“A penny saved is a penny earned” ~ Benjamin Franklin
One of the most under-utilized ways to keep more cash in our pockets is to stop buying things that we can rent; which surprisingly is something we do far more than we realize.
And while you probably don’t own one yourself, pricey vacation timeshares are the perfect example of why renting is a far better strategy than buying; here’s why:
Whenever we go on holiday and stay in hotels we never actually buy the rooms we sleep in, do we? I mean since we can’t actually take them or the furnishings home with us, hotel rooms are all pretty much rentals, right? Common sense says yes.
And therein lies the rub; because it’s this same common sense – or lack thereof – that timeshare property hucksters look for in prospective purchasers. When pitching blocks of time in their fancy resort vacation packages, salespeople exploit people lack of knowledge and understanding between what owning and renting really mean in this case. Here’s how:
Once they’ve zeroed in on Mr. & Mrs. Unsuspecting Target, salespeople seduce first them with promises of multiple vacations per year in gorgeous, exotic lands and beachfront properties. Once the baits been taken and customers are salivating, they next set out to prove just how incredibly affordable timeshare ownership is. This is usually illustrated by elaborately working out the math on paper, you know, so it’s all there in black and white for clarity; except clear is rarely the last thing these scribbles ever are.
Still dazzled by euphoric images of lazy days spent laying on white sand beaches sipping fruity, umbrella laden cocktails at hundreds of resorts, these naive souls become so excited many will sign right then and there… And that my friend, is a HUGE mistake.
Because with this single stroke of a pen these poor saps will commit to years and years of monthly payments, just for access to a bunch of overpriced vacations that – interestingly enough – statistics say most of them will never even use. It’s true.
For example, a friend of mine spent $5K per year for the “opportunity” to book at “exclusive” resorts in Mexico, the Caribbean and Florida; resorts which curiously enough, were the exact same ones we found on Expedia and Travelocity for less than half what he was paying.
He was not pleased that (a) I pointed this out shortly AFTER he’d signed a ten-year contract – Ouch – and (b) his timeshare deal didn’t include any air fares… Double Ouch!
In other words, like many people my friend also bought overpriced time in hotel rooms that he’ll probably never use, therefore we will probably never the incredible value he signed up for in the first place! And this kind of waste is what makes renting so attractive; it’s costs a fraction of what buying something costs, and there’s no contracts to sign or stuff to store in the garage.
Renting a hotel room at a resort (as in booking individual holidays) means you get the best price, have no contracts to sign and only pay for the room when you use it… end of story!
It’s no different than renting an electric drill to use for one day; better to pay $20 once and get your holes drilled than pay $200 for something you may never use again. Renting means you keep more cash in your pocket to be used for the things you really want.
Now to be fair, the same thing happened to me – only with ice skates – but it still stung like hell, because I’m so damn cheap. Here’s what happened:
A friend of mine threw a skating party at his home and insisted I bring skates so I could join everyone as they twirled around the frozen lake. Not owning skates I reluctantly went out to the mall and spent $90 on a new pair. Big mistake.
Being brand new the skates were stiff, rigid and hurt my feet from the second I laced them up. Then, one I hit the ice I’d barely made it a few yards before several blisters began forming and my feet seared in pain with every move. It was brutal; but what could I do?
By the time I’d completed a single lap of the lake I was in so much pain I got off of the ice; and much to my feet’s delight removed my skates immediately. For the five years I owned those skates, I only wore them for those painful 40 minutes on that chilly day. What the hell was I thinking?
If I’d rented skates for the party, not only would I have spent only $15 bucks, but I’m pretty confident they would have been well worn and broken in saving me the agony of dealing with blisters for a week.
I still curst the day I heard “Come to our skating party, it’s going to be fun!” and was thrilled the day I finally said “Good Riddance!” and dropped the skates off at the Goodwill.
The bottom line is that these days you can pretty much rent anything you need from a tuxedo to a sliding ladder to a coffin (what!?) for a fraction of what it costs to buy them, which means more money to do the things you really want to do, right?
Even better, if you ask around you can often borrow this stuff from your friends for free, or a case of beer… not too bad!
So the moral of the story is this: Before you ever buy something that you’ll only need once or twice, consider renting it to save (a) money, (b) storage and (c) face; but (c) only counts if you are dumb enough to try and skate on a frozen pond in brand new hockey skates… but now then, who’d ever be that dumb?
CALL TO ACTION:
- Before you buy ANYTHING, see if you can borrow it from a friend
- If not, run the numbers to see if it makes more sense to rent rather than buy