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Welcome to Money Talk for Real, a podcast where I talk about making money, spending money, and everything in between. I'm Nick, and in this episode, I want to talk about cheap versus expensive and what's actually worth it. When should you spend? When shouldn't you spend? Not everything cheap is a good deal, and not everything expensive is necessarily a waste. Most people get this wrong. Some things are worth spending money on, while others, of course, absolutely are not. And recognizing when it's good to spend money and when it's not good to spend money is something that can save you a lot of money in the long term. Now, this isn't about being cheap, it's about being smart. The goal is to spend where it matters and cut where it doesn't matter. The goal here, again, it's not necessarily to spend less, it's just to spend better. So let's jump right in. Number one, I would say is cheap clothes versus quality basics. Cheap clothes are going to wear out fast. We've all had that bundle pack of three t-shirts that gets a hole in it the first time you wear it, right? Um and when stuff does wear out fast, it has to be replaced more often, which can get expensive, you know, you're spending more money. Expensive clothes, at least to a point. Now I'm not talking about $900, you know, Brooks Brothers or, you know, Tom Short or something like expensive err, that's not a word, but more expensive clothing will last longer. It fits better, it's just more comfortable. Um, you're gonna be, you know, mentally more healthy, in my opinion, because you're gonna feel better about yourself because of the comfortability and it fitting better. The cost per wear of clothes matters, right? And meaning, yes, you spend more on clothes, but it may last you longer. I would spend a bit more in this category on clothes, on staple clothing. And when I say spend more, don't take that or or misinterpret that as a free pass to go just fashion shopping. I'm not talking about name brand designer clothes. I'm talking about a little bit more expensive clothes than just your basic cheap clothes that are going to wear out. The next category is tools. And um, this one it hits home for me because I'm handy. I do a lot of woodworking, I make a lot of things, I have a lot of tools. Cheap tools versus quality tools. And I can tell you from experience that the cheap tools, they break all the time. They break very quickly. They're just cheap parts, cheap components, more plastic than metal, that kind of thing. And when they break all the time, that's frustrating. That's gonna mentally burn you out or mentally fit, you know, maybe physically stop you from doing the project that you're trying to get done. Maybe you're not building for fun or as a hobby. Maybe you're legitimately trying to repair something. And when it breaks, you get frustrated. And when you get frustrated, you get burnt out. And when you get burnt out, you don't finish the project that you started to do. Cheap tools are also just not as accurate. And that may not matter for some things. For example, a mechanical type tool, something that moves something, whether it be a wrench that moves a bolt, or a socket that moves a you know, a bolt, or a screwdriver that means a screw, those or moves a screw. Those don't necessarily have to be accurate. But when it comes to tools that are cutting something, especially on a project that does require a higher level of accuracy, the cheap tools are not going to be super accurate. Quality tools, however, obviously last a lifetime, or they at least last for several years. You get better results, you get more uses out of them. There's something that, you know, they they are what I consider high traffic items, meaning they get used all the time. Tools are designed to be used, they're designed to be worn out. And the higher quality, more expensive tools are going to wear out slower than the cheaper tools. So sometimes worth it it is worth spending more, especially if they're tools that you use often. Now let's talk about food. Cheap food versus quality groceries. And again, when I say cheap food versus quote, expensive food, I'm not necessarily talking about Michelin star restaurants. Okay, I'm talking about quality food when quality is usually associated with more money. The cheap food is ultra-processed, right? It's usually a lot of filler, low nutrition in the cheaper food, whereas better quality groceries, better quality food is healthier and generally more filling and gonna fill you up. They're gonna fill you up and make you feel better as far as like, you know, physically feel better because it's better quality. Cheap food can honestly cost you down the road medically, right? Or even just with your health, it can cost you. Um, and I would definitely recommend spending a bit more here. Again, within reason. I'm not saying spend more like every night needs to be a $300 date night at a restaurant. I'm just talking about a little bit more quality groceries. And I will probably talk soon about going with name brand versus generic brand. And you can still go the generic brand route, but still being of better quality, a little bit more expensive. Again, I can get into that later, but I will move on now into furniture and the difference between cheap furniture versus solid pieces. The cheap furniture honestly is typically made of particle board, and particle board is cheap. They have short lifespans, right? That those cheap furniture pieces do not last. One person leans up against it wrong and it's cracked or it's broken. Whereas quality furniture lasts for years and can easily or easier be resold. So if it's a piece of furniture that you think you want now, maybe your sit um situation in life changes and you need to resell it, you're gonna be able to have an easier time reselling a quality piece of furniture over a cheap piece of furniture. Buy once, cry once is a saying that I've told people when I've made them furniture. It's like, you know, what that means is you're better off to buy once, cry once, meaning spend the money up front. Feel the pain of spending that money now, but you never have to do it again because you bought something that is of such high quality. And that is much better than replacing something multiple times. How frustrating is that to have to replace a nightstand in your bedroom two times a year because it's so cheap. Not fun. Spend more on the key pieces or the high traffic usage pieces, the stuff that's going to get used all the time, like a nightstand. You're probably putting your phone in it or on it um every single night, right? That's something that I would recommend going a little bit more expensive on. The same applies to shoes. I've talked about clothing, but let's talk about shoes specifically. Cheap shoes are uncomfortable. We all know that. I don't have to tell you that. And they wear out fast, especially if you're walking a lot, if you're running a lot, if you're working in shoes a lot and you're on your feet a lot. They're gonna wear out fast. And I'm not saying they're wear out, they might not fall apart, they might not just explode at the stitching, but they're gonna wear out, meaning they're not gonna provide your foot with as much structure and support that you need for your ankles and your heels and your, you know, the balls of your feet. Quality shoes, however, will offer support and they're gonna be durable. They're gonna last longer. You're on your feet all day, right? Take care of your feet. It's literally the only port of your body that touches the ground during the majority of your life. You're walking around, right? So spend more on your feet, in my opinion. Now we'll move over to some things that I would recommend maybe potentially going a little bit cheaper on. Number one is freaking cell phones, expensive phones versus the mid-range phones. Expensive phones, there's a huge price jump, but you only see small upgrades. Okay, you're not there, yes, there's a difference between the iPhone 8 and the iPhone 16, but there's not that big of an upgrade for the amount of price point that you would have bought if you would have bought the 8, the 9, the 10, that you right. So from the a better example may be from the iPhone 15 to the iPhone 16. Those upgrades, there, of course, there are upgrades. I'm not saying there's no upgrades or no differences, no new features, but for the price that you pay, I don't think it's worth it, in my opinion. Mid-range phones do 90% of the same stuff. And again, there's that 10% that maybe it doesn't do, but are you really using all those features? You might be paying for features that you don't use. You might be paying that big price tag to buy that new phone for stuff that you just don't use. And so phones is something that I would recommend going cheaper on. Next, I would talk about the brand names versus the generic products. I said I would get to that. And with brand name products, it's often the exact same quality, just a different label. You're paying for the marketing, you're paying for that company to brand their product. It's a brand name. This can be food, but it also can be medicine, it can be household items, it can be female products, right? You're paying for the brand when you buy the brand name. You're not necessarily paying for the product or the quality of that product. Again, in my opinion, something to go cheaper on. Now let's talk about the big one amongst a lot of Americans is expensive cars versus reliable used cars. Expensive cars depreciate like crazy. As soon as you drive it off the lot, the value of that car goes down. Expensive cars also have high monthly payments. My opinion of monthly payments, I might have mentioned it in a previous episode, is that I absolutely hate them and they are going to be the death of people if you're not careful. Used cars can be reliable and much, much cheaper. In fact, you may be able to get a used, reliable car paying cash instead of having a crazy monthly payment. Again, cars lose their value so fast. They go down so fast very quickly, and they go down quicker than you're paying them down. Meaning, if you buy, I'm going to use an example, I have a $100,000 luxury vehicle, and your payment on that is $1,500 a month. So after 10 months, you've paid $15,000. But after 10 months, the value may be down to $80,000. So you've lost $20,000 in value, but you've only paid $15,000 towards the car. So I would go cheaper. I absolutely would get a reliable used car. I'm not saying everybody deserves to drive a beater. You need it to be reliable, is the key word here. Just also maybe not super expensive or luxury. You don't need that. You're trying to keep up with people that you don't know their situation. You don't need a luxury vehicle. Next, I would talk about trendy items versus the timeless items. With trends, they typically have a short lifespan and they go out of style. They are a trend, right? It's not a permanent thing. Timeless items are usable long term. Trends are designed to keep you buying stuff. That's the biggest gimmick in the trinket kind of world is a trend because, again, it's designed to make you spend money and keep buying stuff to keep up with the fad. Timeless items are usable long term. And I'm not going into specific examples here. I'm just talking about in general trends versus timeless. Just be careful and avoid overspending. Lastly, I would talk about coffee. That's another big thing in America and other parts of the world, but specifically in America, fancy coffee versus eating out, you know, uh, or I would say fancy coffee andor eating out versus homemade stuff. Daily small purchases add up fast. I've talked about that before. This is where a lot of people lose the most amount of money because you could laugh at me right now and say, hey, it's only $5 for a coffee. What's $5? Well, $5 isn't a lot, but if you're doing that twice a day, maybe you get a coffee on the way to the work and then you get one mid-morning, maybe you even get one in the afternoon to boost your caffeine after lunch so you get through the day. Now you're at $15 a day. That might not seem like a lot either, but multiply that by 300 days a year. Okay, that that does add up, right? And everybody's situation is different. I mentioned that a minute ago. So if, you know, maybe that's still not a lot to you, but it's certainly enough to if you're doing $15 a day times, let's just say 20 days a month, that's $300 a month. That's a pretty significant amount of money considering what you're getting. You could absolutely go cheaper here, make coffee at home, and you could you could find on the internet the recipes to a lot of these places. I understand there are some trade crafts, some trade secrets that, for example, Starbucks or Dunkin' Donuts might not give you their recipe, but you could make it taste very, very similar and maybe just compromise if it's not the exact taste for the amount of money that you're going to save. With all of these, the simple rule here is to spend more on the things that you use often and that last a long time. If there's something that's more of a disposable item or something that's, you know, a consumable product, I would go cheaper, in my opinion. Spend less on the things that you replace often and don't add real value to your life. If it's not adding real value to your life, it might not be worth spending the money on it. If it improves your daily life and it lasts, then spend more. But again, if it's temporary or replaceable, just save your money. That's just my opinion. Thanks for listening to this. Leave a five star review on your podcast player if you do not mind. I'm trying to grow this podcast, and I will catch you on the next episode. This is Money Talk for Real.