Does Buying Pre-owned Really Save You Money
December 25, 2011
When thinking of pre-owned products, vehicles often come to mind. They are some of the most marketed products in society. We see television commercials to newspaper ads talking about the greatest used car prices around. While we have all seen these ads, cars aren’t the only pre-owned purchases we make. Below we are going to take a look at three different items that we use daily, which we could potentially save money on if we purchased them pre-owned.
Housing:
If you are looking at buying a home, essentially any home will be new to you, but we are going to dissect in regards to the build year.
In 2009, an average American house consisted of 2,700 square feet with and average mortgage of $200,000. With approximately 125 million homes in the U.S., about 1% consist of new home builds according to Bankrate. That being said, approximately 99% of houses in the U.S. are “pre-owned.”
With $200,000 being the average price for a 2,700sq ft home, let’s look at the costs associated with a new home build with the same square footage.
In the same year, the average price per sq. ft to build was about $90. Multiply that by 2,700 sq. ft, a home is already at $243,000. Now this doesn’t take into consideration the cost of the land, which can often be expensive in its own right.
Needless to say, if you aren’t hell-bent on a new home, you can save a substantial amount of money for a “pre-owned” house. Decision goes to “pre-owned.”
Electronics:
With technology emerging at the rate it is today, once you buy a shiny instrument and get it out of the store, it often becomes obsolete. The quality may still be amazing, but the technology is yesterday’s news. This is often true with computers and tvs, which are often highly marked up. Deals can often arise from this. With many people needing to make room for the newest and best products, they often liquidate their slightly used ones.
If you aren’t one to fret over a minor ding or scrape, you may find solace in acquiring a perfectly functioning electronic device. Decision goes to “pre-owned.”
Textbooks:
This one is for all of our college students, and those who have college students. Text books, much like electronics, become obsolete rather quickly. A book in physics may present a 3 year old theory, only to have that theory disproved a year later, meaning new books will need to be created to reflect the findings. And as you may know, textbooks aren’t cheap, especially new ones. By purchasing a used book, or even 2011’s more popular option of renting books, you can find yourself saving boat loads of cash. Decision goes to “pre=owned.”
You have two or more options with almost every purchase in your life. Buy new, or find quality used goods. Granted this doesn’t work for everyone, or every product; like diapers, but can provide you with comfort all around.
The Pros and Cons of Renting Vs. Buying
October 21, 2011
Renting Vs. Buying
The debate over whether it is best to rent or buy a property has been on-going for decades. Everyone has an opinion, but no one can give a definitive answer as to which is best. Each option has its own pros and cons.
Renting
Pros
No Maintenance
When you own a home, you are responsible for all the upkeep. When you rent, however, you don’t have to worry about things breaking down or the roof leaking. If something goes wrong, you call the landlord.
Mobility
It is easy to get up and move when you rent a property, while Homeowners have to worry about selling their house.
Less Out-of-Pocket Cost
Rental prices, especially for apartments, are often much less than a house payment. Renting can save you thousands or even tens of thousands of dollars!
Cons
Forget About Remodeling or Decorating
Generally speaking, renters aren’t allowed to even paint their units, much less make more extensive changes. You can forget about changing the carpets, putting in new ceiling fans or even changing the blinds.
Someone Else’s Mortgage
If you are renting, you are paying someone else’s mortgage and property taxes. He or she owns the property and can sell it at any time. You are essentially financing their investment.
Buying
Pros
The Mortgage Interest Deduction
Every penny of interest you pay on your mortgage is tax-deductible. This can amount to thousands of dollars of savings, especially in the early years of a loan.
It’s an Investment
When you buy a house, it is yours. You are free to sell it or rent it, as you see fit. Once you pay off the loan, you will never have to make a house payment again. All you will have to worry about is paying property taxes and insurance.
Modifications
You can do anything you want to a property that you own. You can add on rooms, paint, redecorate, remodel the kitchen, or anything else you so desire.
Cons
Maintenance
As the homeowner, you will be responsible for all maintenance. When the plumbing breaks at three in the morning, you are the one who will have to foot the bill. You will have to pay for HVAC work, roof repairs, and a thousand other things that all add up.
Lack of Mobility
You can’t just up and go when you are a homeowner. If you decide you want to move to another city or state, you will have to either sell or rent your house. This can take months.
Market Uncertainty
Eventually, you will probably want to sell your home. It may be worth more or less than it was when you paid for it, but if you don’t have enough equity to cover commissions and closing costs in addition to the principal, you will have to cover the difference out of pocket.
Renting and buying each has its own merits. The one that is best for you will depend on your lifestyle and personal circumstances. Think long and hard before making a commitment!
The Costs of a New Addition to the Family
September 30, 2011
A New Addition to the Family
It is always a joy when a new addition to the family comes home, but new children can be very expensive. Babies are adorable, but they can cost a lot of money. You may think that all they need is food, diapers and clothing, but those are some serious expenses. Soon to be parents must also take into consideration time off of work for doctor’s appointments and then maternity leave.
New additions to the family are joyous occasions that many couples would like to experience. It is recommended that before they take this large step, they evaluate their financial means to make sure that they can provide for the baby and themselves.
Costs of a Having a New Child
As a parent, it costs thousands of dollars a year to raise a baby. Those costs include food, clothing, health care and childcare. Parents must take into consideration all the expenditures of having a new child. Finance is always a touchy subject, but one that needs to be addressed when it comes to children. Every parent wants the best for their baby.
Example of Expenditures
Children need to drink milk to help their bones grow. Breastfeeding moms will save money, but those that do not will have to purchase alternative milk. Babies need new clothes and because they grow so fast, they will need them often. Health care involves regular vaccinations and frequent doctor’s appointments. Some parents go back to work, which means that they will require child care until the child is ready for school.
How To Reduce Expenditures
Making your own baby food is one way to save on food costs. Blending a few fruits and vegetables and storing them in containers can save money because baby food jars are expensive. Making your own baby food is healthy, affordable and very easy.
Another way to save money is to buy baby clothes and equipment through yard sales or used item stores. Babies grow very fast so it would be wise to buy them very affordable items; however, when it comes to safety, purchase new strollers and car seats.
Budget
Creating a budget is a great way to manage the costs of a new child. Babies require a lot of hard work and money. There is nothing wrong with trying to cut costs because your whole family will benefit from it in the end.
Teach your kids how to dunk! – Geico
Autumn Home Improvements to Help Reduce Winter Costs
September 12, 2011
Autumn Home Improvements to Help Reduce Winter Costs
When the kids start back to school, it’s the ideal time to start some annual autumn maintenance around the home, both inside and out. A little preventive maintenance can go a long way when the utility bills start to skyrocket.
Places to check on the inside:
•Caulking and seals around windows and doors. Use a flat screwdriver or putty knife to loosen debris and old caulking before applying new caulking/seals.
•Inspect storm windows and doors for repairs necessary so that when they are installed, they do their job of keeping out the cold.
•Gable fans should be covered to avoid the heat loss that is ideal in the summer but not in the winter.
•Doors that lead to the garage or mudroom should be checked for proper fit, and weatherstripping should be installed if necessary. Considerable heat can be lost when a door is not properly fit into the frame.
•Attic insulation should be installed if it is not already. Be sure to install insulation with the vapor barrier facing down to avoid moisture problems.
•Since the furnace has been idle for months, check the filters and make sure all the components are in good working order to ensure maximum efficiency. Most utility companies will inspect furnaces and/or heaters for proper function and there is usually no charge for this service.
•Chimneys should be checked and cleaned to ensure adequate ventilation and efficient operation of the fireplace or stove.
Places to check on the outside:
•Window air conditioning units should be removed, cleaned and stored. If they are left in the window all winter, the area around the unit should be completely sealed to eliminate heat loss. In addition, a weatherproof cover should be installed on the outside and a shield on the inside to prevent heat loss during the winter months.
•Exterior caulking around the windows and doors should be checked to eliminate cold air drafts. Old caulking can be poked with a screwdriver to remove loose bits and debris, then new caulking applied.
•Installing a hot water heater blanket can help lower utility bills during the winter. A tankless hot water heater can be one of the most energy-saving devices available if it fits into the budget; autumn is a good time to purchase these as they are on clearance at many stores.
•Wrapping exposed water pipes will help avoid burst pipes and can lower energy bills.
A few precautionary measures will keep a home snug and warm during the winter months as well as lowering the utility bill as much as possible.
What to Check with a Foreclosed Property
August 22, 2011
Thinking about buying a foreclosed property? If you’ve been able to find one at the right price in a location that you like the price tag may seem too good to be true. Before you decide to buy, make sure to take a couple of precautions.
First you’ll want a building inspector to make sure that the home is safe. Electrical and plumbing systems should be up to date or not require entire overhauls to be considered safe. The viability of the structure going forward should also be a major consideration. If there appears to be cracks or any other issues with the foundation of the home you’ll probably want to stay away. Remember, replacing a window is a lot cheaper than repairing a foundation problem. It’s also a good idea to ask an appraiser to look at the property. Be sure to ask the appraiser not just how much the current home is worth, but how much it could potentially be worth if certain improvements are made.
Asking a couple of experts about a property before committing to it is always a good idea. Spending a couple hundred dollars once could end up netting you tens of thousands of dollars in equity in the future.
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