We all have to spend on various things. The current consumerist society tells us to buy products and to do it in abundance in order to have a convenient and comfortable life. But after all that we went through during the recession, that does not hold ground anymore. We need to practice smarter spending choices because we know that any financial benefit that we are experiencing today can quickly disappear in the future. You need to eliminate any bad spending habits that you got used to and start wising up when it comes to where you put your limited resources.
How to be smart when buying things that depreciate
When it comes to buying things and being smart about it, financial advisers will tell you to invest mostly on things that will appreciate. This includes homes, antiques, jewelry and other products that will increase value over time. That way, if you decide to sell them, you can profit from it.
But what about things that depreciate over time? There some things that we need to help us live a more comfortable life and yet they lose value in time. These include cars, electronic items, computers, mobile devices/gadgets and others. How can you maximize buying for these things?
We all need these things and despite their depreciation rate, they are unfortunately still expensive to purchase. So how can you be smart about buying them?
Never buy them using credit. It is never a good idea to buy things that depreciate in value over time by using credit. Not only will you end up paying more because of the interest rate, the money you lose will be greater when you factor in the depreciating value of the product.
It pays to wait for a purchase. Since it is more advisable to buy it in cash, you may have to wait before making the purchase. And since the product you intend to buy depreciates, you may be able to buy them at an even lower price than when you first saw them. That will bode really well for you.
How often will you use them? If you will use them all the time, it is wiser to buy your own. If not, it may be more economical if you lease it only when you need them. Make sure that you do the math to be certain which will give you more savings.
Determine the price that you should spend on it. Even if you are qualified to buy a really expensive car, you may want to hold back and buy only what you need. For instance, you could afford to buy a sports car but that can eat up a lot of gas. Consider the gas consumption and if it will really serve your purpose well.
It is very easy to overspend on products that are inexpensive but you have to realize that it will be more of a disadvantage if they also depreciate. So be very careful in your choices and ensure that it will benefit your short term and long term financial goals.
Smart spending is not about deprivation
In the end, you have to understand that smart spending is really not just about depriving yourself of things. It is more of finding where your money will be used with the most value. Our natural buying instincts may have to go through a lot of changes but with a little effort, you can implement these and practice proper financial habits. It pays to get the proper education when it comes to your spending. Even the government promotes financial education and you can visit MyMoney.gov to find valuable information that will help you maximize your limited resources.
If you really have to buy things that depreciate in value, consider buying pre-owned ones. Here are a couple of suggestions.
When buying cars… If you are on a budget, buying a secondhand car works really well for a lot of people. This is a great first car for most young individuals. Just make sure you bring along a trusted mechanic that will help you view the car and make sure it is right for the money that you are paying for it.
When buying furniture… The best time to buy is during the summer – when graduates are usually getting rid of the furniture they used in college.
When buying toys and video games… Kids get tired of their things easily and that means you should consider buying video games and toys second hand. Shop on Amazon or Ebay for selections.
When buying baby clothes and maternity outfits… You don’t use your maternity clothes always and buying second hand should be very economical. Thrift shops have great and clean clothes that you can use. For baby clothes, you may want to ask family and friends who have toddlers and ask if they are willing to give you baby clothes. Babies grow really fast and it is not economical to make them use new clothes all the time.
When buying entertainment things… DVDs, CDs, books and other materials that you can use to pass the time may be better rented instead of bought actually. Unless you want to collect them as classics, you should just borrow. You rarely watch a movie or read a book twice anyway – unless you really love it.
These are only a few of the things that you can buy secondhand. Remember that even if you can afford to buy something, being wise about your spending means knowing when to choose saving over spending. In the long run, you may find better uses for your money if you put it aside instead of spending it.