Sometimes it’s the thrill of a sale that lures us into buying something we don’t really need and can’t afford. Other times, it’s the urging of others to “keep up,” be like them, or fit in with the group.
Then there are those crazy, inexplicable moments where we wake up to realize we spent good money on a hulking pile of crap, an overpriced membership, or an unplanned splurge.
Whether it’s a shirt you never wear or a car you absolutely hate driving, we’ve all made purchases we aren’t particularly proud of.
10 Purchases People Almost Always Regret
Still, some “regret purchases” tend to leave us full of self-loathing far longer than others – simply because we should have known better or because they were so dang expensive to begin with.
Want to avoid a purchase you might live to regret? Several money bloggers and financial advisors weighed in to share the most common financial blunders they’ve heard to date.
Boats
If you gather enough boat owners in one place, you’re bound to hear horror stories of pricey repairs, depreciating values, and plain ol’ hassle. The truth is, boats are mostly giant money pits for the vast majority of people who own them. Worse, they are money pits that depreciate in value at lightning speed.
“There is an old joke that say the best two days of a boat owner’s life are the day he buys his boat – and the day he sells it,” says Ryan Guina of CashMoneyLife.com. “Boats tend to be very expensive to own and maintain, and many are purchased on a whim.”
Before you buy anything that has an engine and floats on water, make sure to assess the total costs of ownership – not just the price you’ll pay to pull your new boat off the lot. Consider the costs of financing, insuring, and maintaining your new floating ride, along with transportation costs like gas, cleaning fees, and winter storage fees. And remember you’re paying all that for something you might only use a couple of months per year.
If you’re determined to get out on the water, a better idea is to rent a boat several times per year instead, says Guina. You’ll spend a lot less money without all the commitment. And you’ll never have to sell your boat for a fraction of what you paid, either.
Anything ‘As Seen on TV’
We’ve all seen those late night commercials for cleaning supplies, Sham-Wow type cloths, real estate sales courses, and pressure cookers, but are any of those purchases really necessary?
Paul Moyer of SavingFreak.com says absolutely not. In fact, he says, only about 25% of them are worth anything close to the asking price. How does he know? He’s a self-proclaimed “sucker” for infomercials that promise the world and deliver little more than regret.
“The guy on TV selling them is awesome and the products seem like they will change your life, but in reality they are usually just another addition to the junk drawer,” says Moyer.
If you didn’t need it before you got lured into a 30-minute infomercial, you certainly don’t need it now. Moyer’s advice? “Turn the television off,” he says.
DVD Collections
Nearly everywhere you go, you’ll find bins of DVDs and movies you can purchase for $4 or $5 each. But, are these really a good bargain?
Jeff Rose of Good Financial Cents doesn’t think so. “I don’t know a single person who doesn’t have at least a few DVDs at home and, unless you have kids, you do not watch them” says Rose.
Plus, with movie-streaming and rental services like Netflix, iTunes, Amazon Prime Video, RedBox, and GameFly readily available, we no longer need to buy DVDs and store them like long lost artifacts.
Can we just stop with this? Please?!
If you find that bargain bin calling your name, says Rose, step away. “Even though a $4 movie night seem like a good deal, it rarely is,” he says.
Just One More Drink
If a beer or glass of wine with dinner is a good thing, five or six drinks is even better, right?
Actually, nope. Not at all. Those few extra drinks can lead to more than a hangover; they can lead to regret.
Unfortunately, let’s have “just one more drink” is a stance many of us take too often. While you might have more fun with a few more drinks under your belt, going overboard will inevitably lead to regret and wasted funds more often than not.
“When you’re eating out, alcohol is so expensive, but if you’re having a good time and having great conversation, it’s easy to just order another one for you and maybe even for your friends,” says Cat Alford.
If you’re not careful, says Cat, this can add another $50 or $100 to your bill, which can cause a really unpleasant end to your evening meal.
If you plan to drink at dinner, try to limit yourself to one or two. And if you’re still enjoying the conversation and ambiance afterward, take the party with you and drink at home. Your pocketbook will thank you.
Exercise Equipment
Do you hang your laundry on a perfectly good elliptical machine or treadmill? If so, you’re not alone. Year after year, people rush out to buy home exercise equipment so they can get back into shape and get rid of that spare tire. But over time, our enthusiasm for home fitness seems to wane. And if you don’t use your treadmill, it can even serve as a daily reminder of your expensive failure to stick with the program.
At that point, you can either sell it for a less or hang your clothes on it, which is what most people seem to do. Still, there are other alternatives to consider if you’re worried you won’t use that thigh-master calling your name.
“Instead of that impulse treadmill, get a one-month membership to the local gym – at least at first,” says Joseph Hogue of My Work from Home Money. “If you stick with it, then maybe you’re ready for a bigger at-home purchase.”
That Backyard Hot Tub
A hot tub for the backyard can seem like a great idea if you’ve got achy joints or simply love the idea of soaking with a cold drink in hand — but will you really use it enough to get your money’s worth?
“You may enjoy it the first few times,” says Jim Wang of Wallet Hacks. “But eventually, the cost of maintenance and the fact that you have to deal with chemicals along with the infrequency with which you use it all make a hot tub a near-instant regret.”
“I have a friend who bought one many years ago and the times he’s cursed it greatly outnumber the times he’s been in love with it,” notes Wang.
Vaccuums Sold by Door-to-Door Salesman
Vaccuums are notorious for dying well before their time – or, at the very least, clogging up and becoming almost unusable before they are officially “dead.” You can buy a more expensive model, sure, but even the Dysons of the world may not last more than a few years. So, what are you to do?
Caught at the wrong place at the wrong time, you may be enticed into a “home vacuum demonstration” by a friendly Kirby salesperson intent on selling you their latest model. But if you buy the pitch hook, line, and sinker, you may live to regret it!
Financial planner Peter Huminski of Thorium Wealth says he fell for the spiel twice – twice!
“I know this may sound funny, but I have owned two now, and they are the purchases I’ve regretted most in my life,” Huminski says. Long story short, Huminski paid $1,500 for his first super vacuum that was supposed to last a lifetime. When it didn’t, he got roped into paying several hundred dollars to get a new one shipped out. That one, he says, worked for another year then died.
Now he sticks to cheap vacuums, he says. Even if he has to replace them every few years, it’s a lot cheaper than forking over $1,500. “I will never buy another vacuum over $100 again,” he says.
- Related: Handling Door-to-Door Solicitors
Timeshares
While you might score a deal buying a discounted timeshare from a frustrated owner on the secondary market, these week-long vacation blocks aren’t always a good deal when you consider what you actually get for the full sticker price.
“People get excited by the hype of great vacations all over the world and only for a small amount of money,” says Ricky Lalvani of Richer Soul. But if you dig a little deeper, you might find that the numbers don’t really work out in your favor.
“The math on a $25,000 week is that it’s immediately worth about 80% less for most people,” says Lalvani, adding that timeshares are notoriously hard to sell. And after that, he says, you’ll still have the “ongoing and ever-increasing costs of maintenance, exchange company membership, exchange fees, and then special assessments,” he says.
“The better deal is to rent the week from someone else who just wants to recover a little bit of their massive loss.”
That’s right; you can easily rent a timeshare or vacation condo without actually owning one. And most of the time, you’ll end up much better off.
An Expensive New Car
Is there anything like that new car smell? The simple elegance of an odometer with only eight miles clocked so far? The feel of clean leather sets unspoiled by your kid’s grubby fingers, dog hair, or stray Doritos crumbs?
Buying a brand new car with all the bells and whistles offers a glimpse of the good life – a chance at a new beginning. But once the newness wears off and your car is an inch deep in Cheerios and opened mail, the only thing left to “savor” is that huge new car payment you signed up for.
We’ve run the numbers before and, like it or not, new cars are still depreciating assets that can suck your finances dry if you let them.
“I always recommend my clients purchase a one- to two-year-old certified vehicle if they are looking to purchase a new car,” says Joseph Carbone, Jr., founder of Focus Planning Group. “You’d be amazed at how much money you can save on a ‘practically’ new car.”
Extended or ‘Extra’ Warranties
Whenever you make a big purchase — from used cars to appliances to that biggest buy of all, your home — you’ll likely be offered an extended warranty that will cover breakdowns or replacements of major components within a predetermined window of time.
But extended warranties are rarely a good deal for consumers, and there’s a reason companies try to push them at the point of sale. Their profits come from the purchase of your warranty — and the fact that they’ll do almost anything to avoid paying out if you do in fact need to use it.
An extended warranty on a car, for example, can add thousands of dollars to your total purchase, says financial planner Kenneth Feyers of Retirement Seeds. And if your warranty doesn’t cover the exact repairs you actually need… Welp! You’re out of luck.
The same can be said for home warranties, says Kate Dore of Cashville Skyline. “In most instances, these service contracts don’t cover as much as you would expect.”
At the end of the day, saving the extra cash in an emergency fund is almost always a smarter move.
How to Avoid Making a Purchase You’ll Grow to Regret
If you’re worried about overspending or constantly find your closets filled with stuff you don’t really want, it might be time to reassess your spending habits and ask yourself what is going on. Perhaps you love playing victim to every television ad you see. Or maybe you’re just a sale sucker who can’t say no to a “good deal.”
Whatever your spending weakness is, look for ways to talk yourself out of purchases made on the fly. Instituting a 24-hour wait period before you make a big purchase can be an extremely smart move, as can setting a fun-spending limit that you agree upon with your spouse.
On top of that, simply learning to tell yourself “no” can help a great deal. The excitement of buying stuff can be addictive, but with a lot of purchases, all you’re really left with in the end is the bill.
What purchases have you regretted in your life? What would you add to this list?
Related Articles:
- The Strategic Splurge: Saving for the Stuff You Really Want
- The Biggest Regrets and How to Avoid Them
- Control Yourself: 11 Ways to Stop a Splurge Purchase
- On Splurging and Regret
The post 10 Purchases You’ll Probably Regret appeared first on The Simple Dollar.
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