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The Dangers of Buying Used

September 30, 2019 By MelissaB Leave a Comment

Right before going to grad school, I went to my first garage sale. I bought a blender for $3, which I still have today, 20 years later. That was my first garage sale, and I became a fan of buying used from that moment on – mainly because it helped me stretch my meager income.  However, there are also dangers of buying used. In certain situations, buying secondhand can cost you more money or compromise your health.

Bugs

Furniture is expensive, so buying used can be enticing. After all, you could save quite a bit of money. Instead of buying a $900 sofa, you could get it from the classifieds for $100 or so. But often, the savings isn’t worth it.  Buying couches, mattresses, and other soft furniture can potentially give you bedbugs or fleas.

Photo via idpinthat.com

While this isn’t very likely, buying furniture contaminated with bedbugs or fleas is a possibility. If you are one of the unfortunate ones who buys used furniture with bugs, you could be paying much more out of pocket than you would if you had just bought the furniture new.

“A full bed bug removal, expect to pay anywhere from $500 to $1,500 depending on the method you choose and the experience of the exterminator,” according to Angie’s list.

Safety Issues

There are also other items you can buy used that pose significant safety hazards, such as used car seats and helmets. Did you know that car seats have an expiration date? They do, and using them beyond that point may mean that they’re less sturdy and reliable.

Dangers of Buying Used
Photo via idpinthat.com

In addition, you cannot always tell if a car seat has been in an accident.  If it has, the recommendation is to buy a new one because it may no longer provide adequate safety if it’s in another crash. Buying used helmets is risky for the exact same reason.

Mold

This is not a topic that many people are aware of, but 24 percent of the population is mold-susceptible. That means, if they’re exposed to toxic mold, their bodies have difficulty getting rid of the mold internally. Often, these people become ill – depending on the level of exposure.  Obviously, when you buy used, you don’t know what kind of house and environment the item has come from. Furniture, books, clothes, anything that is soft or made of paper, may harbor toxic mold spores, which could make you, or any member of your family that is mold-susceptible, sick.

While most people who enjoy buying second hand have no difficulties, there are obviously dangers of buying used as stated above. You can avoid these by being picky about the items that you buy, or you can choose to stop buying used at all.

I, and two of my children, found out this year that we’re mold susceptible, which has caused a few of our health issues. I’m no longer buying most products, especially those that can harbor mold spores, used. It’s either spending good money on a product that will last, or buying the most frugal option for something such as kids’ shoes that my children will grow out of quickly.

Do you have limits on what you will buy used? If so, what are those limits?

Filed Under: Frugality, Saving

How to Get Out and Stay Out of Debt

September 23, 2019 By MelissaB Leave a Comment

As a nation, we’re individually mired in debt.  Achieving financial freedom is strange to many people because they accept that they will always have a mortgage and a car payment, but many also accept that they will always have student loans and credit card balances.  They argue that life is just too expensive, and there is no way they can make it through without credit.  However, there is a simple way to get out and stay out of debt.

Why Gazelle Intensity Doesn’t Always Work

If you’re deep in debt, you may want to follow the Dave Ramsey approach and become gazelle intense, funneling all of your extra money into your debt snowball, even if it means that you’re neglecting other categories of your budget like your house and car repair fund and your retirement.

How to get out of debt and stay out of debt
Photo via flickr Mhorr Gazelle (Nanger dama mhorr) © by 5of7

While gazelle intensity works great if you only have a small amount to pay off, say $10,000 to $15,000, many people are far deeper in the whole than that, and it’s very difficult to remain gazelle intense for years.  Gazelle intensity is meant to be a sprint, ideally for less than a year, not several years if you’re heavily mired in debt.

In addition, while it’s easier to neglect certain categories in your budget for a year or less, doing so for longer will cause problems.  Your car will need repairs over the course of several years.  Your home will need repairs which may be minor, or unfortunately, major.  But because you’ve been funneling everything into your debt snowball, you may not have enough money to pay for a repair in full, so your only choice may be to pay on credit and negate your progress.  How discouraging is that?

A Simpler, Slower Way to Get Out of Debt

These days I’m all about moderation, even for those who have significant debt.  There is a simple way to achieve financial freedom—quit accruing new debt.

The only way to do this is to make sure that you have a realistic budget and money set aside for emergencies and irregular expenses.  Put away the credit cards so going further into debt isn’t an option.

Paying Down Debt

Then, pay the minimum on all of your debts and don’t reduce that number as the minimum payments go down.  Let’s say between all of your debts, your minimum monthly payment total is $1,365.  A year from now, since you haven’t accrued any new debt and the balances are going down, your minimum monthly payment might have dropped to $1,290.  Don’t reduce your minimum monthly debt repayment.  Instead, readjust your payments so that you’re paying the minimum payment on all bills except the smallest one.  On the smallest one, pay the additional $75 that is the difference between your minimum monthly payment last year and your minimum monthly payments this year.

Sure, it’s hard not to want to pay more than the minimum monthly payment that you started with in the beginning, but the idea isn’t too pay all the debt down immediately.  The idea is to continue to budget and fund all of the necessary categories so that you can achieve financial freedom.

Setting a Realistic Budget

So, you’ll take a realistic look at your expenses.  If you have a home worth $200,000, you’ll set aside at least 1% of that price a year in a repair fund (approximately $166 a month).

If your car is old, you’ll set aside a reasonable amount monthly for repairs and maintenance—maybe $200 a month.  And if your car has over 150,000 miles, it may be time to set aside a monthly amount to buy a new car in a few years—with cash.

How to Get Out of Debt
Photo via idpinthat.com

Determine an amount that you want to set aside monthly for an emergency fund, and then just keep adding to that fund whether you have an emergency or not.  Some time, you will have a major emergency, and you’ll be glad that you have a full funded emergency fund so you can pay in cash, not credit.

Getting and staying out of debt requires that you stop using credit and that you have a budget that considers all of your true expenses for the year.  While this process make take longer, it also assures that you will achieve financial freedom.

Which approach do you take to get out of debt?  What would you advise others who are deeply in debt?

Filed Under: budget, Debt Reduction

4 Dangers of Using Automatic Bill Pay

September 16, 2019 By MelissaB Leave a Comment

Many people love the convenience of having their bills paid automatically each month with no effort on their part.  Like many, these people probably have about a million and one other things they’d rather be doing than taking time to pay their bills.  However, there are 4 dangers of using automatic bill pay that people should consider carefully.

dangers using auto bill pay

4 Dangers of Using Automatic Bill Pay

If you have already set up automatic bill pay or you’re considering doing so, first consider these potential pitfalls:

Vulnerable to Hackers

dangers automatic bill pay

If you have your information stored in the company’s server, which you’ll have to do if you sign up for automatic pay, that information is vulnerable to hackers.   The more places you have your information stored, the more vulnerable you are.

Vulnerable to Overcharges

Occasionally, the company that is collecting your money automatically will have a computer error and collect too much.  Steve Hawkins shared with Kiplinger’s, “My sister’s auto-pay electric bill somehow got an extra zero added to it.  It took her a week to get the money back in the account, and she still had to pay for the bounced checks out of her own pocket.”

Vulnerable to Overdrafts

If you live on a fairly tight budget, you may set yourself up for overdrafts if you use automatic bill pay.  Variable bills such as electric, water, and gas may be more than you budgeted for.

For instance, our neighbor has all of her accounts on auto pay.  One month, her water bill was $500 instead of the usual $80 per month.  She had a water leak that she was not aware of, which was why her bill was so high.  She did not have an extra $420 in her account to cover the difference, so she bounced payments to several other companies and had to pay overdraft fees.

Vulnerable to Continued Charges

Do you really want a company to have unlimited access to your checking account and routing numbers?   They could pull money out of your account any time they want.  (Of course, that is illegal, but that does not stop some companies.)

Dick Novack told Kiplinger’s, “My horror story is that a national company restarted debiting my account eight months after the contract was over.  It took a change of my credit card number to get it to stop.  Now I’m in court trying to get a year of debits back.”

Final Thoughts

True, electronic bill pay is convenient, which is why so many people use it.  However, I never want to give a company unlimited access to my checking and routing number.  Instead, I pay the bill online each month, initiating the payment myself so the company does not have unlimited access and my account information is not stored on their server.

While many people swear by automatic bill pay, avoiding it may be the smarter choice.  There are just too many risks.

Do you use automatic bill pay?  If so, have you had any trouble doing so?  Do you monitor your account each month to make sure your being charged correctly?  If you don’t use automatic bill pay, what are your main reasons for avoiding automatic bill pay?

Filed Under: General Finance

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