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Frugality

Many consumers are finding that there’s power in numbers. Group buying sites, such as Groupon.com, LivingSocial.com, and BuyWithMe.com, offer steep discounts on local services that are being promoted that day. Local merchants get a burst of new traffic that will hopefully lead to new customers and consumers get great deals. You might have seen recent stories highlighted on CNN, USA Today and other media outlets, heralding them as a the new buying revolution, the Web’s latest retail craze.

But it’s not as simple as you might think to cash in on these deals. Group buying sites vary in their business models. Some require a certain number of takers before validating the deal, while others let you click to buy immediately until all the vouchers are sold. Some sites offer an incentive to share the deal. Others use the threat of losing the deal if enough people don’t sign up. The more you share, the more likely the deal will go through.

Many of these deals come with some fine print. Here are some things to watch for when using group buying sites:

  • Check Out the Deal – Sometimes merchants run different deals on different sites. Don’t settle for the first deal you see. Check out other coupon and group buying sites before committing.
  • Know the Restrictions – Some deals are on valid certain days or for a limited time. Tax and tip may not be included. Most of these deals do not give money back if you change your mind.
  • Read Reviews – A deal is only as good as the product or service sold. Make sure this is something that you’ll want to use, and check out the place using review sites like Yelp, Google Maps, or ConsumerSearch.com.
  • Make Sure that You Can Afford It – Sometimes you can buy deals, such as get $50 worth of food and drink for only $25, but after adding the entrée, dessert and drinks, you might find yourself above that $50 budget. Make sure you know what the typical dinner or service costs before signing up.

Most of these sites offer a “How It Works” section. Read the rules before you start using a group buying site. Because these are local offers, make sure that the site offers deals in your area. If they’re not, you can sign up for the waiting list and when they add your city, you’ll start receiving emails.

These deals change often so you’re encouraged to check back daily or sign up for alerts to see the new deal of the day. As you get more friends involved with your group buying, you start getting peer pressure to buy into their favorite deals. Remember, it’s only a deal if you save money, not spend it. If you weren’t planning to buy that product or service then you’re wasting money on services and products that you don’t need.

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Buying the cheapest thing you can find certainly isn’t always a great idea. It is good to be frugal but quality is equally as important as price. I fell game to the cheaper is better trap the other day when I was in the market for a cornhole set. You know the bean bag game where you toss bags at a wooden board trying to get them in hole. I used to own a set I built myself but they were to big and bulky so I ditched them.

I went out to buy a set and was presented with two choices, one at $79.99 and one at $99.99. The $79 one was built out of wood and the more expensive one was molded plastic. The frugalite in me decided the cheaper one was going to be the better deal so I bought it. This was actually very out of character for me. I typically research everything to death before I make a purchase. This was a spur of the moment deal and I went with the cheaper option on gut.

Turns out there is a reason I over research everything before i make a purchase.  When I make a spur of the moment decision to buy something it is a bad deal. I picked up the cheaper version and was sorry the first time I went to use it. The bags were like paper, too light, and the boards were cheaply made. If I wasn’t sorry the first time, I was crazy sorry the second time when the board actually fell apart. I tried to fix it but  it was the cheapest, most worthless, piece of crap I have ever purchased. I don’t know what I was thinking. I returned it the next day and I plan to build one from scratch.

The point I am trying to make with this lengthy diatribe is that just because it is cheaper doesn’t mean it is better. Especially if you are making a purchase of something you really will use regularly. I didn’t do what I knew I should have done and I bought a lemon. The more expensive option was better but even it wasn’t the best way to go. Looking back at it the best way to do it was to make my own. That way I know it is done right and better. Cheaper isn’t better, but sometimes more expensive isn’t so much better either. Weigh your options accordingly and then make your decision. Not much comes from split second decision making.

Photo: (GoMattOlson)

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This whole iPad thing baffles me. I guess I don’t get the point of the product. You take the iPhone which had some pretty big limitations and you make it bigger. Same limitations just a bigger screen. With the exception of Flash support I see things improving in future iterations of both the iPhone and the iPad which brings me to my thought for today. What does it cost you to be an early adopter?

There are people out there who have to have the latest and greatest tech gadget/gizmo. It never ceases to amaze me how the Apple faithful line up to get at whatever hot thing they have rolling out. Yes, I own an iPhone. I own a 3Gs one though. I didn’t get the first one, or the second one, I waited until it started to get really interesting and personally I kind of regret it. I like what Android has been able to accomplish and the less strict policy on app development. But I digress. When you are an early adopter it costs you more than just what you paid for the product. Lets look at the benefits of waiting to make that next gadget purchase

  1. No matter how good a testing group a company gets together there is always going to be unanticipated glitches, bugs, and security holes. It is impossible to anticipate all of the uses a product will get when put in the hands of the idiot consumer (myself included). These bugs tend to work themselves out in the first couple of months to 1 year of a product being on the market. Holding off a bit can save you the frustration of dealing with those glitches. Let someone else deal with it.
  2. The feature set of a 1st gen product is never what the company really wanted to put out to the market. It is what they were able to get together by the 3rd drop dead date. Other stuff doesn’t get cut it just gets rolled into the next development cycle. Just look at the features of an iPhone 3Gs versus the original iPhone. By picking it up early on you could be missing out on some great advantages that you will have to replace the product to get later on.
  3. The cost of a first generation product is almost always higher than the costs of subsequent generations of the product. As the product matures the company will fine tune the production process and suppliers they use to reduce their costs of creating the product. This process is happening all the time so their profit on the sales of the products grows. When the next generation comes out they can reduce the price or increase the value (increased storage capacity, processing, etc.) at the same price point. Buying early your are paying more for less, most of the time.

I am not trying to say anyone is crazy for getting an iPad, it looks neat, I just don’t see the benefit in being an early adopter of most anything. I am not the only one either, I think. Are you an early adopter? I would love to know why.

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    Is Bulk Better?

    February 22, 2010
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    I have always been leary of the Costco’s and Sam’s Clubs of the world. Something always seems off to me when you have to pay to get in the door and then pay to get the stuff. Same thing with cover charges at a bar. I am here so I am going to be buying […]

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    Frugal Monday Meals – Nachos

    February 15, 2010

    Unlike a lot of households out there I do a lot of the cooking in my family. It isn’t that my wife won’t, or can’t, it is just that I truly enjoy cooking. I have even, briefly, considered culinary school and a change of careers. It is just something I enjoy doing, chopping is somehow […]

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