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When Paying Premium Can Be the Smart Move

Which splurges are worth your money? Some things are worth spending the max on—simply because they can give us a better life or experience. Or the more expensive alternative could actually save you money over time. But for other things, perhaps frugality is the better route. It’s important we identify things that are most important to us and spend accordingly.

Here is a list of expenses we all have, that may be worth paying a little more for, rather than hopping on the lowest price.

Household Upkeep

Home Improvements & Repairs
As a homeowner, you’re responsible for everything that goes wrong, especially when situations affect people outside of your family. For many types of home repairs, the DIY route is okay, depending on your level of comfort. This could be simple tasks, such as changing filters and cleaning out the garbage disposal, or more complicated chores, such as replacing the toilet. However, taking the cheap option could be an expensive mistake.

Be forewarned: Anything to do with electricity, gas or leaking water (including roof and foundation) can cause serious home structural damage, and should be turned over to professionals. Additionally, if you ignore these problems, it could be hard to sell your home down the line.

According to Consumer Reports, appliances represent the third-largest energy spend, at 9% of your energy bill. Whether you’re moving to a new home or replacing broken appliances, the quality and durability have an enormous impact on their allotted lifespan. Therefore, think long-term when buying any major appliance. An eco-friendly fridge or washing machine may have a higher initial cost, but will greatly reduce your electricity and water consumption—leading to lower energy bills down the road—and even some rebate opportunities.

Car Repairs & Maintenance
Scrimping on car repairs is a perilously bad idea. Early repairs of something that’s causing issues is better than the greater cost of larger repairs if your car totally breaks down. Always think about the components that can ruin other components. A good example is paying for regular oil changes every 3,000 miles or 10,000 with a quality synthetic lubricant that will keep your car’s engine strong. Sure beats the cost of a seized engine! Pro tip: Even if you have seen a YouTube video or received advice from your local auto store expert, some things are better left to the expert.

Of course, every car situation is unique. If repair costs seriously hurt, you should think about buying a new car. If you have a dependent or small child, it’s worth buying a vehicle with the latest safety features, as listed by Consumer Reports.

Healthcare Expenses

Fast food restaurants are everywhere, available 24 hours a day, and are often cheap. But it’s best to invest in your health by paying a bit more for real, naturally- and locally-grown produce, eggs and dairy, as well as buying high quality supplements. Long-term results will be that you won’t waste the latter part of life dealing with health problems and medical bills. If the goal of retiring early is to own and enjoy life, then being healthy is at the top of our list and not to be tight-fisted with.

Your everyday skincare regimen is also important to your health. A licensed esthetician (a person who specializes in the beautification of the skin) will likely suggest that you avoid drugstore and cosmetic products and encourage you to try a professional line of skincare. Products found at your local drugstore are mass-marketed to entice the buyer with impressive claims, however these products are generally made with high chemical, high fat synthetic ingredients that have little to no clinical value to them.

Medical & Dental Care
Treat your health as the valuable asset it is, and don’t hesitate to spend money to take care of yourself. This means spending on things like your monthly medications, regular check-ups and paying for a quality health and dental insurance plan. The peace of mind of being covered for emergencies such as accidents, broken bones or toothaches is priceless. Money is important, but your health should be a priority.

Mattress & Pillows
You spend more than 40% of your life in bed. Best to be comfortable. Include your pillow(s) too. Consumer Reports advises that you lie down on any mattress you’re considering buying and urges you to spend a long period of time checking it out. Buying a good mattress also ensures you’re getting a quality product that will last several years. A good, queen-sized mattress can cost at least $1,000, according to the mattress-buying website Goodbed.

Consumer Reports also advises that you determine whether you’re a side, back, stomach or combination sleeper, and then look for a pillow recommended for that position. Most pillows only last about two years, and if yours doesn’t pop back when you fold it in half, it may be time to shop for a new one.

Personal Items

Work Clothes & Shoes
It’s not just to create a top-notch first-impression. Paying for quality fabrics for your work clothes means perhaps paying 2-3 times the average price, but the items will last longer, and you’ll have less clutter. Shoes for work need to be high quality and comfortable. Plastic soles aren’t comfortable and don’t last very long.

Running Shoes
Poorly fitting shoes or ill-constructed shoes can lead to more injuries. When you first see the price of a decent pair of running shoes, you might suffer from sticker shock, and wonder, “Is it really worth it?” Making the jump from $50 department-store running shoes to your first pair of $100 running store shoes, you’ll most likely notice a huge difference. According to The Wired Runner, “Broadly speaking, running shoes are typically more expensive when there is more cushioning. It costs a little bit more to get that extra material. The foams that make up the cushioning midsoles cost lots of money to develop and manufacture. It’s this techy aspect of the shoe that can drive up price. More foam material, more dollars.”

Costs will also vary from model to model, so you’ll want to check out reviews of the specific shoe that you’re interested in to see if it’s worth the price. Or go to a specialty running shoe store and try on a few.

Professional Services

Homeowners Insurance
Homeowners insurance is required by most mortgage lenders. This insurance doesn’t just protect your house and property, it also protects you, your guests and your belongings.

Every homeowners insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur. When selecting your coverage limits, be sure to consider things like the potential cost of rebuilding your home or replacing all of your lost belongings. That way, you can be better prepared if your home or possessions are damaged or destroyed by a fire, storm or other crisis.

Standard homeowners insurance does not cover flood damage; this type of policy has to be purchased separately. If you live in a flood-prone area, this is a worthwhile addition to pay.

It’s good to review your coverages annually to make sure to cover any major purchases or additions to your home.

Auto Insurance
Like home insurance, car insurance is a must if you own a vehicle. Not only is it required by law, but it can rescue you from financial disaster. If you own a car, you must have car insurance in almost every state in the country.

Only pay for what you need? Hardly—it’s rarely the best financial decision to choose the minimum amount of insurance required by your state. These coverages are designed to protect others, but it doesn’t do anything to cover your bills or property when you’re at fault in an accident.

Spending more for full or collision insurance keeps you covered from damage caused by accidents that don’t involve another vehicle, like road hazards, wildlife or hitting a stationary object—instead of just the minimum legal requirements. It’s smart to set up an in-person meeting with your agent to discuss what you do and do not need.

When it comes to the law, you really don’t know what you don’t know. That’s why it’s best to consult with someone who does know what they do know. A cheap lawyer or accountant is still expensive, and can create messes that will require you to hire a more expensive professional to fix later.

Professional Mover
Few things in life are as aggravating and stressful as moving. Professional movers understand the best ways to navigate the roads and how to handle your belongings to keep them safe and protected. Knowing that your possessions are in safe hands will help to ease your mind on moving day. They can be a more reliable option, rather than attempting to move with the help of friends and family, and can expedite and simplify your move.

Wedding Photographer
There’s more to photography than an expensive camera. So many couples are opting to hire non-professionals without being fully aware of the risks. They really don’t understand the skill and artistry that’s involved in photographing a wedding. There is only one chance to get it right, so it is best to hire a professional that you trust, for results that are designed to last a lifetime.

Budget concerns
Sometimes it is too easy to get caught up in the “it’s only x amount of dollars” while in the moment without realizing the true cost of an item or service. If you’re concerned about balancing the need for these vital budget areas and the facts of your own financial situation, consider using a budgeting tool.

If you decide that you need to make one or more of the purchases above but do not have the cash on hand, we recommend you check out our article Stop Living Paycheck to Paycheck, and you should have enough extra cash to make the purchase in no time.

Resources: Money Crashers, LLC,®, LLC, Savoteur

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