Multiple parents recommended we should pay more for a new stroller then we thought. This surprised me and since we’re about to be making lots of spending decisions for my son, we came up with a two step framework for deciding if we should pay up
- Frequency of use – how often will you use the item?
- Quality Delta – What’s the gap between cheap + expensive options?
This creates a 2×2 matrix:
| Big quality delta between options | Small quality delta between options | |
| Use good often | Buy expensive option | Individual decisions. Lean cheap |
| Rarely used good | Individual decisions. Lean cheap | Buy cheap option |
In the case of our stroller because we’ll use it every day for a couple years, and a good vs bad stroller makes a big difference we decided to pay up.
I previously touched on a few other factors in our overall strategy to wealth building. Other factors that may influence if we pay up
- Does paying up save you money or time?
- This is almost more of an investment
- Even something simple like buying reusable bags may make it easier to carry in groceries or mean you don’t have to pay for new bags every time at the store
- Is it related to a hobby?
- Pay up for your hobbies, and be frugal in other places
- If skiing is your passion, buying nice skis makes perfect sense. If it’s something you don’t care about, then there’s no need
And finally as a general rule, we pay more for experiences with others than items. Experiences will generate moments and memories that last a lifetime