If you think that the decision of renting versus buying is limited to housing situations, think again.
- Transportation - We already covered the "buy versus lease" option, but there are others that arise. Does your family have a fuel efficient sedan that works for everyday use, but seems cramped on your twice a year road trips Run the math, upgrading your vehicle may be far more expensive than simply renting for those twice a year excursions.
- Appliances - Our last rental building allowed us to rent a washer/dryer set for $50 a month. We were going to do it, but then realized that if we bought our own we'd be able to "pay them off" with the amount of money we'd save in less than a year and a half. Over two years later we're still using our washer and dryer, which we've moved to a new rental. If our next apartment already has one, we'll just sell them on Craigslist.
- Boat/ATV/Jet-ski/Other Toy - I sometimes find myself longing for a fun toy to play around with. In my neck of the woods a boat or scooter seem to catch my fancy most often. In order to truly justify a purchase like that though, you have to truly be an enthusiast. Be realistic with yourself. If you can hardly find time to eat dinner as a family, are you really going to head over to the lake an hour away more than a handful of times a summer? Save your dough and rent a boat, or other toy, when you feel the urge.
- Fancy Outfit - I don't find myself going to galas all that often but some of you living in big cities may. If so, stop spending an enormous amount of money on designer gowns and accessories. Check out some of the great rental sites that let you borrow an item for one use and return it when you're through.
- Media - I used to be so proud of my DVD collection. It was filled with off-beat flicks that proved just how artsy and hip I was, even though I probably watched 50% of them only one time. My money would have been so much better spent on say, paying off my student loans, than purchasing a ton of very expensive and ineffective paper weights. We now get most of our media at the library, through services like HuluPlus (which costs less than a single DVD per month), or at our local video rental store.
- Tools - Some tools are worth the cost. I use our shovel multiple times most days in the winter,and I remember back when I used to mow my parent's lawn, that it was a weekly task. On top of it, having some tools at your disposal will allow you to fix minor issues, which will save you in the long run. Some other tools though can be easily rented, and are much more cost effective if seldom used. I'm not much into tools myself so I'm a bit pressed to come up with an example, but you handy people know what I mean.
- Audio/Visual Equipment - I know so many people that invest in a really nice camera as soon as they have their first kid. For some people, this may make sense, but for most of us I'm guessing it doesn't. Sure, I would want some really nice pictures a couple times a year, but most of the time I would just want to capture the moment, and my easy to use and ultra convenient iPhone would work just fine. You may justify the expense because you swear that you will take the yearly photos yourself instead of hiring a professional, but will you really? Hire a professional once a year, and use your trusty iPhone to capture the rest yourself.
- Second Home - This one is tempting. I live in cabin country and one could get ousted by talking negatively about a second home, but the fact is that for most of us the numbers just don't add up. Second homes are expensive, and they cost you money even during the season that you never go there. I know you have dreams of creating lasting memories with your kids at this wonderful home, but run the numbers. How often are you really going to get up there, how much will the upkeep cost, and how much will you spend just trying to get out there? Most of us could swing a really fancy two week vacation at a top of the line resort each year and still come out way ahead.
For the examples above, I used our own lifestyle to dictate which side of the fence we fell on, but the numbers don't lie. All you have to do is take the time to do a bit of research, and then be honest with yourself about the number of uses you'll truly get out of a given purchase. There is no right or wrong answer here, just the most efficient way for you to spend your hard earned money.