It is tax time and some people will be getting back money from the IRS. What does this mean? Well, for many people, it is time to purchase a vehicle or another big ticketed item that they have been waiting for all year to buy. However, did you know that some of these items will depreciate their value over time?
If you are thinking about using your tax refund to put money down on a vehicle, you have to remember that you may still need to finance the vehicle. You may have done it the other way around by purchasing the vehicle prior to getting your tax refund and then carrying the balance on your credit card, believing that you will use your refund money to pay that off. It usually never happens. You must learn how to invest money wisely, whether it is your tax refund or other monies. It is better to buy something that will last you longer than a vehicle. Below are the four big ticketed items that you just need to leave alone because they all will depreciate in value once you make the purchase.
As we said before, while a vehicle purchase is ideal if you are in need of transportation, you have to make sure that you buy the vehicle that you can afford. Once you drive the vehicle of the dealer lot, it loses its value. You are going to spend approximately 72 months paying on a high priced vehicle that may have mechanical problems in a couple years and on top of that, you may be unable to sell the vehicle for the same value as you bought it. More importantly, you are taking on additional debt that you may not be able to afford. Don’t go for the automobile lease because you will still have monthly payments for a long time and the vehicle is still going to depreciate in value.
Don’t get caught up with buying jewelry that you don’t really need. Your wedding band, engagement ring or jewelry for anniversary gift is enough. However, when you go above this, you are only getting caught up in the depreciation game. The price of diamonds is expensive, but the value reduces to less than fifty percent of what you bought it for.
So many people are into electronics. Someone could own a cell phone today and when the latest one comes out, they go and buy it, putting the older version aside, even though, it is still in good working condition. That is the point. When you buy a cell phone, there is another version being made to attract your attention. It is like a revolving door. Don’t get caught up in it.
Furniture is also another item that easily depreciates. If you are honest, you will agree that if you bought a piece of designer furniture today and get tired of it in one year, you would not be able to get the same price selling it to someone else. It is better to purchase durable pieces of furniture so that you don’t have to make the same purchase too soon.