Ray’s Take: Too often as individuals consider ways to improve their financial situation they first look at the income side of the ledger; how to earn more money or increase their investment return. More often than not, we have much more control over the expense side of the ledger. You can save a lot of money buying some things used rather than new. However, you can also waste money that way, too. Doing your homework and knowing the worth of what you’re buying can make all the difference.
The biggest single savings comes from buying a used car. A new car loses 20 percent of its value as soon as it leaves the lot, and typically another 10 per cent that first year. Since auto manufacturers no longer redesign their cars each year, your friends might not even know the difference.
A few other things it makes sense to buy used are books, especially textbooks; sports and exercise equipment; a wide range of tools; silverware, dishes, and stemware; and young children’s clothes, which are so quickly outgrown; and furniture.
When you buy used, you might spend more time shopping around. Only you can determine if the savings is worth that effort; or, if savings matter more than pride in a new possession. It’s always a trade off.
That said, there are some things you should probably never buy used: personal items like mattresses, makeup, or shoes; laptop computers and tablets that could have been dropped, spilled on, or otherwise abused; and used software, which usually has limits to the times it can be used.
I’ll take things a step further – why buy at all? There are libraries for books, music and other rentals – most of them at no charge whatsoever. Moving is always sobering when you have to deal with all your stuff, much of which has never been used. Think about that before you add to the stack.
New, used, free or skipped – make careful choices for your wallet, your safety and your health.
Dana’s Take: We sometimes forget that fixing what we already have is an alternative to either buying new or used. Revolutions Memphis, a community bike shop in Cooper-Young, is changing that.
The Revolutions Memphis workshop in the basement of First Congregational Church rehabilitates and recycles donated bicycles and gives them to kids and adults who need them. Their Earn-A-Bike program allows a volunteer who has rehabilitated a bike for someone in need to then fix up another bike – and keep it.
I took my son there to volunteer and learn about fixing bikes. Once he got his hands dirty cleaning a bike chain, he was all smiles.
The vintage-friendly lifestyle of Cooper-Young was a refreshing change from the big-box consumer mentality of East Memphis. Who knew that “used” could be so cool?
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at email@example.com.