There was a certain rich man who had a steward, and an accusation was brought to him that this man was wasting his goods. –Luke 16:1
It’s criminal to waste another’s money. It’s sinful to waste resources. But it’s stupid to waste our own. Even so, we do it all the time. The smart thing to do when you have a need for any durable good, and gadgets fit into that category, is to consider the return on investment (ROI). This rule applies if you’re buying equipment to earn money or for personal use.
New or Used?
Used is not always the most economical. I’ve never bought into the idea that a late model used car is best. Yes, its depreciation rate is high up front, but if you intend to keep the car as long as it runs, the new one may be your best buy. How do you know which? Just divide the purchase price by the number of years you intend to keep it. A new car may cost $5,000 more than one three years old, but the price divided over ten years may be less than the used car divided over seven. Time is just as important as cost in the equation. Be shrewd.
Gadgets are another story. The buying public throws away perfectly good items for no other reason than they want the latest and greatest. Apple and the other big producers take advantage of this fact. Why else would they bring out a new model every year? Falling into this trap can put a unnecessary dent in anyone’s budget. If your gadget doesn’t last longer than a year, you’re not getting a reasonable ROI.
If you’re someone who budgets wisely, you can take advantage of the fact that there are a lot of unwise people upgrading every year. This makes for a lot of good used gadgets, and they are discounted a lot more than good used cars.
Don’t Give into the Kids.
Would you believe all those gadgets pictured above belong to three teenagers? Image how much could have been saved if those items were purchased used from Amazon, e-bay, or any of the reputable sites offering such things.
It’s not a question of need. Kids today do need cell phones and notepads. One day while driving my granddaughter home from school, she was sitting in the passenger seat doing her homework and using her cell phone at the same time. When I grumbled, she showed me her assignment on the phone. Can’t lose your homework that way.
But don’t let them use need to take advantage of you. I shouldn’t have to mention that children will want the latest and greatest. I would guess they’d rather have a used gadget than no gadget at all, though, so stand firm. Use this as a means of teaching them to withstand peer pressure and use good judgment. It’s a life lesson that can save them from a mess of misery down the road.
Repair or Replace?
My husband is of the opinion that everything I want to replace has at least two good years left. I divide these years into the tinkering stage and the duck-tape stage. But I’m in agreement that my computer should last as long as possible. This laptop has been to the shop three times. I’m loath to give it up. It still has Windows 7 on it. Need I say more? When it does die, I’ll be looking for a used one.
Budgeting for Gadgets and Other Durables.
Yes, yes, yes. You must budget for durables, but they are not included in expenses. Short term saving is usually the way to go. Only as a last resort should you use your emergency fund or put these purchases on a credit card, except when you intend to pay off the credit card when it’s billed.
The steward in Luke 16 was unjust, self-serving, and a crook, but he was shrewd. If we are to live richly, we have to be as shrewd as the unjust of this world. Just because we need a gadget doesn’t mean we have to have the latest model. The item that satisfies the need at the lowest price is shrewd. Being able to afford it isn’t a good reason for wasting money. We are accountable down to the last cent. Those who are accountable for the least will be given more. That’s an irrefutable law.
How do we protect ourselves from the wicked but shrewd of this world? That’s a topic I’ll address next week. Until then, budget and spend wisely.