Wednesday, February 20, 2008

Five Things to Buy New and Five Things to Buy Used

In our quest for consumption, we can readily come up with a healthy list of things, given the cash flow, we could run out and buy right now. Let's imagine for a moment that’s possible. What would you buy? If you’re like us, that list spills over into electronics, home theater and sporting goods. When going through the process of shopping, some will simply see things they want and make impulsive purchases. I had this happen to me not even a week ago with a lob wedge that I had an eye on. I can barely call myself a hack so purchasing a $50 golf club was already a little out there. On top of that, it was on sale for $30! I had to go through the agony of making some perfect text book practice swings in the store, imagine it in my bag, visualize myself making a few beautiful pitches on to the imaginary greens, then put the club back on the shelf and walk away. Let me tell you, it’s a man's equivalent to giving birth. Maybe not, but still pretty difficult.

Impulsive purchases are probably single handily the cause of Americas credit card debt problems. Remember the
two-week rule we mentioned in an earlier post? For those items that you know you will enjoy and get your money’s worth, perhaps your decision of purchasing will ease if you find the product used and cheaper. We have recommended five items that you may be better off buying used and five where buying used is not worth it. Now, let's take a look at what is best used and new.



USED

1. Golf clubs. You saw that coming didn't you? There are people out there that have their entire business built around reselling used golf clubs. A woman I work with was somewhat
apprehensive about buying a used club, but ended up going to a manufactures' outlet site and got one that was "like new" and it was in pristine condition. This is an example of investigative research to save some pretty big bucks. Clubs are a lot like cars in that if you wait for the latest club to come out, the one before it get substantially reduced in price. Ebay is not a bad way to go about this. Just buy steel irons and be sure the drivers and woods show a picture.

2. Computer Monitors. I have a sick obsessive fascination with having as much desktop real estate as possible. If I could justify the cost, I would use two 30" monitors at every machine I have. Obviously, that’s an obscene amount of monitor, but still, it doesn't hurt to look! (Looking is free.) To have reasonable success with buying larger monitors, I go to the Dell Outlet page to find good deals on monitors of a larger persuasion. Don't be afraid of buying a monitor that has been refurbished! These monitors undergo an extensive quality check before they go out and the risk of getting a bad monitor is extremely low. The worst you can expect might be a bit of slight marring on the bezel, or frame. To me that's fine, if I can save $150-200 dollars. The technology these days for LCD is so run of the mill that consistency is near 100%. This outlet list changes often so check back regularly.

3. Books & DVDs. To be completely honest, a large part of my entertainment budge
t goes towards books. A few DVDs here and there, but not many due to Redbox and Blockbuster Online. However, for my book indulgence, I do a sneaky thing. I go to the big fun bookstores (Barnes and Noble, Books-a-Million, Borders, etc) and I buy absolutely nothing. Again, like the golf clubs in the sporting goods store (see above), this is extremely difficult to not give in to the instantaneous feeling of satisfaction. What I do is write down the ISBN number and go look on Amazon for it. I do this for two reasons: 1) I will get the same book, in nearly the same condition, which will be close to 50% off what it was in the store; and 2) It allows me to have a buffer of time to be sure that the book I am seeking is something I truly want/need. Waiting to purchase lends time to take in to account reader reviews and it's amazing these brick and mortars are staying in business.

4. Vehicles. This is somewhat a no-brainer for anyone with a sliver of frugality within them.
It’s a widely known fact that a brand new car depreciates at least 3-5% as soon as you drive it off the lot. Then it loses 15-20% of its value every year after that. It’s not uncommon for people now to owe more on their car than it’s worth, don’t be one these. While some say that a car is an asset, it is also a depreciating asset. In fact, it is the only “asset” people willingly borrow money, at interest, while knowing it will depreciate. Get a vehicle that’s 2-3 years old and let someone else take that hit, just make sure that the car was well cared for. That new car scent can be bought easily. Taking care of your car will save you tons over the long run either way. Buying new does absolutely nothing but throw good money out the window at about $12 a day, in addition to gas, maintenance, etc, etc.

5. Wall Art. Hopefully you don't think we are suggesting that you are like the Amish, so by all means decorate! There is quite a bit of decent paintings, photographs that you can find out there at decent prices. I feel good about buying these used as there is only so much you can really purchase before your walls are full and your need goes down. Kept within your budget and at the right places, this can even be a rewarding hobby. Check The Wall Art Store or All Posters.

NEW


1. HD TV's. This is an interesting category as it could be easily argued either way. Some will say that it's just like computer monitors and the technology is so stable these days that you can’t go wrong. I disagree somewhat in that TV's have a great deal more going on under the plastic skin. You wouldn't think of it, but they actually have some pretty advanced chips in them that lend themselves to widening the spectrum of quality across the field. A higher quality, name brand, HD TV is going to look noticeably better than a lower end one. Without getting into a long post about the pros and cons of certain sets, there is still the argument that TV's are getting cheaper almost by the day. Find a TV you like at Best Buy, note the model number and then go home and look online for it. These prices will have dropped significantly online, then in one-month see if they have come down again at Best Buy. Again, Amazon has nice selection as does Costco. (Let us know if you find that 60" Vizio for less than $2k!)

2. Computers. I am a bit of a stickler for computers but I also do quite a bit of tweaking and know my way around pretty well. Having said that, there are two avenues to explore:
DIY - Go to Pricewatch.com and get your parts. They do a really good job of giving you the power to select the parts you want in the price range that works best for you. You can also see price trends for more expensive items and see where the gouging drops off. NewEgg.com also has some pretty good deals for more everyday items.

Buy Whole - Of all the computer manufacturers out there, it is not easy to simply recommend one and have that answer all the needs of the average consumer. If you need just an eMachine, go to WalMart and be astounded by the savings. For an overall positive experience and a decent warranty, buy a Dell. You can snag some great deals from their Outlet Store, but new machines are a good buy as well.

3. Clothes & shoes. Just spend wisely here. Not many would buy used clothes and shoes given the choice. You don't have to buy everything from the most expensive trendiest store, outlet department stores should be ok no matter your dress code. I have to wear a shirt and tie to work everyday (excluding casual Fridays) and I rarely pay more than $10/shirt and $10/tie. I’m serious, I’m not wearing the worst of the worst either. Occasionally, check out the back of stores where the clearance sections are, you will be surprised. If you feel differently about this, please leave a comment and let us know.

4. Cell phones. Used cell phones are sold for three reasons: they don't work, they are awful quality, or they are stolen. Do the research to see what you like best and stick with it. Get a modest plan, and take advantage of a renewal deal. Verizon has a Two Year Renew plan and it’s pretty nice (however, for the consumers sake we would like to see these contracts be reduced to at least 1 year). I usually make a point of not looking at other phones for the 1st year, and then as the second year starts up, I begin looking around for what is nice. Just don't go over the top with features and be wary of rebates!!

5. Furniture. Much like clothes, you can't really feel good about buying a couch that someone has obviously made a large part of their life on (including their children). It's too difficult to bring it back to "like new" and the fabric will eventually go back to its engrained smell. Not to mention lots of furniture made these days is not of solid wood, but of particleboard, that doesn’t have the lifespan of wood. Spend the time to do research and know your budget limits. Set aside a certain amount of money to work with and stick to it. Don't feel like you need to furnish your entire house at once and PLEASE don't get suckered into a store credit card. Unless you can pay it off and keep it off, it will hit your credit report to continually opening new lines of credit. Buy a decent bed first and go slowly from there. The furniture will have more meaning to you and will last longer because of it. The only used furniture I could feel good about recommending would be hard wood antiques. Even then, I would need to do a great deal of research to justify it. Exception to all of this is college, beer taste just as good on a used couch.

Have other suggestions about what is best bought Used or New? Drop us a
line or leave a comment! $

2 comments:

The Dream said...

Amen about the college part. A like-new fridge and couch are both part of my room. Both were 100% free.

Benjamin said...

I had the worst couches ever in college, and you always saw others throw out theirs on moving day. I had a room mate once who had great big nice leather ones and it was miserable to have parties because of it.