3 Times When Spending Money Actually Saves You Money

If you are trying to be frugal so you can keep more money in your checking account, it may seem like your goal should be to spend the least amount possible on purchases you make.

In reality, though, this is not always the case. In fact, here are three situations where it may make sense to run up a little higher credit card bill or to take a little more money out of savings to pay a higher price. Why? Because doing so could save you money in the end.

1. When you pay for high-quality professional help

If you need the services of a professional, it often doesn't pay to find the cheapest professional out there. Quality service providers often charge a premium price, but this cost can be worth it.

Think about it: If you pay a cheap mechanic to fix your car's brakes and they scam you by putting in used parts or even the wrong parts, or if you pay a substandard lawyer and you lose your case, you may have saved money upfront on their service fees, but you'll be out a lot more in the end.

To make sure you find the best quality help, ask for referrals from friends and loved ones and read online reviews carefully. Choose your service provider based not on who is offering the absolute lowest price out there, but who is the most competent, trusted person whose expertise you can afford.

2. When you buy quality products for items you must interact with regularly

There are some items that you have to use every single day and that can make a big impact on your quality of life. It can pay to spend more for these things and not buy the cheapest version. There are a few reasons for that.

First, the items are less likely to wear out or need costly repairs if you buy quality versions that cost more than cheap ones. If you can buy a $50 pair of shoes and they last five years or a $10 pair of shoes and they last six months, you're better off with the more expensive pair.

Second, buying a better quality product can help you avoid a lot of aggravation. If every time you use an item, you're frustrated because it doesn't work as expected, you're likely to replace it sooner than if you had bought a better product in the first place.

3. When you buy comprehensive insurance

Finally, buying more than the minimum required insurance coverage could end up saving you a lot. See, most states only require liability auto insurance. This pays for damages you cause to others, but that doesn't pay for your own losses. And if you're buying a home, mortgage lenders generally require only homeowners insurance coverage for the dwelling, but not for personal possessions.

Getting too little insurance coverage could leave a person with huge bills when a disaster happens, though. A driver without collision coverage who hits a deer or who gets into a single car accident could have to pay all costs of repairing or replacing their car out of pocket, while a person who has only dwelling coverage could have to pay to replace all their personal items after a fire. It's better to have coverage for all these costs in case something goes wrong.

The bottom line is, cheaper isn't always better. Consider the circumstances carefully to decide whether spending more upfront is going to save your personal finances from potentially much bigger costs over the long run.