This post is part of my Freaky Financial Fridays series, where I argue a case from an opposing view, generally in contradiction to my own philosophy or conventional financial advice.
Comparison shopping sounds like a great idea. Research the best product or service to meet your need, exhaustively look for the best deal, and only make a purchase when you’re sure that you couldn’t possibly save any more money. The problem is that such a method is often a waste of time and thus a waste of money.
Undervaluing your time is selling yourself short. Your time is probably worth a lot more than your employer pays you on an hourly basis. To estimate what your time is worth, you can use this calculator.
Once you know how valuable your time is, you quickly see why comparison shopping isn’t worth it. A quick check on a comparison shopping websites might be worthwhile, but any more effort than that and you’ll probably be spending more money in terms of your time, than you can hope to save. Spending an hour comparing prices and burning gas driving all over town to save yourself ten bucks is clearly not worth it.
Waiting around for a great deal is another way comparison shopping is a losing proposition. The reason is that most new products will come down in price over time. This is especially true of technology products. If you were waiting for a great deal on a digital camera, for example, your best bet would be to wait a year before buying the camera you want today. You’d probably get it for half of what it costs today. But depriving yourself a year’s worth of pleasure from using the product clearly adds to the cost of comparison shopping.
The more your time is worth, the less comparison shopping will be worth it for you. Indecisiveness, exhaustive research, and waiting for the best deal may make the purchase price lower, but that doesn’t necessarily mean that your purchase cost less.
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