Recently I ran into a frugality conundrum. I turn 30 next year, and one of the key skin care recommendations is to wear daily sunscreen, especially on your face. Sunscreen helps to prevent aging, but it also prevents skin cancer. Since I’m already prone to moles and other skin reactions from a single sunburn, I figured this is health advice I should heed, despite being an otherwise complete beauty minimalist. (That’s my fancy way of saying I’m too lazy to wear makeup.)
In my ignorance of the beauty world, I thought getting a sunscreen would be fairly simple. I only had two criteria: I didn’t want it to make my otherwise pretty-good skin break out, and I wanted the product to rank at a 3 or below on the Environmental Working Group’s Skin Deep Database (because slathering my face in cancer-causing cream to prevent skin cancer seems counter-intuitive). No big deal, right?
Oh, what a sweet summer child I was. My search went as follows:
- Order a moisturizing face sunscreen from Amazon. Learn it’s a little too moisturizing as my face starts to break out. $7
- Use a coworker’s recommendation for an oil-free BB cream that is the amazing stuff of dreams… only to learn that despite Amazon’s claims to the contrary, it doesn’t have SPF. $6
- Research oil-free sunscreens online. See that the most highly recommended run $30-$40. Freak out on personal finance Twitter, where everyone reassures you that you’re not crazy, most frugal sorts only spend $15 max on a single beauty product.
- Visit the newly opened Ulta and try a couple of products recommended by Penny. Decide they are nice but not perfectly for you. $24, but returnable at the fancy makeup store, so no net cost except my time.
- Order samples of one of those $30-$40 sunscreens from Ebay. Like it better than anything else, but still fail to justify the cost. $5
- Go back to using the very first sunscreen, still not great for my skin, in an annoyed huff. $0
- Be given an amazing $40 sunscreen otherwise languishing in my friend’s medicine cabinet for the promise that I will buy her dinner sometime. Finally move on with my life. $15-$20ish?
My sunscreen search ran about $38, or the cost of the fancy sunscreen that I was trying to avoid buying in the first place. That’s before I factor in the time spent, but this kind of obsessive research is actually fun for me, so let’s file that under entertainment. Is this an example of being penny-wise and pound-foolish? I’d argue no, because I think there are a few things to consider when deciding whether to cheap out or go big on a purchase.
Is the Purchase Recurrent?
My sunscreen was not a one-time purchase. I will need to buy at least two bottles a year, indefinitely. Let’s say I wear the sunscreen I decided on for the next five years. That’s $90 I’ve saved on the cost of sunscreen over those years. It makes sense to try several cheaper alternatives in the case of a recurrent purchase, because the savings add up more rapidly over time.
For items that are infrequent or a one-time purchase, the cost of going a little higher quality is more easily absorbed, since it’s only spent a single time. For instance, when we bought our washer and dryer, we paid a nearly double what the cheapest models cost to get the exact set that we wanted. We did this because of a mixture of reliability (judged by copious reviews), needing a certain size and shape for our laundry room, and a desire for high-efficiency models. Since we hope our washer and dryer will work indefinitely, the cost of that upgrade will (hopefully!) be absorbed over a long period of time.
How Reliable Do You Need the Purchase to Be?
Or, to ask another way, how much of a pain-in-the-butt is it if the item breaks? If I buy a cheap sunscreen and I don’t like it, it’s no big deal. I can just buy a different one at pretty much any store. As long as all the choices actually block the sun, there is not much to lose in trying alternatives.
The case of my washer and dryer was pretty much the opposite. The initial cost of a set is really high. Either unit breaking might require tapping into our emergency fund to replace it, depending on the month, which officially makes it expensive. Moreover, the headache factor for replacing the units is high. Our tiny laundry room makes installation and removal extremely difficult, so it was important to us that we basically never have to do it. A higher price doesn’t always guarantee reliability. In the situations where it seems like it might, though, it’s important to consider what that reliability is worth in increased price.
My General Rule of Thumb
My baseline rule of thumb for trying cheaper alternatives is to be spend one iteration of the price of the expensive, “perfect” model in search of a cheaper alternative, tempered by the two factors above.
With the sunscreen, my initial research said $40 sunscreen might be the best option for me. So, as a baseline, I’d be willing to spend $40 in search of a cheaper alternative. Since the recurrence is high and the pain-in-the-butt factor is low for this item, I might fudge that number up a little if I wanted to keep looking or still felt dissatisfied.
My research on the washer/dryer pegged a $1200 pair as our best bet in terms of the features and seeming reliability that we wanted. The cheapest new sets, ignoring features and reliability, ran around $600 for the pair. From a pure money perspective, that’s not so bad. I’d only need the $600 set to run a little over half as long for it to be a better deal in pure dollars.
However, the (hopeful!) lack of purchase recurrence, paired with the huge pain-in-the-butt factor if I needed to suddenly replace the units, drove the price I was willing to pay for a cheaper alternative lower. (There were also substantial environmental costs to treating the units as disposable and choosing non-high efficiency models.) I settled on the $300-$400 range as my price point for a cheaper set, a true steal, to offset the cost in annoyance if we got duds and lack of features. When we couldn’t find anything at that price, we splurged on our fancy $1200 set.
How do you decide when to cheap out on a purchase versus go big? Do you have mental models you use to help?