The Misconceptions of Borrowing vs Owning

The Misconceptions of Borrowing vs Owning

Have you ever heard someone say; “It’s better to buy than to rent”? Of course, you have, it used to be a popular way of thinking about our possessions. Over time, this concept of “having something to show” for your money has changed. Our lives can change so quickly, and what if it makes no sense to pay for something that you’re not going to use for a long time? What if it makes more sense to pay less and rent or borrow for a short time? Here are three scenarios that renting and borrowing make more sense than buying.

 

1. Short term ownership. How many times have you gone out to buy something new for a special occasion, worn it once and never touched it again? We all have. Wouldn’t it make more sense to rent that purse or jewelry for one night and not have to worry about collecting more clutter and space in your closet? Renting might even allow you to go really fancy and wear a luxury item for a fraction of the cost of actually owning it. Renting a bike for a day instead of buying one might be a better option for you if you only use a bike once a month (during the warmer seasons). Owning a bike may also mean, having to pay for storage, when you can rent and enjoy the bike for the day.

 

2. Added costs of owning. When you own an apartment or house, the cost of maintenance is never-ending. When you rent, a lot of the repair costs and maintenance fees are directed to the owner. Don’t let old saying like; “you’re paying for someone else’s mortgage” stop you from doing what makes more sense for you. With fluctuating property values, home ownership can be a risky strategy considering the added costs of lawyers, insurance, and taxes. Renting can be so much more flexible when you’re unsure of your job, for example, and you’re thinking of changing careers. Being flexible on location is key to giving you more options when considering a new employer.

 

3. More freedom, less ownership. When you own less, you have more freedom to move and go with whatever life may throw at you. When you’re leasing or financing a car, you have the option to buy the vehicle out or transfer the agreement to someone else.  Just like subletting is so much easier than selling a house, transferring a car loan or lease is much easier than selling a car. Not being tied down to a large possession allows you to have more freedom in your life decisions.

 

Our money decisions should make sense to us and not to the people around us. Sometimes it makes more sense to rent and borrow than it makes to give up a large chunk of money up front and own. The decision is yours as long as you consider all the possible options that are best suited for you.

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