I am questioning the true validity that if you own something you are actually better off. I have made the commitment to live debt-free so that colours where I am coming from too...
I mean if you own your own home, most people can not afford to buy without a mortgage. If you use one of those mortgage calculators it will show you how many tens of thousands of dollars (Usually HUNDREDS of thousands
) you will pay in interest over the course of the loan. I just did one based on a $100,000 home loan (not that you can buy ANYTHING that cheap in Australia, except a tin shack in the middle of the bush LOL). Even if you paid it off in a few years, you would still accrue thousands in interest. Most people here are doing 60 year mortgages as its all they can 'afford' to actually pay. But on a standard length mortgage (30 years here) you would pay over $159,000 interest on a property of that value!!!! This is just an example. I can't imagine the interest incurred for a loan to buy a regular house $300,000-$500,000 minimum where I live.
Ideally someone would be able to save the entire cost of the house before buying- I know personally I will never buy unless I can manage just that. But I also know I will most likely never buy because of this. And how long would it take to save the entirety of a whole house?? Probably the same length of time as the mortgage. Then you add in the astronomical costs of owning a house: rates, water, electricity, maintenance, repairs, gardening, gas etc etc etc. And I wonder why people think that owning a home is a form of financial security and is somehow cheaper?! Maybe in our grandparents day when 'owning a home' meant you ACTUALLY owned it, outright. I think its actually cheaper to rent forever and then at least you have the flexibility to live where you want and the landlord has the bills for fixing things that go wrong in the property. I used to think renting was 'throwing money down the drain', but actually owning a home seems much more of a waste of funds than renting to me now. Since its so much more expensive and you wont actually own it truly until you are elderly or very close to it.
Then there's cars- arghhh. Add in all the costs, licenses, fuel, insurance, registration for the vehicle, the initial cost of the vehicle, loan interest if you took a loan, repairs and general upkeep, tyres, Im sure Im forgetting some....
I need a new car at the moment. But when I added up the costs of just the rego and fuel alone it was a minimum of around $100 a month. That is not including any of the other costs associated. Say if you buy a $5000 car and it last you 5 years, that's another $80+ a month. There are car rental places here where the price is $25 a day, I'm sure if you shopped around you could find better. It would actually work out a lot cheaper to just rent a car once a fortnight and get whatever you need done on that day. Taxis are expensive but not as expensive as the costs to own your own- unless you were using them all day long. Obviously if you live very rurally this is not an option.
I was very reluctant to buy my first car and waited til I was pretty old compared to most before finally doing so. I can't count the thousands of dollars poured down the drain so far- and still no cars to show for it. Rentals/taxis are a lot more reliable than the used cars I've had and cost way less- and hey at least their air con works
So I'm actually considering just staying car free doing a combination of living near our needs, public transport, and using a taxi whenever its needed. Still is working out WAYYYYY cheaper when I do the math. Like thousands a year cheaper.
Then there's appliances....I don't even know where to start. They are built to die and they all burn out on me so fast- even though I take incredibly good care of things I own. Planned obsolescence I guess
If laundromats weren't so impractical, even at $4 a load I would still come out cheaper than what the washing machine costs to buy vs. how long it lasts (not including the added costs for gas, water & electricity). Plus there are appliance rental companies here where you can rent all household items at a very cheap weekly rate and at the end of the term you have the option to upgrade or keep it. And they are responsible for replacing any ones which break on you.
I'm sure I've forgotten some of the things I wanted to say, but this is already too long.....
So I guess I'm not asking something specific, just wanting to start a dialogue and hear others thoughts on renting VS owning things. Because I feel like 'ownership' is not the financial relief/stability that it is touted to be!
I mean if you own your own home, most people can not afford to buy without a mortgage. If you use one of those mortgage calculators it will show you how many tens of thousands of dollars (Usually HUNDREDS of thousands
Ideally someone would be able to save the entire cost of the house before buying- I know personally I will never buy unless I can manage just that. But I also know I will most likely never buy because of this. And how long would it take to save the entirety of a whole house?? Probably the same length of time as the mortgage. Then you add in the astronomical costs of owning a house: rates, water, electricity, maintenance, repairs, gardening, gas etc etc etc. And I wonder why people think that owning a home is a form of financial security and is somehow cheaper?! Maybe in our grandparents day when 'owning a home' meant you ACTUALLY owned it, outright. I think its actually cheaper to rent forever and then at least you have the flexibility to live where you want and the landlord has the bills for fixing things that go wrong in the property. I used to think renting was 'throwing money down the drain', but actually owning a home seems much more of a waste of funds than renting to me now. Since its so much more expensive and you wont actually own it truly until you are elderly or very close to it.
Then there's cars- arghhh. Add in all the costs, licenses, fuel, insurance, registration for the vehicle, the initial cost of the vehicle, loan interest if you took a loan, repairs and general upkeep, tyres, Im sure Im forgetting some....
I need a new car at the moment. But when I added up the costs of just the rego and fuel alone it was a minimum of around $100 a month. That is not including any of the other costs associated. Say if you buy a $5000 car and it last you 5 years, that's another $80+ a month. There are car rental places here where the price is $25 a day, I'm sure if you shopped around you could find better. It would actually work out a lot cheaper to just rent a car once a fortnight and get whatever you need done on that day. Taxis are expensive but not as expensive as the costs to own your own- unless you were using them all day long. Obviously if you live very rurally this is not an option.
I was very reluctant to buy my first car and waited til I was pretty old compared to most before finally doing so. I can't count the thousands of dollars poured down the drain so far- and still no cars to show for it. Rentals/taxis are a lot more reliable than the used cars I've had and cost way less- and hey at least their air con works
Then there's appliances....I don't even know where to start. They are built to die and they all burn out on me so fast- even though I take incredibly good care of things I own. Planned obsolescence I guess
I'm sure I've forgotten some of the things I wanted to say, but this is already too long.....
So I guess I'm not asking something specific, just wanting to start a dialogue and hear others thoughts on renting VS owning things. Because I feel like 'ownership' is not the financial relief/stability that it is touted to be!