4 Times I Always Buy the Cheapest Item

When it comes to the purchases I make on a regular basis, there are some things I don't mind splurging on. In fact, I'm perfectly willing to break out the credit cards and buy more expensive items when quality matters. This includes purchases like safety equipment for my kids such as car seats and high chairs. And it also includes healthy foods.

But while I'm fine with spending more when it matters, there are four situations where I aim to spend the least amount possible and buy the cheapest item available so I can keep more money in my bank account. Here's what they are.

1. Investment funds

The No. 1 situation where I'm a cheapskate is when I'm buying investment funds. Specifically, I look for the absolute cheapest exchange-traded funds that track the performance of the market.

I do this because I believe that actively managed investments -- which cost more -- are almost never worth the price since they rarely outperform the market (and I can essentially invest in the market as a whole by buying an S&P 500 index fund or a total market fund). I also do this because I know investment fees can add up to tens of thousands of dollars over the years.

To me, it's a no-brainer to pick the cheaper investments that I think will make me more money in the long run.

2. Items that wear out quickly

Whenever there are items that are going to wear out quickly or be used for a short period of time, I opt for cheaper options. This includes things like play clothing for my children, which is very likely to be outgrown or stained after just a few months.

While I opt for more expensive clothing for myself so I can avoid having to replace it after a short period of time, my kids simply do not wear clothing long enough or keep it clean enough to justify buying the "better" models.

3. Tech gadgets

Other than computers and cellphones, I've found that most tech gadgets like headphones or smart TVs simply are not worth paying more for. The $400 TV from Walmart performs just as well for my purposes as the $1,500 TV from a fancy electronics store. And for my basic podcast listening, I don't really need the absolute best earphones to take my dog for a walk. I'd rather spend money on other things since I know the technology is changing so fast that my tech gear will be outdated days after I get it.

4. Consumables

Finally, for consumables that are used up quickly, like zip-top plastic bags or paper towels or aluminum foil, I've noticed very little difference between the cheap and expensive brands. I don't feel the need to be loyal to any particular products. Instead, I buy the cheapest items I can find that are on sale.

By being smart about when I splurge and when I cheap out, I can make sure that I don't overspend on things that won't really add any value if I opt for pricier versions.