A big-ticket purchase can be intimidating. It brings up all the hard-hitting questions we would much rather avoid, from ‘Can I afford this?’ and ‘Where will I be a year from now?’ to ‘Should I pay off my student loan instead?’. And so, instead of any introspection, we move bravely on with our plans, maxing out our credit cards, instead of considering more practical options.
In case you’re in the market for furniture, the collective costs of which often go unnoticed, here are four questions you need to ask before deciding whether you should buy new or used or just rent.
1. Can I afford to buy furniture?
Turning a house into a home is expensive. Quality furniture costs anywhere between $7,000 and $18,000, depending on whether you’re renting a studio or a larger house. This furniture isn’t a great financial investment even with a lifetime of use. Your money is locked in and you miss out on investment opportunities. Chances are, though, you will move much earlier. By renting furniture, you sign up for flexibility and convenience. As with most things you enjoy, put your furniture on a plan!
2. Can I put the money to better use?
Furniture is a depreciating asset. You may have $3,000 to spare to get the bare essentials, but evaluate whether that cash can go toward something more urgent or useful. Are there debts or loans you could pay off? Or perhaps by investing the money, you could move closer to your financial goals (what if you’d put the money toward a few Bitcoin last year? Or an index fund?).
3. How permanent is my situation?
When things have settled down for you, it makes sense to buy quality new furniture for the long-haul. But if there is any uncertainty in your future, investing in a home’s worth of furniture is a big no-no.
New furniture depreciates faster than you can say sleeper sofa, second-hand won’t fetch you much, and while some items are easy to palm off online or through word-of-mouth, you’ll have the hassle of transporting those you cannot to the dumpster. Renting is fuss-free: there are no delivery charges, no looking for buyers and you don’t even have to assemble it (or dismantle it) yourself.
4. How hard is it to set up?
Purchased furniture, whether new or second-hand, needs to be set up and maintained regularly to increase its longevity and condition. This costs money, and who else would need to do the work and pay for it but its owner: YOU. Here’s where you save by just renting the furniture. The real owners will come in and set it all up for you. And before it needs any maintenance, you can just swap it for better furniture!
So what will it be? A large, upfront payment for furniture you may not need (or want) 12 months from now or the convenience of renting! You decide.