3726: How To Find A Bargain When Making A Big Purchase by Michael Smith with Financial Finesse on Intentional Spending

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[00:00:54] This is Optimal Finance Daily. How to find a bargain when making a big purchase by Michael Smith with FinancialFinesse.com. And I'm your narrator, Justin Malek, here reading to you every day to help you save more, earn more, and invest the rest. So let's get right to today's post as we optimize your life.

[00:01:20] How to find a bargain when making a big purchase by Michael Smith with FinancialFinesse.com. Over the last few months, I've been on a quest to add a new skill into my life. Living in Maryland near the Chesapeake Bay with marinas galore, and as a former boat owner, I decided that sailing is a skill that I should learn. I grew up spending lots of time on the bay and lived on a boat for a number of years after my marriage ended.

[00:01:48] But I've always been a powerboat guy. Fire up the engines, get out into open water, throttle up, and head to wherever we wanted to go. I always admired the simplicity and beauty of sailboats, but I've never spent much time on them. I'm going to change that now. But the journey hasn't been easy. Finding the perfect sailboat with a limited budget. I had some parameters that made buying my boat a bit difficult.

[00:02:17] I had a fairly low budget because I bought a house about a year and a half ago and used a large chunk of my savings for that. With a new mortgage and child support, cash flow is still relatively constrained. As excited as I am about learning to sail, I'm not willing to compromise my other goals like retiring on time in order to have a boat today. So within my small price range, I got to work looking and I saw a lot of boats.

[00:02:47] Usually my first thought was, I can maybe make this work. Or, is this a boat or a crime scene? Everything I saw needed a lot of work. And I'm not opposed to that. But some were going to be lucky to not sink when they hit the water. None of them struck me as, this is the one though. Adding up all the costs. I kept looking, kept searching, and then boom.

[00:03:15] In the same week, I saw two that were within my price range and felt like home. Although one had a higher sticker price than the other. That's when I started doing the full-blown calculations of what this would cost me. Things I included. The price of the boat. Monthly cost of a slip at the marina. Insurance. Repairs and upgrades I'd want to do. And so on.

[00:03:41] After factoring in all of that, the full cost of each boat was roughly the same. How to choose. So it came down to preference. When I gave each boat a score from 1 to 100, based on what I wanted from an old sailboat, they both came in at about 90. Which is awesome because the others came in at around 10 to 15 on that 100 point scale.

[00:04:07] These were two serious outliers and perhaps a bit mispriced. What I later discovered is that both were owned by people trading up to much larger and much more expensive boats. And they wanted to unload their boat quickly to avoid paying for insurance and marina costs. With two boats that I valued equally, my buying strategy was to put in an offer a bit lower than the asking price on each one and see what happened.

[00:04:38] What happened? I lost out on one boat to another buyer. And on the other, they gave me a counteroffer which I accepted. So by the time you hear this, I'll be out on the Chesapeake Bay learning how to sail. Wish me luck. I'm just hoping I keep my head low enough not to be hit in the head by the boom as it swings from one side to another. Or be knocked overboard and unconscious.

[00:05:03] If that happens and I'm out on the boat alone, this may be my last blog. The big takeaway for everyone. When you are planning a major purchase, whether it's a car, boat, household appliance, house, and so on, the best way to go about getting the most value for your hard-earned dollars is to have a plan and have a strategy. I went into this with a definite maximum spending limit. It was low.

[00:05:33] Patience was required because I looked at over a dozen boats in person and hundreds online and only found two that were acceptable given my goals. Factor in all the costs. Don't just look at the price of the thing. Look at all the associated costs. For example, when my daughter bought a new car, her insurance rates went way up.

[00:05:58] When buying a major appliance, there are delivery and installation costs to figure in. Don't forget closing costs when evaluating a mortgage. Control your emotions. Don't let your emotions make you buy up. When looking at one boat that had a dirty, smelly, frat house vibe, I walked past another that had a for-sale sign on it, and I looked at that one the next day.

[00:06:24] It was several thousand dollars above my maximum price, but it was nice. And my emotions told me that I could somehow make it work. I had to talk myself down from that emotion and stick to my plan. Emotions can sometimes be the enemy of good decision-making. How I kept my head in the game. In the end, I had a little index card where I wrote down the things that I wanted from a boat,

[00:06:51] including my maximum price and some things that would be deal-breakers. When I was in doubt or tempted to stray from my plan, I'd look at my handy-dandy index card, and it would help bring me back to the rational world. This way, I know that I'll always have smooth sailing, at least when it comes to the financial side of this new hobby. You just listened to the post titled, How to Find a Bargain When Making a Big Purchase,

[00:07:21] by Michael Smith with FinancialFinesse.com. I'll be right back with my commentary. Back in 2010, I started tracking every penny coming in and going out, in a spreadsheet. Back then, I wanted to know where my money went. But these days, I'm thinking more about where I'm headed. Monarch makes that easier by putting my accounts, investments, spending, and savings goals in one place. I still care about every penny.

[00:07:48] I just don't want keeping track of them to become a second job. I like that it doesn't just show what I've spent, it helps me plan bigger purchases and see whether I'm on track while there's still time to adjust. And the AI Weekly Recap flags spending spikes and upcoming expenses. It's like having a financial advisor in my pocket. A heads up, instead of another spreadsheet to manage. Write your own money story with Monarch.

[00:08:15] Use code optimal at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code optimal. Fall savings are happening now at The Home Depot. Save up to $500 on select appliances. Plus, enjoy free delivery when you spend $998 or more. From prepping to cooking to cleaning up, Frigidaire has you covered. The custom flex temp drawer switches from fridge to freezer.

[00:08:44] With more than 15 cooking modes, including stone-baked pizza mode, you can enjoy restaurant-quality pizza in as little as two minutes. Then clean up with the Frigidaire dishwasher featuring the industry's fastest normal wash cycle. Shop fall savings now at The Home Depot. Off the ballot for October 21st, USLAC Store Online for details. Thank you to Michael. I like that he still made room for something he wanted to do. Sometimes advice about saving money can make it sound like anything you don't absolutely need is a bad purchase.

[00:09:11] But learning to sail was important to him. So he figured out what he could spend without giving up something else that mattered to him. And that part about walking past the more expensive boat? You can see how the comparison could change. Before going shopping, you're deciding how much you're comfortable spending. Once you're there, you're comparing what that amount gets you with what a little more could get you. And of course, the more expensive one looks better.

[00:09:40] There's probably a reason it costs more. That doesn't mean your original budget was wrong. Now, you might find out that the budget you had in mind wasn't realistic. Maybe everything at that price needs repairs you can't afford. That's useful to learn too. But you can go home and reconsider it. You don't have to increase what you're willing to spend while you're standing in front of the thing you want. Give yourself a chance to make that decision when buying it isn't quite so convenient.

[00:10:10] So thank you to Michael for this one. And with that, have a great rest of your day. Thank you for being here. And I'll see you tomorrow, where your optimal life awaits.