Friday, July 2

My Frugal Miser's Best Advice I've Received - Go With Your Gut and Selective Procrastination

This advice is something I've learned from listening to mentors like Buffett but not necessarily something I've heard them come out and say.

One of the traits my friends are always surprised by is how quickly I make decisions. I'll never forget when I went into the D.R. Horton design center to choose the customization options for my house. The design consultant told me I was the fastest appointment she ever had. It's not that I didn't care about what color my walls were or the design of my cabinet handles. It's just that I learned to go with my gut.

95% of the time, when you go with the first decision that comes to mind, you'll be making the best decision. I've spent too much time - agonizing time, mind you - watching acquaintances, business associates and family fill out spreadsheets, seek expert advice, etc. to make a decision about something.

The question I ask myself when making a decision is "What's the worst that will happen if this decision isn't the best one?" Often, the consequences are minimal. If I have to choose between six neutral paint colors for the walls in my house, why spend half an hour debating the merits of one versus the other - that's 30 minutes of my life I don't get back. Instead, my gut tells me what to pick. Go with it and don't look back.

Now, there is a time and place for procrastination. This is especially true with large purchases where I need to do something but don't have to rush. In this case, I want to get a great deal and I want to buy a quality product. For example, one of my rental properties has a dishwasher with a very small leak. The door gasket is bad. First, I found out how much it would cost to simply replace the gasket. Since the dishwasher is several years old, I had to consider how long it would last if all I did was replace the gasket. And, since the tenant is okay with it in its current condition, I can take my time. Instead of running to Lowe's and buying a replacement, I first found out how much it would cost to replace the gasket. Then, once I decided it was not worth replacing just that part, I decided to start looking at replacements. I have a base price for what it will cost, but now I can take my time to find a better deal, whether it be a cheaper dishwasher, a special discount on delivery, or an energy-efficient rebate.

In the case of the dishwasher, I am deferring a purchase where the cost of deferral is zero - the existing unit isn't damaging my property and isn't causing too much pain to my tenant. But in the case where there is a cost to procrastinating - wasted time, effort or risk of higher costs - I will go with my gut and do what comes to me first.

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