The Art of Doing Things Right, Without Paying Too Much!

My mother was a child of the Great Depression. She had been the oldest of 9 children and had to leave school at a young age to help put food on the table. As a result, she took the value of a dollar bill to heart and never forgot the lessons that she had learned from her experiences. As my siblings and I were growing up, she did her best to pass these lessons on to her children.

So, I guess that it's not unusual that at least some of these lessons stuck. To the point where, over the years, quite a few people have called me, "Cheap".

Which is a term that I don't accept as being totally accurate because while I don't like to pay too much for an item (who does???), I do accept that sometimes paying more for a particular good is actually the wiser investment.

Well, this morning, I happened across a video that one of my connections here on Linked In, Keith Duncan, posted on "Saving Money" and his post inspired me to expand on his idea of saving money by discussing the difference between something's cost and it's true value. Or in my terms, the difference between being "Cheap" and being "Frugal".

In his video, Keith tells the story of being stranded on the side of the road after suffering a blow out on some cheap tires that he had bought. He then uses his unfortunate mishap to illustrate that he probably would have been better off to have paid more for a better set of tires that wouldn't have left him stranded.

He actually mentions the old adage that, "You get what you pay for" and while this is oftentimes the case, it doesn't mean that you won't pay too much for what you get! And here is an example of what I'm talking about.

A few months ago I had my truck in the shop to have the oil changed and the tires rotated. As that shop normally does, they gave my car a once over and told me that I had a tie rod end that was going bad.

Now, I'll fess up, I don't use this shop for repairs. They are a national chain and while they are great on tires, alignments, and oil changes, they are kind of known for overcharging for repairs. So, I wasn't surprised when their rep quoted me a huge amount for the repair and I told him, "thanks, but no thanks".

I then took the truck to "My Guy" (Chris Steg 252-933-0051) and he confirmed that the tie rod end was indeed nearing the end of it's life and that he would recommend replacing all of the various bushings, tie-rod ends, etc that make up the front end of the vehicle. He worked the numbers up and was willing to rebuild the front end of my truck for a couple of hundred dollars more than the chain wanted to charge me for repairing just the one tie-rod end!

So, while I actually ended up spending more money to have my truck repaired, I think that, in the long run, as Keith had concluded after having been stranded, I was being more frugal by spending the extra money. That by rebuilding ALL of the front end, that I was lessening my chances of getting stranded and that by utilizing my lower cost provider, I was able to not pay too much for the repair. In essence, I was Doing Things Right Without Paying Too Much.

Now, there are some out there who would point out that the chain offers some additional value that "My Guy" can't, such as a nationwide warranty on their repairs, and having the capacity to still get my job done if the mechanic working on my car happened to catch a flu bug or something. And those are legitimate points that I would need to take into account before making my decision.

In the case of my truck, I seldom drive it outside of the Raleigh area and if it takes Chris a few extra days to get my front end rebuilt (which it did, btw), I have another car available for my use. So, the chain's "Value Added" proposition didn't really work for me.

Another Example From Linked In

After, reading Keith's post, I stumbled across another post that kind of went into the same subject matter.

In this second case, the post by another one of my connections, Anna Terry, addressed the question of, "How Much Your Home Remodel Will Pay You Back".

Anna's post, which was based upon the 2018 Remodeling Cost Vs Value Survey (which I participated in for years btw) lists a number of different remodelling projects and how much your investment would increase the value of your property.

As it turns out, as the survey calculates, most times you don't get 100% of your investment in a home improvement back when you go to sell your home and many times it's only a small percentage of what you spend that you will realize when you sell your home!

So, why do the remodel if you're not going to get your money back?

Well, the first answer to this question is because you will enjoy the improvements! You will receive, what in economics terms, is referred to as, "Utility" from the improvement.

The second reason is that the cost of the improvements listed above were based upon the full retail cost of the renovations and as pointed out in my truck story above, that "full retail cost" can vary depending upon who is doing the work.

As an example, as some of you may know, I am currently building an addition onto my home that will house an in-laws quarters. As part of the project, I got bids to put in a new HVAC system for the entire home.

The first bid that I got came in a slightly under $16,000. Which, to be honest, insulted my sense of frugality (or my being Cheap, as the case may be). So, I called another company who sent their guy out and who came in right at $13,000.00 (for an equivalent system, from an equivalent contractor). So, right off the bat, I was $3,000 to the good for having shopped around.

Having had my little brother's heating and cooling shop that operated out of my real estate office back in the day (and still having access to my little brother), I still wasn't happy with this bid either and instead choose to hire my own technicians and to do the job myself. I ended up paying a bit over $8,000 for what is actually a nicer system.

Now, that's not to say that everybody has the same experience, resources, and skill sets that I had available to me, but it does go to show that there are different ways to skin a cat and that if you watch your p's and q's that you can actually improve your selling position by doing a remodelling project. As long as you are smart about it!

If nothing else, there are lots of home improvements that you can make that will actually make you money when you go to sell.

Paint, for example, is cheap! And while you can still pay too much to have your home painted, it is thoroughly doable to get your house painted and to get a "dollar and a dime" back for every dollar that you spend! This is especially true if you have the skill set and the time to do your own painting!

Landscaping and trimming can also offer a lot of bang for the buck! A couple of hundred dollars and a weekend or two can add thousands of dollars to the value of your home.

For example, I once had a listing where the sellers had two big dogs who they had tethered in the front yard and as a result, the dogs had trampled down the grass to the point where it was simply dirt. The dirt had also splattered up on to the dog house, as well as the home itself. In short, it looked like hell!

I suggested that we move the dog run to the back yard and that the sellers put down some sod in the bare spots and to power wash where the mud had splattered up onto the home. The total cost was less than $100.00, but it completely transformed the curb appeal of this home!

Trimming bushes is something else that people can do that doesn't cost much, but that can completely change the appearance of a home.

Cleaning up and brightening up doesn't have to cost a bunch. My sister in law is currently getting ready to put her home on the market (she already has her agent) and she has a nicely oversized garage that should be a selling point, but because of the poor lighting in the space, it looks dark and dingy.

She hasn't done the work yet, but I have suggested to her that she, clean up the corners, paint the walls, ceiling, and floor, as well as that she upgrade the lighting situation by adding 3 or 4 fluorescent light fixtures. Total cost if she does the work herself would be less than $500.00, probably a grand if she paid to have it done. But, by doing the improvement, she will be turning what is now a negative into a selling point! My gut is that the improvements will not only help to sell the home quicker, that she will also realize a return on her investment.

So, while I do agree with the basic premise that most upgrades will cost you more than they would increase the value of your property, it doesn't always have to be this way. By being careful on the projects that you choose and by shopping around (for both labor and materials), I think that you can usually at least break even on the cost of an improvement, if not make your "dollar and a dime" on the cost.

* Intersection of money and savings street courtesy of Pixabay.com under creative commons license.

** Hellboy on the beach courtesy of Bob Mitchell, some rights reserved

*** 2018 Cost versus value report courtesy of CNBC under fair use doctrine

**** HVAC system courtesy of Wikimediacommons.com under creative commons license

***** Hedge Trimming before and after courtesy of Evergreenlawncaregville.com with permission

****** Garage with new lighting before and after courtesy of lightsbyhh.com with permission

As always, the opinions expressed in this article are those of Bob Mitchell alone and do not necessarily represent the opinions of Resource Financial or any other entity. All photos published under creative commons license with attribution when requested.

R. B. "Bob" Mitchell

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Cell: 314-503-6657