An Exact Breakdown Of How Much I Saved By Renting Everything From Cars To Clothes

When I graduated from college in 2015, I had one goal: to be debt-free. I dreamt of a life of flexibility and freedom, where I could travel and pursue my interests without being tied down by a monthly payment or compounding interest.

So during my first year in the real world, I knew what I had to do: pay off my $14,000 of student loan debt as quickly as possible. (Spoiler alert: I did it in just seven months.) I got there by being ruthless when it came to slashing my expenses and finding creative ways to live on less, like taking advantage of the sharing economy.

Here’s how renting helped me shave $5,000 off my yearly budget.

Cars

My 2000 VW Cabrio was the first item I put under financial scrutiny. The options were simple: Keep it or sell it. On the one hand, I needed a way to get to my office in San Diego, which was about eight miles away from my apartment. But I was also spending nearly $500 per month on maintenance — there was that memorable time it shut off on the freeway — gas, parking and insurance. (Fortunately, I didn’t have a car payment.)

While I was crunching the numbers and considering my options, the decision was made for me when my car broke down beyond repair. So I sold the car to a junkyard for $700 — and just like that, I was car-free.

I decided not to buy or lease a new car, and instead stick with ride-share and rental options like Car2GO, Zipcar, Uber and Lyft — plus my bike and the bus — as my primary new modes of transportation. On average, it costs about $70 per week to get to and from work and to run errands. On weekends, I ride with friends whenever possible, or split Uber fares. Plus, my partner has a car, which helps.

Because I lived in Los Angeles for two years prior, this transition was easier than I expected. I was used to walking to my job and college classes, hopping on buses, biking busy roads, and requesting Ubers. My coworkers think I’ve lost my mind, but I just smile to myself, because I never have to worry about tickets, registration, or any more highway breakdowns.

What I paid to own: $6,000
What I pay to rent: $3,640
Yearly savings (plus profits from selling my car): $3,060

Clothes

When I landed a media relations job at a university and needed a business-casual wardrobe, it seemed like an expensive proposition — and a big threat to my goal of paying off my loans. But as I researched budget-friendly options, I stumbled across wardrobe rental companies, like The Ms. Collection, Rent the Runway and Le Tote. (Wardrobe rental options for men include The Mr. Collection and The Five Four Club.)

Intrigued, I looked into Le Tote, which sends you unlimited boxes every month, each with three pieces of clothing — everything from jackets with capes to faux-fur leggings — and two accessories. When you’ve worn everything in the box, you ship it back, and within four days, a new one arrives. The cost: $59.

I was new to the workforce, so I didn’t have much budget data of my own to compare. Plus, I tended to shop for clothes in bulk: Some months, I spent nothing — others, I’d drop $200 on a single trip to Ross. But overall, I’d say my clothing costs lined up with the average consumer spending of around $150 a month on apparel and services, which made a service like Le Tote a great deal. Especially considering it also provides a glamorous, constantly-changing wardrobe. Win-win.

What I paid to buy: $1,800
What I pay to rent: $708
Yearly savings: $1,092

Sports Equipment

It might be because I live in sunny California, but sports equipment has always been a line item in my budget. Certain equipment like surfboards and paddleboards can retail between $200 to $500 each, though, so buying definitely wasn’t in my budget.

Believe it or not, local universities can be a great resource for discounted rentals. Since they’re already offering equipment to students, it doesn’t cost them anything to rent to the community, too. For a total of $50, I scored one-day rentals on two beach cruisers, a stand-up paddleboard and surfboard from the university where I work — more than enough to get my summer sports fix.

What it costs to buy: About $350
What I pay to rent: $50
Yearly savings: $300

Books, Movies and TV

When it comes to cutting expenses, entertainment is typically one of the first things people sacrifice, but it’s also one of the most painful. After a hard day at work, my favorite way to unwind is with a glass of wine and a good book or cup of cocoa and Food Network streamed through a $20 monthly service called Sling. Before rediscovering my love for the library, I’d spend about $20 on two new books every month and almost as much on movies. (My student ID got me $8 tickets — a bargain in Southern California — and I typically splurged twice a month.)

After I rediscovered my love for the library — which is filled with free books, magazines, DVDs and even new movie releases — I paid a grand total of $0 for these things. I did, however, satisfy my House Hunters addiction by keeping my $9 monthly Netflix subscription. But other than that, the library was my entertainment sanctuary.

What I paid to buy: $672
What I pay to rent (Netflix): $108
Yearly savings: $564

By renting instead of buying, I was able to save $5,002, which was 35 percent of my student loan balance. The best part? I never felt like I was sacrificing anything. In fact, my life improved. The stress of car maintenance, overstuffed cupboards and discarded book purchases disappeared from my life. In its place, I was left more money and freedom — and a debt-free life.

Read the original article on Grow. Copyright 2016. Follow Grow on Twitter.

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  • Court E. Thompson

    I feel like this is a flawed concept…particularly where the clothes are concerned. You rented instead of buying this year. What about next year? If you purchased good, versatile pieces, they could easily last 5 years with proper care. Instead you have nothing really to show for the money. And I say this as someone who opts to rent the runway for every fancy event I have instead of using the perfectly suitable black cocktail dress I own. I get the concept of paying more for the privilege of wearing something new to me that I couldn’t afford to buy.

    The same could be said for the sporting equipment. If you’re only going to use it twice a summer, then renting is great. But if you bought one for $350, you’d make your money back in 7 years if you continued to only go twice. Every other time you used it would up the value of your purchase.

    Basically, you saved more this year first but will ultimately spend more overall when you do begin to purchase things. It’s the trade off for paying off your loans quickly I guess, but I think there’s a lack of foresight.

    • Sophia An

      I completely agree with the clothes.
      There are things you won’t need all the time and I saw the people spend about $155 a month on clothes but if you’re not the type of person that needs to wear something different every month is makes no sense to continuously purchase new clothes. It would save money to buy basics if you’re not particular about style and then rotate those.

    • Anon

      That probably depends on her shopping patterns, regarding clothing, and the interest on her loans. New life transitions can be really difficult to figure out sartorially sometimes. I’ve found that I’ve gone into some situations with an idea in mind of what new, professional me should wear that doesn’t always match the reality of the job. By far, I’ve had the most waste in the first year of new life stages. Also – and I don’t know this about her – renting seems reasonable if your weight fluctuates as well. I wouldn’t rent my clothing at my life stage but it seems pretty reasonable for her first year in the job market.

      • Court E. Thompson

        I disagree to a point. Black pants, a couple sweaters, and blouse or two are the most basic clothes for an office – especially a business casual one. But, like you said, other factors might be in play here. She might like wearing totally different outfits all the time or her weight might fluctuate. Renting for the first month or two could make sense until she understands the vibe of her office and the field, but I’d argue (especially since this is a finance site) that paying to rent pieces for an entire year is wasteful.

  • TreeTownGirl

    What’s with the photo of the West Side Market in Cleveland as the main photo for this article? Haha, don’t take this as a hyper-critical comment… I was just shocked to read the author lives in California and not Ohio.

    • Holly Trantham

      It was just pretty and shopping-related 🙂

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