Money Mishaps: Buying Brand New
Hi, Money Masters!
Welcome to this week’s installment of Money Mishaps! Now, whether the Leprechauns left you a pot o’ gold last weekend or not, I’d like to discuss the topic of buying certain items brand new. Often, you can save a bundle of cash and still get used items in great condition. All it takes is a bit of savings savvy!
This is the biggest item on my list. Did you know that a new car depreciates the minute it leaves the lot! “Depreciation” means the decrease of the value of an asset. On average, that new car depreciates 19% in the first year (19% of a $30K car = $5,700) and about 14-15% in the second and third years. Also note that the costs for registration and insurance are more for new cars than for gently used ones.
What to do? Do your research and consider used cars. There are many resources available to you:
Use the vehicle information number (VIN) to research past owners, use, and maintenance.
Contact your state or local consumer protection office to learn your rights when buying a used car.
Check prices of similar models with used car guides that you can find online (such as carfax.com) or at your library.
CLOTHES, TOYS/BOOKS, FURNITURE
These items can REALLY break a family’s budget! Even with holiday sales and coupons it is easy to overpay and get way off track with your money. For example, it is not unusual for a retailer to mark up jeans by over 110%! Also, manufacturing companies put products in eye-catching packages and retailers strategically display certain items throughout the store.
What to do? Resist the urge to pay full price! Summer is garage sale season- grab a friend and make a day of checking out a few. You might find some clothes and toys in great condition and pay a fraction of retail costs. It is also a good idea to visit local thrift stores. Looking through the aisles can be lots of fun and easy on your wallet.
Hint: Go early in the week! Thrift stores tend to receive a large bulk of product over the weekends 😉
It can be tempting to buy brand new things and think you are getting a deal, but WHY should you pay $23 for something that costs $2 to produce? Be smart, be savvy, and you WILL stay on track!
Until next week…many blessings to you all!