With the Christmas season upon us, our tree is up with lights shining bright, gently illuminating over my shoulder as I compose this post. It is the Christmas season and for many the Christmas tree is a part of the annual tradition. While much can be said concerning the season and its components, with this being a website that addresses finances, I’d like to think further about the Christmas tree.
One wiser dollar strategy that applies to any moderate to high priced item is to consider the long-term cost and benefits of a particular purchase. With it being the Christmas season, let’s consider this using the Christmas tree as an example.
People have different preferences concerning trees. Some prefer short trees, other tall ones. Some prefer spruce, others pine and still others fir. But perhaps the most significant difference pertains to whether one chooses an artificial tree or a live tree.
You may have preferences for a live tree. You may love the seasonal smell of the tree and like the thought of a live tree in the living room. However, I ask that you consider the cost along with the benefits.
|Live Tree||Artificial Tree|
|Initial Cost||$50 (estimate)||$75 (estimate, if purchased at half price near or after Christmas)|
|Needles||Sheds needles||A few needles will need to be vacuumed when assembling and disassembling, but none otherwise.|
|Longevity||A few weeks||Potentially 20 years or more|
|Aesthetics||Some may prefer live tree||Some prefer artificial|
If the primary concern is short-term cost, one may say the live tree is the way to go. Especially if an artificial tree isn’t on sale. But, like a lot of purchases, I ask that we apply some long-term financial planning here. We have had an artificial tree for 17 years. This year is the first time I had to shore up the base by installing a few sheet metal screws. I expect the tree to last at least 20 years. If you purchase an artificial tree, near or after Christmas, you can probably find a nice one for half price. So if the cost is $75, that works out the cost to be $75 for 20 years of tree use.
Now if you purchase a live tree each year, then an estimated cost is $50 per year, over 20 years. So that works out to $1,000! I am not even considering the cost for travel to get a tree 20 times, nor the impact of inflation, which would add even more to the cost!
Buying and setting up a live Christmas tree may be a precious family tradition you want to maintain. That is great, if you determine the benefits outweigh the cost. But for us, a way to save at least $925 is the way to go!
While we are talking about trees as an example, this wiser dollar strategy applies to a lot of purchases. For instance, when we purchased our home, we applied long-term financial planning by considering the location. Our home is one mile from my office. With it being so close I often go home for lunch. On any given day, I can drive to work, return home and eat lunch, go back to work in the afternoon and then return home again that evening and only drive four miles. This is a small matter, but when I consider how much more it would cost to drive eight or ten miles one way to work and eight or ten miles home again, along with eating out more frequently because of the distance required to return home, then my average meal cost would increase and my annual fuel cost would increase exponentially. Such a close distance between home and work might not be a viable option in your city and with your work, but my point is simply this, consider long-term costs and weigh the benefits, along with the costs. When buying a car, signing up for a cell phone plan or even when purchasing a Christmas tree, ask the question, what are the costs long-term? Long-term financial planning does apply to the purchase of a Christmas tree!
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photo credit: Charles Hackley, Christmas Tree via Flicker cc License – 11/30/16 with no changes