The Little Known Implications of Cost Cutting

cost-cutting

We tend to have this tendency to assume that lowest cost products are necessarily in our best interests. While this may be true most of the time, on many occasions the lowest priced products end up costing us more in the long run.

Let’s look at four distinct areas of everyday life where we most frequently assume cost cutting is always a good thing.

Motor Vehicles: The cheapest cars are not necessarily the most economical in the long run. Determining the true cost of owning a vehicle encompasses working out the cost of operation which would include such things as rego, insurance, fuel, maintenance, tyres and repairs; and depreciation, which is the overall decline in the vehicle’s value.

Clothing: Most of us would be amazed if we were to add up the cost of all such clothes in our wardrobes that we never even wear, but only ended up purchasing because they were on sale at the time. This is a classical example of how being attracted to low priced items isn’t always beneficial.

Data and Electronic Appliances: There is no other aspect of shopping where the old age ‘you get what you pay for’ applies more aptly than data and electornic appliances. Washing machines, refrigerators, watches, musical equipment, and mobile phones are all items that don’t necessarily have a very long lifespan. They are often superseded by newer technology over time and can be costly to repair if damaged. It is often cheaper to purchase a new item than to fix an old one. The cheaper the item in the first place, often, the shorter its lifespan.  Similarly, we often we find ourselves subscribing to low cost telephone plans only to end up realising that on a monthly basis we seem to be exceeding our allocated calls and data download limitations.

Home Loans: It is far from necessary that the best home loan product is the one with the lowest interest rate. These days you can find third party lenders that can offer you a home loan deal with a much lower interest rate than the standard norm, but in addition to there being other on-going expenses associated with that, the low cost package might not offer you an offset account, redraw facility or split facility.

At SwitchMyLoan.com.au we aren’t just about finding you a home loan deal with the lowest available interest rate in the market, rather we are committed to finding you a home loan deal with a considerably lower interest rate that comes with all the great features you would ordinarily expect to get out of a decent home loan package.


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