When Is a Deal a Good Deal?

When is a deal a good deal? Unless something is absolutely free, we are necessarily paying for it, so how do we decide if something is worth buying? Even if something is absolutely free, there may still be costs associated with transporting it, storing it, using it or disposing of it. The costs may be immediate or future. They may be great or small. They may be measured in terms of dollars, time, lost opportunity or something else altogether.

I face the “should I buy this” dilemma every day. I spend a great deal of time researching and networking on-line and I find that I am often presented with spending opportunities. The older I get, the more quickly I have come to realize that usually a bargain is not a bargain if it causes me to buy something that I would not normally buy or that I do not need to buy.

For example, today I read a jazz-themed blog that directed me to a website that is selling a five disc John Coltrane CD set for $11.99. The regular price of the set is $60.00. I actually have a $5 gift card for the site so my cost would have been $6.99 with no shipping costs since I can pick the product up at a local store.

I love jazz, and John Coltrane in particular. At the same time, I know that I already have so much music in my collection that I would listen to the collection a maximum of three or four times over the course of the rest of my life. I also know that I can listen to the songs for free on various legal, music web sites. I just don’t need to pay any money to own the music or to have the necessary rights to make copies for my personal use. The radio and other streaming sites are sufficient for my purposes. As a result, even though the deal on the Coltrane set is a great deal, it would still be a waste of money for me to purchase the set.

By comparison, I received a PM from a local radio station letting me know that it was “giving away” copies of a new Janis Ian 2-disc set. Recipients needed only to pay $3.00 to cover shipping costs and the station would send out the CDs.

I immediately jumped at the chance to get the CDs even though the savings are not nearly as substantial as the savings on the Coltrane set that I passed up. I could buy the Janis Ian set for $13.99 at Amazon (or at least I could when I checked on the price) so I am only saving about $10.00.

I only know two Janis Ian songs (“Society’s Child” and “At Seventeen”). I actually know Coltrane’s body of work much better. The difference between the two deals is that three days before I received the Janis Ian offer, I had looked at “Society’s Child” and “At Seventeen” on iTunes and decided against the $2.60 charge to purchase both songs. I really wanted those songs so when I had the opportunity to acquire those songs plus another 20 or so tracks for only $3.00, I jumped at the chance.

In case you are missing my point, and I know that happens a lot if my family’s reaction to almost anything I say is any indication, we all have to set our own spending priorities. More importantly, our priorities are largely defined by our circumstances at any given moment. If I were younger and unmarried, I would almost certainly have purchased both the Coltrane and Ian sets. If I did not already have a substantial jazz library, the Coltrane deal would have been much better than the Ian deal. If I did not like jazz or folk, neither deal would have been good for me.

Every purchase needs to be made in the context of who we are, what we need and what we want, and no two people will always make the same purchasing decisions. As a result, none of us should really be judging the purchasing decisions that others may make.

How do you make your purchasing decisions? What is important to you? To what purchases do you give more importance than other people might? What purchasing decisions do you see other people make, only to leave you scratching your head wondering why?

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11 Responses to When Is a Deal a Good Deal?

  1. Sahil says:

    I got ur point. This usually happens in day to day life; we like something and then we purchase them and they we dump them in some corner of our apartment and finally after years we realize that it was never my high priority.
    I personally blv that if something is really important and its the utmost necessity, then costs/ bargain or any deal will be sidelined.

  2. It’s a deal if you were going to but it anyway. Not it they put the idea into your head.

    John DeFlumeri Jr

  3. Ann says:

    Timely article! 🙂

    One of my worst problems is when I go on-line to buy various tools and supplies and “deals” pop up. I happen to love tools that do what they’re supposed to and have just recently learned that, unless it’s something I’m really going to use, it’s not worth it at any cost! Also, for things like diamond files, unless they can tell me the grit and how the grit is bonded, a “deal” may be the cheap version and not worth my while. So now, I only order what I’m looking for… unless the deal is for something I know, like and use frequently.

    Grocery and other shopping has to be approached the same way — particularly watching expiration dates! Ten large cans of diced tomatoes, which I tend to use a lot of, are not a deal if they expire in a month.

  4. Len Bevy says:

    Your analysis makes a lot of sense. Most people woudn’t put half the thought into a purchase as you have. But we all need to. I read youngmoney often for different topics and I’m glad I’ve found this site as well. I often tell my kids that they have to decide if its a need or a want. A simpler distinction, but a good one.

  5. persephone says:

    I don’t like any deal that I have to accept or reject immediately. If there is a time pressure on making a decision, I usually assume that it is a bad purchase unless the item is one of a kind or uniquely available.

  6. A good deal is any time you think the price you purchased is cheaper than the intrinsic fair market value.

    Just don’t get hooked on getting good deals, b/c you’ll end up spending too much money and going broke! 🙂

    Hope to see you over at FS.

  7. Princessperky says:

    Teal people never did agree on finances (second to last paragraph). I think it has to do with teal being such a hard color to pin down, no two folk can agree on just how much green needs to be added to the blue…..(or is it blue added to green?)

  8. Good catch, Princess! I am rather fond of teal but I agree that it does not belong in the article.

  9. spicoli says:

    If I want it and it is on sale, it is a good deal. If I don’t already want something and a sale makes me buy it, it might be a good deal.

  10. I'm Just Sayin' says:

    Who is Janis Ian??? 😉

  11. Slinky says:

    If you love it AND you use it, then you should absolutely have it. If only one of those is true, you should consider it carefully. If neither is true, don’t buy it no matter what. Something you have, but don’t use OR love is always a waste of space. In your case, you love both, but it sounds like you’ll listen to the new Janis songs more than the other songs you already know. That means you get more enjoyment per dollar spent. Better deal. 🙂

    I also agree that a lot of what we buy is about who we are. My mother financed the purchase of a motorcycle at 20% interest (bad credit from a messy divorce). While I cringe every time I think of that interest rate….I still can’t say it was a poor decision…not for her. She’s the first to pull her bike out in the spring, and the last person to put it away in the winter. If it’s not raining, she’s riding her bike and she loves every single second of it. And you know what? Last month she got a nice windfall and paid it off….$7k in one fell swoop. Goodbye interest rate, hello better credit score. My mum is a smart cookie, she just doesn’t brag about it.

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