Why I Bought My Baby Stuff Used

I had my first baby last June, and I probably bought one or two small purchases new. The rest was all second hand. I’ll also let you in on a secret, but please, don’t tell anyone I know. I returned about 90% of my baby gifts and bought stuff for our new home instead. I know; it is a bit shameful. However, I did tell everyone I know that we didn’t need anything for the baby, and that resulted in getting about six sets of baby washcloths and several newborn clothing sets.

Now that my baby is almost a year old, I can say that I am very happy that I bought my baby stuff used. Here’s why:

I Made a Profit on My Used Goods:

Get this, not only did I save a ton of money from buying used baby items, but I also made a profit on majority of it. I bought all of my daughter’s clothing from newborn to six months and majority of my equipment from a wealthier mom of two daughters. She was also very sweet and threw in a ton of free items because I was buying so much from her. For all of the clothes, I paid $110. There was about 200 pieces, if not more. So far, I have sold 80% of the clothing and have made much more than $110.

Many other items I have sold for what I bought them for. Basically, I was able to use the baby items for free.

I Don’t Feel Bad About Stains:

ABought my Baby Stuff Useds I said above, I bought a lot of clothes from the wealthy mom. There were some very nice outfits in them, and I received a lot of compliments on how I dressed my daughter. However, I am not very good at laundering or keeping messes contained. A lot of pieces were stained once my baby girl started eating solid foods. Not only that, but my dogs chewed up several pieces of her clothing too. Now, if I had spent more even $5 a piece for each outfit (which is fairly cheap in baby world), I would have been devastated at how many pieces were ruined. However, since most of the clothing was free (after adding in the money I made back), it was easier to just let it go. I instead used the pieces as baby wipes to further save money.

I Don’t Have to Store Anything:

I don’t know how many more babies are in my future, but I do know one thing. I don’t want to store several baby items to use for the next baby. If I had bought everything at full price, I would have the guilt to save everything so that I wouldn’t lose my money. However, since I bought everything at 60-90% of the original price, I am able to sell the item for most of the cost. I also know that when the next baby comes around, I will be able to find the same used baby equipment for the same prices.

Don’t forget that every square inch of your home that is devoted to storing stuff is costing you money in some way or another. Plus, who doesn’t love having a cleaner, clutter-free home?

I Don’t Have Buyer’s Guilt:

Buyer’s guilt can happen to a lot of new parents. You buy that awesome looking Bumbo seat for your baby only to find out that they don’t like it or that it only keeps your baby happy for one month. For example, I bought a Prince Lionheart bebePOD Flex Baby Seat used for $8. On Amazon.com, it is $34. My baby used it for two months. So basically, my weekly cost to use this seat was $1 (though, this does not include the fact that I will sell the seat for profit or cost). If I had bought it at full price and used it for two months, it would be like paying $4.25 a week. I would rather treat myself to a Starbucks latte once a week with the money saved.

One more example; I was set on breastfeeding and pumping for the baby. However, for many reasons, it didn’t work out for us. I would have felt even worse knowing I spent $260 on the breast pump. Instead, I paid $120 and sold it for $70. My cost was $50 for six weeks of pumping, or $8.33 a week. Considering it costs about $15 a week to rent a pump, I think I made out on top.

I am very passionate about buying used items, especially for my baby. Baby items are so pricey, so I loved having top of the line items that were still in our budget. Also, let me just quickly mention how much better used items are for baby’s health and the environment. Used items don’t give off that new chemical smell and used clothes have already been worn and washed a few times and contain less harmful chemicals and toxins too. Think twice the next time you shop for your baby.

In a Car Accident? Should You Pay Out of Pocket for Repairs?

Our Chicago winter this year has been a lot less like a Midwest winter–the snow storms have been few and far between.  A few weeks ago we finally got hammered by a storm that dumped 10 inches over the city.  At the height of the snow storm I had to pick up my son from school.  As I waited at a stop sign, the driver behind me bumped into my bumper.

Luckily, the damage wasn’t bad.  When I took it to a repair shop for an estimate, they thought it would cost between $580 and $1,200 to fix depending on if there was any damage inside the bumper when they take it off to repair it.

Surprisingly, the woman who hit me decided she wanted to pay out of pocket rather than go through insurance.  When I told her that the repair would take 2 to 3 days and we’d need a rental car during that time, she agreed to cover that cost, too.

This is the second time I’ve been rear-ended in 5 years, and both times the repairs were less than $2,000.  Both times the drivers opted to pay out of pocket.

If you’re in a minor fender bender, should you pay out of pocket rather than going through insurance?

Reasons You May Want to Pay Out Of Pocket

Pay out of Pocket for Repairs1.  If you have a high deductible.  If you have a deductible of $1,000, for example, paying out of pocket if the repair is just a few hundred dollars over that amount may make sense.  You’ll save yourself from an increasing premium.

2.  If your insurance premium will increase substantially.  Each insurance company is different, but rest assured that if you cause an accident and file a claim, your insurance will increase.  Some insurers increase your premium by 10% and others by 20%.  You may be able to call your insurer and ask how much the premium will go up before you decide to pay a claim or not.

3.  If this is your second accident.  While you’ll pay an increased premium for one accident, if you file two claims within a few years of one another, the increase is substantial.  For instance, State Farm generally charges a 10% increase in premium for the first claim, but that amount increases to 45% for the second claim.  While it may hurt your budget to come up with a thousand or two to pay out of pocket for the repairs, that may be the better option if you’re facing a substantial increase that could last several years.

4.  If your insurance doesn’t have an accident forgiveness clause.  Some insurers offer an accident forgiveness clause, meaning, if you’ve been with the company for a certain number of years (usually 5 to 9) with no accidents, the insurance company won’t increase your premium on the first accident you file.  Again, though, you may want to save this benefit for a more substantial accident that you can’t afford to pay out of pocket rather than when the repair is relatively minor.

If you cause an accident, don’t automatically file a claim.  There are benefits to paying out of pocket.  You just need to understand your insurance policy as well as know exactly how much the repairs will cost before making a decision.

If you’ve caused an accident, did you pay out of pocket rather than filing a claim?

Original img credit: Oops, by fortes on Flickr

What is Financial Independence

In my post “Are we Doing Personal Finance Wrong“, I talked a little bit about “Financial Freedom”.  Of all the comments that the post got, that was the one thing that was mentioned most of all.  Which, to me, means it bears some further discussion.

Financial freedom, or financial independence, can be defined a little bit differently depending on the person doing the defining.  Like most personal finance, it’s highly dependent on the values of the person.  What I define financial independence as might be a whole lot different from what you define it as.  I think, no matter who is defining it, the real keystone is the word freedom or independence.  We all want freedom and independence.  Some autonomy from the rat race.  The idea of having the financial ability to declare our independence is alluring.

What is Financial Independence, for me.

Financial IndependenceMy definition of financial independence is likely pretty similar to most.  In it’s most broad sense, I define it as the ability to not be swayed by financial needs.  Breaking it down a bit more, it means not “needing” a job just to make ends meet.  It means not “needing” a job to keep a roof over my head.  It also means having the ability to take advantage of opportunities to improve my situation.  Whether that means having the cash on hand to be able to buy or start a business, buy a rental property, or just take a month off to travel or learn something new isn’t all that relevant.  It’s that I have that ability.

Something that needs to be said here is that at one point, not that very long ago, I thought of it as being synonymous with “independently wealthy”.  Which may or may not be true depending on your definition of independently wealthy.  For sure, I don’t believe that it matches up with the definition I had back then.  Back then, I would have told you that independently wealthy meant retirement and not doing a dang thing.  Sitting on the beach all day, every day, being utterly non-productive.  That definition has changed.  A lot.  Financial independence, if it’s synonymous with independently wealthy, doesn’t mean that you don’t work, but that you have the financial freedom to do the work you want to do.  Because you are free from the “need” part of the financial equation, you have the ability to do the work that you feel called to do without regard for how much it pays, whether it’s part-time or full-time, or whether it’s a short term project or not.

What is Financial Independence, for you.

As I mentioned above, your definition might differ slightly (or a lot) from mine.  Maybe, for you, it really does mean sitting on a beach somewhere, doing nothing.  Maybe it means not having to work and spending all your time volunteering instead.

However our definitions might differ is somewhat irrelevant.  Our personal definitions still mean that it’s something worth pursuing to each of us.  And, if our end-game is to be financially independent, I still don’t think we’re doing personal finance right.  I still don’t think we’re even close.  I think we need to break away from the systems we have, find the ones that work for our personal finances, and then achieve our financial independence.

Achieving your Financial Independence.

Breaking away from the systems we have for personal finance won’t be easy.  Heck, our definition of financial independence will probably change along the way and require a new system again.  But, achieving that financial independence should be our primary goal.  Not retirement.  Not our childrens’ college education.  And certainly not saving up cash to pay for that big SUV.  Our primary goal in our personal finance should be achieving financial independence.  Once we’ve achieved that, retirement, education, and big trucks will come.  And they’ll come without sacrificing anything.

The Path to Financial Independence.

Much like our definitions differ, so too will our path to financial independence differ.  Undeniably, I think that the first landmark on that path has to be the complete and utter destruction of all debt.  Before we worry about anything else, we have to be free of the yoke of debt.  Joan Otto, the community manager at Man Vs. Debt, wrote about this recently specifically referencing retirement accounts.  Take a minute or two and read it.  Then, pay special attention to the comments.  Aside from a few people, almost all of the comments are people who think she’s off her rocker.

Is she off her rocker?  Or is she just developing a new system for her personal finance that leads towards her financial independence?  It takes a certain amount of courage to admit to the thoughts and ideas that she does in that post.  (I should know, see: Why I’m Withdrawing from an IRA)  But, then try and remove what you’ve been taught about retirement and saving from your mind for a minute and re-read section 4 of her post.  She’s not being irrational.  In fact, I’d argue that she’s being overly rational.  I think I’ll have to write more about that in another post, but the Vulcan, logic loving, part of me thinks she is right.

Our paths to financial independence will vary.  Some of those people in the comments of Joan’s article will achieve it using the current system.  Many of them will have started saving early, and found ways to drastically save.  But, will they have the liquidity available to make a move on an opportunity in the 30’s, 40’s, or even 50’s?  Or will it have to wait until they’re past “retirement” age and have penalty free access to their nest eggs?

Find your path.  Start the journey, and achieve your financial independence.

Have you already started on your journey?  Have you found your path?  Have you achieved your financial independence?  There are many of us here, including myself, that are new to the journey or haven’t even begun yet that could benefit greatly from your story.  Will you share it with us?

img background credit:Fireworks at Swindon by Stephen_Gunby, on Flickr