You often hear personal finance bloggers (even me), financial experts, and the media talking about cutting expenses in rough economic times. Yes, it’s true that cutting expenses is an effective way to “earn” more money, but that’s only half the story.
Sometimes it makes sense to spend money to save money. Let’s call that “spaving.” Spending to save= spaving. You may be thinking I’m bonkers, but just keep reading.
Learn more: 7 Tips For Living On One Income (or Less)
Before I continue to tell you why you should spend money I want to share the definitions of some common personal finance phrases/words. These are my definitions, so don’t take them as the true definitions. 😉
I define “want” as something that you either a) don’t need, b) talked yourself into thinking it is a need, or c) advertising worked its’ magic and convinced you you of how awesome your life would be with your new widget.
“Cheap” I define as something (or someone) that only takes into account price on any item. We’re talking cheap toilet paper, cheap clothes, cheap cars. Cheap people are all about spending as little as possible. Some people will claim that a purchase was cheap or brag about the sale price of something they bought, but they are often spending money on things that don’t need and justifying it since it’s “cheap.”
Learn more: Here are tips about cheap – but good – things and activities.
“Frugal” is spending a little as possible on things you need in relation to their value. It’s a way of life for some people, and it’s catching on with the current economy. People who practice extreme frugality are spending a lot of their time to save a few ¢ents. Frugal people know that their time is worth more than the 10 ¢ they saved for an hour of work.
Learn more: I’ve shared lots of ideas for frugal activities!
I think most people who define themselves as frugal would be considered “spavers.” Spavers spend money when and where it makes sense to SAVE money down the road. They also may spend on things that are important to them. It’s all about finding the balance between watching what you spend, and enjoying your money. After all you work too hard not to enjoy it!
Let’s look at one way I have “spaved” money in the past. We’ll use my vacuum cleaner as an example.
Original Cost: $500 ($399 now) + $50 hose/ 5 years use = $110/year
Previous Vacuum (Hoover which was rated well by CR)
Original Cost $300 + $100 in parts + $80 for bags / 18 months = $320/year (ouch!)
The more expensive vacuum has been a big savings. Before the Hoover we owned 3 other vacuums, each for about a year. At the time the Dyson was new and super expensive, and seemed like a luxury purchase, but knowing that we vacuum almost daily, and sometimes several times a day, purchasing something so reliable has been a huge blessing.
When the hose on our Dyson recently broke we were able to do a quickie repair with duct tape while we waited for the part to arrive. It seemed pricey at the time, but having repaired other vacuums myself I can say this was truly inexpensive, and easy to do.
Learn more: Money Saving Tips For Buying Appliances
Another example of spaving happened today. We signed a contract for quarterly pest management with a locally run pest control company. We discovered an ant hill or I should say several ant hills with large, fast, MEAN ants right at the corner of the area where the playset is being erected. We tried to get rid of them ourselves by purchasing a spray, and then yard stakes, but neither worked.
$15 for the spray + $10 for the yard stakes= $25 for nothing!
I called the pest control company, and the inspector came out this morning to take a look. He could get rid of the ants for a one-time fee of $130, or they could come out and do quarterly maintenance for almost the same cost. Since this is the first of several calls we’ll make this year (we usually end up with little ants in the house, and some other odd thing in the yard-last year was ground bees, plus carpenter bees and wasps), we are spending the money to save it down the road. The reason it is spaving is that the company will come out at no cost for a multitude of problems including roaches (ew), ants, and even rodents. (the list was fairly extensive)
A quick analysis of last year’s spending on pest problems, coupled with the desire to de-tickify our yard as much as possible made this purchase make sense. Our oldest daughter had Lyme Disease 2 winters ago, and while she is doing fine, I would prefer that no one else have to go through what she did. (For those who don’t live in the Northeast US, deer ticks are a huge problem in our area, as they carry Lyme Disease which can be terrible and disabling if not caught early enough.)
Learn more: Successful Saving Strategies
By being frugal, you can save money on what you need, while avoiding being cheap. That is spaving, the new way to spend in the current economy.
Do you spave? What are some of the ways you’ve spaved money?