10 Items To Consider Buying Used (Plus 5 Things I’d Never Buy Used)

Buying used items can be one of the biggest ways to save money. A report by Kijiji states that the average Canadian family of four saves about $1,150 each year buying second-hand items.

If you want to try your hand at golf, or need a bicycle, exercise equipment, or a TV stand, why not look to see if you can find them used for a fraction of the price of what you’d pay for new – saving tax as well.

Thrift shops, and garage/yard sales are great sources of savings, and buying used is now easier than ever with internet and classified websites like Facebook, Kijiji, Craigslist, eBay, Etsy and Castanets. With these websites, look for sellers in your area so there’s no need to pay for shipping. You can often get high quality used products for less than the mediocre new items made overseas for discount retailers.

Many used items are in like-new condition, or can easily be cleaned or refurbished. Of course, you must still use your due diligence and examine the product – or get a professional to check it over for you.

Often when you’re done with the items you can resell them, sometimes for more than you paid.

10 Items To Consider Buying Used (Plus 5 Things I'd Never Buy Used)

10 items to consider buying used

  1. Books. Good sources besides used book stores and online are thrift stores and library sales. Secondary students are often forced to spend hundreds of dollars on required textbooks. I went to a local used book store for school books, but textbook websites like the one at Amazon.ca might work out better. Resell them when your classes are done.
  2. CDs, DVDs and video games.
  3. Jewelry. The industry likes to claim that gold and silver and precious stones like diamonds increase in value, but really, they have a dismal resale value. I found this out when trying to sell my late mother-in-law’s (really nice) wedding ring set. Make sure you buy from a reputable dealer, though. Costume jewelry styles often go through cycles and can be picked up for next to nothing at thrift stores.
  4. Clothing and fashion accessories. Check thrift stores, consignment stores for name brands, and vintage stores for unique items, especially for clothing for special occasions. One of my neighbours needed a suit for her young son for an event and didn’t want to spend a bundle on something he would never wear again. For just a couple of dollars she bought one at Goodwill (it was brand new, the pants weren’t even hemmed). Children and especially infants grow out of their clothing so fast they’re hardly worn and usually in good condition, or may have never been worn. Maternity wear is only used for a few months.
  5. Exercise and sports equipment. Someone else’s failed exercise resolution can score you a great deal. You can also save if you or your children are trying out a new sport, or you need to buy gear annually (hockey and skiing come to mind).
  6. Musical instruments. If you’re a beginner, or you’re not sure if you (or you child) will stick with it, buying a used instrument is the way to go. Search pawn shops and music stores.
  7. Furniture and housewares. There are plenty of high quality items that can be purchased for very little. Even Ikea-type knock-down furniture can be useful, especially if you have pets and/or young kids who can be hard on furniture. And they’re great for university students. If it’s not exactly to your taste you can paint, refinish, or reupholster it.
  8. Tools and garden supplies. Yard and garage sales are great for this. (My husband was in tears when all his tools went for next to nothing when we were downsizing.) A hammer is a hammer, right? Tools can be easily cleaned with some CLR, just make sure handles are secure.
  9. Cars. Save thousands of dollars in depreciation. According to Consumer Reports, a 3-year-old used car is the sweet spot. Ditto for recreational vehicles – boats, RVs, motorcycles.
  10. Home. There’s nothing like a brand-new residence where you have chosen all the fixtures yourself to reflect your taste. But, a pre-owned home is more likely to have a finished basement, landscaping, and upgrades. It will be in a developed community with shopping, mail delivery and, hopefully, schools close by.

5 things I would never buy used

  1. Children’s cribs and car seats. Back when my children were small, these were common to pass along, but now there are so many safety regulations and recalls it’s best to be safe and not put your children at risk.
  2. Bicycle, hockey, and ski helmets. Damage is not always visible.
  3. Mattresses. Just the thought of bodily fluids soaked into the mattress grosses me out. And, even really good mattresses don’t last for more than 10 years.
  4. Electronics. Laptops, plasma TVs, digital and video cameras are often expensive to repair. I would rather buy these from a dealer who provides warranties and tech support for their refurbished electronics.
  5. Swimsuits and undergarments. These are worn too close to someone else’s body for me to even consider. All I can say is Uggh!

Final thoughts

To be honest, I usually buy new rather than used. But, I am an “under-buyer”. I rarely buy anything unless I absolutely need it, so I don’t spend much anyway. In fact, I still own – and use – some items we received as wedding presents forty plus years ago. I dislike shopping, and scouring websites and thrift stores for great buys just seems tedious to me.

Related: Flipp vs. Checkout 51 – A Grocery App Comparison

But, that’s me. You can save hundreds – if not thousands – of dollars buying used, creating a budget surplus that can be used for saving, or indulging in some worthwhile purchase. Many people look at buying used as a matter of course.

Are you one of them?

5 Financial Traps Seniors Fall Into And How To Avoid Them

Scott Terrio’s Twitter feed reads like a financial horror story. Terrio, an insolvency expert at Cooper & Co. in Toronto, uses the 140-character medium to share the multitude of ways seemingly well-off Canadians end up buried in debt and turning to debt consolidation, consumer proposals, and even bankruptcy.

Canada’s record household debt levels have been a cause for concern for years, but Terrio sees a new problem on the horizon. Canadian seniors are the demographic increasing debt at the fastest rate.

Take Dorothy, an 81-year-old widow who owns a home with a 1st mortgage from a secondary lender. She refinanced a couple of years ago to do house repairs ($18,000), assist her son with divorce legal fees ($37,000), and to help her grandson with tuition ($8,500).

When her partner died she was no longer able to make the mortgage payments. A friend from church referred her to a mortgage broker.

The broker suggested a reverse mortgage which would let her stay in her house without the monthly mortgage payment. But the money from the reverse mortgage wasn’t enough to pay out the 1st mortgage after fees and penalties. She needed a private 2nd mortgage at 12 percent to pay the balance.

Dorothy co-signed a $26,000 car loan for her nephew and co-signed with her son for funeral expenses ($12,000) for her partner. Her son stopped paying, so Dorothy was pursued (100 percent).

She then ran into tax trouble by not having tax on her OAS & CPP deducted for the first few years. She owes $21,000 in tax, much of it penalties and interest.

This scenario is becoming more common among seniors today.

“Many are in a unique quandary. They’re asset-rich, but cash-poor. Cash flow is tight. Pensions are fixed, and many have underestimated retirement costs,” said Terrio.

So what do they do? Many seniors cash out assets to make ends meet. Others raid their home equity and take out lines of credit. All have financial consequences.

5 Financial Traps Seniors Must Avoid

5 Financial Traps Seniors Fall Into And How To Avoid Them

We asked Terrio to share the top financial traps seniors fall into and how to avoid them:

1. Tax problems

Most seniors were used to being paid by their employers in after-tax dollars. At pension time, many don’t have taxes deducted to offset their Old Age Security and Canada Pension Plan income and therefore end up spending taxable pension income.

It doesn’t take long before a small $5,000 tax problem balloons into a $20,000 tax bill.

Many seniors also cash out assets to bolster their income. This is taxable income at tax time.

To fix the problem, Terrio says, seniors can arrange to have sufficient tax deducted at source before they’re eligible for CPP and OAS.

“Then you’ll never spend somebody else’s money (the Crown’s).”

2. Multi-generational funding

Many seniors today are caught between multiple generations: they help fund their adult children, grandkids, and even support elderly parents in care facilities. That’s four generations funded from a fixed pension.

Terrio says the costs of this multi-generational funding often goes well beyond what most seniors can handle.

Avoiding this financial trap means going on a budget and sticking to it; separating family and emotions from finance.

Cash out some assets if it makes sense, said Terrio, but make sure to plan for taxation (see trap #1). Ask a professional. Or just say no. Seniors get into money trouble by saying yes too often.

3. Co-signing/Joint Debt

Seniors are frequently asked by their adult children to co-sign for credit. Many don’t understand the basics: each party is responsible for 100 per cent, not just half the loan. The lender will pursue the co-signer for the full amount upon delinquency.

“That’s why you signed,” said Terrio.

It’s difficult for seniors living on a fixed pension income to handle even minimum payments on a large-balance debt. If that’s the case, just say no. If family can’t qualify without a co-signer, perhaps they shouldn’t borrow at this time.

If you co-sign, first determine the maximum amount you may end up having to pay monthly in the case of a delinquency. Don’t sign if you can’t manage the worst-case scenario.

4. Home Equity Lines of Credit

Seniors often have significant home equity. It’s tempting to tap that equity to help loved ones, or pay for cars or vacations that regular monthly cash-flow may not allow.

Make a specific plan to pay back the home equity line of credit principal within a reasonable time frame. HELOCs only require you to pay the interest, meaning the balance remains. But the debt also remains against your house. Also, the interest portion, as we’ve seen recently, is subject to rate changes.

Don’t be pressured, says Terrio. “Run the HELOC terms by a trusted advisor before you sign.”

5. Unexpected medical expenses

Many medical expenses are not covered by the Ontario Health Insurance Plan (OHIP), or by private health care benefits.

“There is an assumption of ‘universal’ health care, yet many things are not covered. Costs can be huge,” said Terrio.

The best defense is to plan ahead and establish a proper savings cushion well before retirement.

Terrio suggests meeting with multiple insurance professionals and comparing coverage options. Ask what may not be covered. Budget monthly amounts that will provide maximum coverage for items you deem necessary, but that are not covered by government insurance.

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