When Free Stuff Costs Money

Like free stuff? You may want to think carefully before taking anything for free, because free often has costs.

Money Ning featured 4 situations where free can be expensive:

  • When you have to buy something else to use a gift. For example, a plane ticket to get to a free hotel.
  • If you might buy something even bigger. Beware those free Home Depot give certificates for free water assessments. You may wind up buying a much bigger, more expensive water system.
  • Are taxes worth the free stuff? There’s a well known IRS case involving a free MTV concert. One “lucky” winner received a free personal concert from Jon Bon Jovi and the IRS taxed the “lucky” winner for hundreds of thousands for the market value of the concert.
  • When you don’t use the free stuff. It sits. It takes time to clean up and maybe the cost of a dumpster.

It’s important to understand how we acquire free stuff. It usually involves something that we never really wanted, but begin reconsidering because it was free. If I were being honest, I’d venture to say that most free stuff has no real value for me or else I’d be willing to pay money to acquire it.

So to avoid the hidden costs of free, I thought up a list of when free stuff tends to remain free:

  • Gifts. Most people I know have an idea of what I need. Thus, most of the free stuff that comes to me as a gift remains free.
  • Family and friend hand-me downs. My daughter has taken possession of her older cousin’s house play set. Our friends just dropped off a number of baby items for our new son. These free items get use, because they are needed.
  • Loaners. Borrowing your neighbor’s tools means money saved in not having to buy new ones. Borrowing by definition requires a finite period of time.

You’ll notice, that the best way to receive free stuff, is when it is for something that you are in need.

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