 vacuum has served me well these past 5 years and still does a great job on pet hair. Having a computer that meets my needs, however, is a high priority, and I will spend hours researching models and components before buying (laptop) or building (desktop) to make sure I get what I want for a good value. Getting good ski gear was also a priority and I paid more than I'd planned to get a good pair of boots, even after the discount for being the previous year's model. My skis, on the other hand, are also good quality but I bought them dirt cheap at the slope - they were used demo skis that I was able to try out before buying.

Buying cheap can be a gamble, and it's one I've lost a few times but more often than not I've won. This weekend I'll be going camping in my $11 tent (thrift store) that's stood up through some nasty storms while staying dry inside. My favorite dollar store find so far are these flexible plastic drinking pouches, they work just as well as the $10 version despite taking abuse. There are some things I'll gamble on, some things I won't, but for me it always boils down to "is it going to do what I need/really want it to do and hold up reasonably while doing it?"

Similar stories with vaccum cleaners and skis.

We're still using a cheap vaccum cleaner made by Sharp that I bought in 1992; it's very noisy compared with those nearly silent Miele models, but it just won't die and it does the job very well. I think the main advantage to high-end vaccums is lower decibels (my friend has a Miele and you can carry on a normal quiet conversation while he's vaccuming the house) and better dust filtering, good for people with allergies.

For skis, we have this great store called La Poubelle du Ski that sells used ski equipment; I got a very good set of used cross-country skis and poles for under $100, the first skis that ever fit me properly. I bought them in 2002 and 10 years later I'm still using them (well not right now, of course, it's July).

So yes, buying quality is good but you can often buy quality at a discount. Same goes for computers as well: most computer manufacturers offer refurbished equipment, which much of time isn't actually "used" equipment but rather equipment that has been returned unopened. And it's usually still covered by the manufacturer's warranty (sometimes the warranty period is shorter, but it's still worth it). You can usually save a few hundred bucks by buying refurbished.

An amazing variety of excellent clothing ends up at thrift stores: I've found clothes from Patagonia in my local thrift store, paying $5 for shirts that cost $55 and are just as good as new. And Patagonia has a lifetime guarantee, which I've taken advantage of several times when I needed repairs on clothing. They've made the repairs for free or in some cases given me a replacement for free.

If I really need something (then it is vital) I often try to buy "the best" second hand. That way I get great stuff cheaper than the cheapest crap, that last much longer.

Of course if you can get quality but used at 90% off (which IMHO shows how inefficient our used market is) that's a no brainer.

OTOH when buying new, I follow the YAGNI principle. You Ain't Gonna Need It. The first line of defense is borrowing, renting, or doing without. The second line of defense is buying used. The third line of defense is buying the cheapest option that isn't obviously unacceptable. Unless I'm absolutely sure that it's something I'll use on a regular basis (daily or weekly) it's premature to buy a high quality option. If and when it turns out that the activity or hobby is a regular thing for me, I can upgrade to the high quality option. At that point the cheap option would have worn out or broken, or I would have discovered it's shortcomings through regular use, or I would have found and been able to recognize a high-quality option in the used market.

I'm going through this right now with my wife, actually. It's looking like we're going to need to purchase a second vehicle in the next few weeks, and while I'm adament about sticking to our budget (we have about $7k set aside currently for "vehicle replacement"), she has her eye set on a new Mazda CX-5. Since they just came out this year, there is not yet a "used" market for them (certainly not in the $7k range, anyway). She has no problem financing it. I'm more inclined toward a reliable used sedan (like a 2006 Corolla or Civic or something).

Her argument is that she doesn't want to spend so much money on something when "it's not what we really want." OK, but what I don't really want is to be in debt, so how do we compromise here?

The answer is, she'll keep driving our current car, and I'm going to be taking the bus for the next couple of years until we've saved up enough to pay cash for a used CX-5. I'm not happy about it, I'd rather get a second car and save about an hour a day commuting, but I'm absolutely not willing to go into debt for a vehicle.

A vehicle is not a good investment. The depreciation is incredible in the first year or two. As much as it stinks to take the bus I think you're doing the right thing.

Kombat
You really need to get your wife "on the wagon". Stop talking about cars (because for you it is not about cars) and give her the big picture. Sound personal finance, low risk, no debt, building a solid and safe future. Beeing rich rather then acting rich...

It´s your wife!?

Five year old Toyota and Honda is the way to go, keep within that $7.000, save an hour a day. Offer your wife to spend 1/3 of it giving her a massage.

The same way one always compromises with his wife - you do what she wants. Surely you already knew that!

Now, on a more serious note, it sounds like your compromise is just a lose-lose. She doesn't get what she wants while you get what you want - no debt, albeit at the cost of riding the bus which you say you hate.

It sounds like maybe taking on the debt but agreeing to trim your budget to afford the interest and pay the loan off quickly would be a true compromise. What do those cars cost? About $20000? With your $7000 down and maybe a small kicker from additional savings you'll borrow about $10000 and pay about $600 in interest. That's $50 a month and probably less than you'll spend on the bus.

So, while your no-debt philosophy is admirable, it is probably costing you both in money and in wife-happy points.

A vehicle is not an investment. It is a tool. If you need one then you need one and it just comes down to choice.

And depreciation is a non-cash expense. If you keep a car for, say 10 years (my average has been 12 years) then the annual "loss of capital value" entry to your balance sheet is 1/10 the cost. You can balance that against the value to you.

In kombat's case, assuming a $20000 car, the annual cost is $2000. If he takes out a $13000 loan at 5% interest the annual interest cost is about $600 the first year and declines each year until the loan is repaid. The question comes down to whether he gets $2600 of personal value from the car...and how that amount compares to the alternatives of waiting, taking the bus, etc.

In my personal case I have found that with used cars I often spend more in maintenance. As I said, I tend to keep cars a long time, but I'm not convinced that is necessarily optimum either.

Cars these days have great warranties and financing. So in my case I'd go with the saying :"I'm not wealthy enough to buy cheap".

I'd rather get a new reliable car with a 5 year warranty, paying a small monthly fee than buying a used car for half the price, and risking things going wrong due to past ownership and regular wear and tear that would cost me more than the monthly payments.

The internationally famous fishing gear producer "Abu" (from "AB Urfabriken", something like "Inc Clockworkfacroty"), now a days "Abu Garcia", priduced the fishing reel "Abu matic 70" between 1959 and 1964. For his 36:th birthday my grandmother bought my grandfather such a reel, wich he used with his father in law, who was a life long sea pilot on Gotland, until the later died in 1963. When my grandparents built their own country place by a lake in the mid 60:s, the reel followed suit. With a house and three sons my grandfather had little time to use the reel, but his sons did. In the late 1980:s my father teached med to fish with that very fishing reel. In the early 2000:s my grandparents where too old to keep the country place, so it was sold furnished. The fisching reel though ended up at my fathers country place at the west coast of Sweden, but was seldom used since the rod was worned out.

Last summer I happened to find a Abu Garcia rod of the more luxury sort, cork handle and aluminum parts in the exact same red colour as the reel. I snatched it up at a 60% discount at $75.

Today I got the reel in the mail from my dad. Opened it and oiled it up. Aluminum, brass, chrome... No rust. Now the reel feels just as I remember it from when I was a kid 25 years ago.

52 years old. I will use it for the first time in a decade at a fishing trip this weekend. In 4-5 years I will let a fourth generation of my family use it, and learn them the art of fishing. Who knows, if I take really good care of it it might just end up in the hands of a fifth generation, sometime in the mid 40:s.

As stated. It is expensive to be cheap.

>>PICTURE OF REEL HERE<<