Quality vs Cost
Help Determine Which Product Is Better For You
Whether you’re standing in front of a shelf at the grocery store, shopping online, or walking around a car dealership, you may wonder: “Do I go for the ‘nicer’, more expensive, option or choose the cheaper one to save some money?” At the end of the day, what you are really debating internally is quality versus cost.
Three very common assumptions as to why an item could cost more than a similar option are:
It’s made with better quality parts or ingredients
Something about it is unique or difficult to recreate
It’s associated with a well-known name brand or company and therefore must be better
Those three general speculations can then lead you to think of the following outcomes:
The item will perform better than its counterpart
You will spend less long-term for maintenance or repairs
The item will last longer
The seller or manufacturer will be easier to work with and provide an overall better buying experience
The item holds its value better in case you want to sell it in the future
We often make the opposite assumptions when it comes to lower-priced items. Sometimes our assumptions are correct but many times they are not. It’s important to recognize that higher costs do not always equal a ‘better’ product.
It’s not always easy to tell the difference between the quality of differently priced items. For example, a higher-priced version of a piece of equipment may come with ‘bells and whistles’ that you may not need and the lesser-priced alternative may serve your purpose just fine. There are also instances where it might be worth it to pay more for a product you will have confidence in, especially a product that could be dangerous if it broke or malfunctioned. The differences in customer service can also come into play.
The reasons for purchasing an item over another will be as varied as the items themselves. Keeping three important considerations in mind can help you find the balance between risk versus reward:
The possibility and severity of negative outcomes if the item does not work as well as expected
The cost of upkeep, repairs, or replacements
Reviews about the quality of the item
Researching different options can help you make an informed decision when deciding which to purchase. Are you considering a big purchase? Use this Asset Depreciation Calculator to help you evaluate what an asset may be worth each year. For more information about shopping smarter and saving on expenses, visit our Balance Financial Fitness page for related financial articles, videos, and various calculators.
This article has been brought to you by Banzai, in abstract with First Source Federal Credit Union.
Bring This Session to a Live Setting
If you would like to schedule our Community Educator for a seminar or workshop for any Financial Friday educational topic, please email your request to FinancialEducation@fsource.org
Interested in learning more? There are also additional resources which have been created specifically to help you best control and leverage your finances. Feel free to use these anytime!