This is something I've been thinking about for a while: things that I'm willing to pay a premium price for, though I can find them cheaper elsewhere. For us thrifty types, this is sometimes a tough pill to swallow – but often makes sense.
I'll often buy at a premium if the following are true:
- The item is much better quality than its competitors – and will last longer
- There is an unbeatable guarantee or warranty with the product/service
- The customer service is exceptional
- It's one-of-a-kind
- I want to splurge (rare) or buying a gift
Years ago, I bought these socks that after just a few weeks of wear would get holes in the toes. Because I was so cheap – and didn't want to pay for a better pair – I would just buy then again and again (thinking it had something to do with me!). Little did I know – I could have paid for a higher quality sock for a premium price with all the money spent on the lesser-priced / lesser quality sock!
Of course, with everything, it's important to be aware that you aren't being taken advantage of. Crafty marketers employ a tactic called “premium pricing” where they inflate the price of a comparable product/service. This is often done to increase the perceived value of something. Many folks believe something is better quality if they have to pay more for it (even though it may not be true).
There is definitely times when it just makes economic sense to pay for things at a premium (even though we can get em cheaper).
The following are some things that I will no longer skimp on (or rarely skimp on).
I've written before about my own transformation when I was watching my wife go through some health issues. Eventually, I started to see her change and decided to adopt some of her eating habits. Through some of our research, we have come to the conclusion that what we put into our bodies is pretty important. Unfortunately, better quality food isn't cheap. But, I've personally found the results to be undeniable. I have lost weight and lowered depression symptoms, among other benefits.
This is one item that has taken me a while to adopt. My mother always preached to us the importance of good shoes and always made sure we had a decent pair. But only recently have I come to realize the importance of this after having some knee problems that were a result of poor footwear. Never again.
This is a future purchase that I will no longer skimp on. Currently, our mattress is really bad. Almost every morning my wife and I wake up with lower back issues. This is one of those “capital” expenses we have yet to budget for – but really need to do so in the near future as we tend to spend a fair amount of time on this.
I won't say any more about this.
I can't tell you how many wallets I've gone through in my time – but it's a been a few. I would get some pretty cheap ones – and they would get tattered and worn out in no time. Awhile back I heard about Saddleback wallets while doing some research on products with incredible warranties (they offer a 100-year warranty!) – and soon after bought one at a premium price. It's a great wallet and maybe the last one I ever purchase. (Four years later – I still have it and looks like it could hold for another 95 years).
I'm glad we have a good agent who's made sure we have quality homeowners insurance, as we have needed it on a couple of occasions already. Most lenders require that homeowners have some sort of hazard insurance for their home – but you may want to include something more comprehensive.
Besides what I've listed here, is there anything else that you will pay a premium for?