No one likes to part with money, especially when there’s a cheaper option on the table. But often, forking out a higher amount upfront can pay dividends down the track.
1. Regularly servicing your carto avoid expensive issues in the future
Mechanics get a pretty bad rap.
Most customers assume they’re getting ripped off when a “basic service” sets them back over $250. But mechanics are highly-skilled workers and, for the most part, are simply doing what it takes to get your car running as well as possible.
Still, it’s difficult to part with such a large sum of cash every 6-12 months.
If your head gasket is on its way out or the timing belt is nearing its expiration date, your mechanic will likely pick it up during a routine service. Trust me, that’s far better than being skull dragged into the workshop after your car conks out on the side of the freeway.
2. Buying your phone outrightto avoid paying more in the long run
When you’re looking to upgrade your phone, $60 per month might fit nicely into your budget. Unfortunately, you’ll end up paying a premium for the convenience of spreading your payments over 24 months.
Many mobile providers offer an introductory price for the first few months, then hike up their fees once you’re locked in.
Buying a phone on a contract also takes away a lot of the flexibility that comes with owning a device outright. You’re limited to the plans that particular provider has available, even if they don’t have the best service or offer the best value.
3. Paying extra off your debtsto avoid paying more interest
Often, when you take out a loan, car finance or begin accumulating credit card debt, you see the minimum repayment and think “sweet, I can afford that!”
If you manage to score a great interest rate, making your regular repayments is enough. It’s when the interest rate creeps into the twenties and thirties, like with a credit card or payday loan, that’s when making only the minimum repayment can really sting in the long run.
For example, if you take out a high-interest loan of $10,000 at 23% ouch , you’ll end up paying close to $7,000 in interest over a 5-year period. However, if you can throw an extra $100 at that debt each month, you’ll bring the interest down to just over $3500.*
If you find yourself with a few extra bucks, you might consider paying it off your debt before you're tempted to spend it on something frivolous. But be sure to check with your lender if there are any early repayment fees attached to your loan.
4. Buying high-quality clothesto avoid repurchasing items more frequently
There’s a reason some things cost more. Quality comes at a price. So too does being an ethical shopper. Cheaper goods usually equal cheaper labour, and in the worst cases, unpaid, exploitative labour.
Put your money where your morals are and embrace the slow fashion movement – buy less and buy better.
The benefits of going minimal with your wardrobe are manifold. A sturdy pair of boots might set you back a few hundred bucks at first, but if you do your research and choose the right pair, you’ll be kicking around in them for years to come. Otherwise, you’ll be replacing a cheaper pair every six months when the heel comes unstuck or the sole blows out.
Adopting a minimalist wardrobe – a personal uniform, if you will – is also said to free up the mind for more important decisions. The late Steve Jobs was famous for his signature black turtle neck, Dr Dre rocks his Air Force 1’s every day, and even Albert Einstein purchased multiple versions of the same grey suit because he didn’t want to waste brainpower choosing an outfit every morning.
5. Buying food in bulkto avoid paying more per/100g
$12 for a jar of peanut butter sounds expensive, and buying a literal bucket of hummusyou know the one sounds like overkill. But when it comes to grocery shopping, bigger is often better. It’s certainly better value, anyway.
Next time you go food shopping, ignore the biggest number on the price tag. Look at the ‘per 100g’ number, especially when you’re comparing items with a long shelf life like rice and pasta. If you’re going to end up buying another bag of rice next week, save yourself some coin and boot space and grab the bigger one with a lower cost per weight.
Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.
*Calculations based on a $10,000 loan at an interest rate of 23% over a 5-year loan term, paying monthly instalments with no fees. Total repayments would amount to $16,914 if only the minimum repayment of $282 per month was made. If an additional $100 per month was contributed to the monthly repayment, the total loan cost would be reduced to $14,569. Calculated using the MoneySmart Personal Loan Calculator, https://moneysmart.gov.au/loans/personal-loan-calculator