I’m sure we’ve all had experience sharing costs, expenses and things we own, whether it’s renting a cottage, or sharing the cost of utilities with roommates.
In this week’s post, we’re going to talk about how we can save (and maybe even earn) money through sharing.
Let’s start by acknowledging that the whole idea of sharing anything with strangers is questionable right now due to Covid-19. I thought about leaving this post until a later date but decided to go forward with it. I want us all to continue thinking about different ways we can do more with our money, even if this one may not be as easy to do right now.
Have you ever seen the Simpsons episode ‘Three Men and a Comic Book’ where Bart and his friends pool their money together to buy an expensive comic book, “only to see it destroyed by their selfishness and inability to share.”1?
Hopefully your sharing scenarios have been more successful.
Unfortunately, we often don’t think about pooling our resources, we go right to buying it outright, whether we can afford it or not.
Why do we feel the need to own things instead of sharing?
Well, first and foremost, we are conditioned from a young age to see ownership of ‘things’ as a measure of success.
We assume that someone owning a house is more successful than someone renting.
We typically have no idea if the person owning is in deep debt with the bank actually ‘owning’ most of the house, and maybe the renter is flush with cash!
We just make an assumption that the home-owner is wealthier and more successful.
Obviously, someone that owns a car must be more successful than someone who doesn’t, right?!
There’s supposedly a prestige in owning things, filling our house and garage with stuff. We allow ourselves to become defined by what we own, they are our status symbols.
All that said, we actually ‘share’ items all the time, even if we don’t think of it in that way, like when we:
- Rent movies or video games
- Sign out books, movies, and music from the library
- Use the BBQ in a shared Condo space (I’m waiting for my next invite DR!)
- Loan or borrow things from friends and family like the Shop-Vac I borrow from my neighbour or the James Bond Blu-ray boxset I loaned to my parents
- Vehicle rentals
- Uber, Lyft & Airbnb
- Buying items second hand – we will talk more about this in a future post
Sometimes agreements to share costs or assets can be straightforward, like sharing the cost of utilities with roommates.
Over the last decade, the idea of ‘sharing’ and specifically the ‘Sharing Economy’ has become much more prevalent.
What is the Sharing Economy?
According to The Cambridge Dictionary, the Sharing Economy is “an economic system that is based on people sharing possessions and services, either for free or for payment, usually using the internet to organize this.”2
Today the Sharing Economy is bigger than ever or at least it was prior to Covid-19. With the creation of companies like Airbnb, Uber, and others, people around the world are sharing their assets, saving and also making money doing so.
Let’s take AirBNB for instance. Whenever I’m about to go on a trip, I look up hotels and Airbnb’s, and find myself almost always going with Airbnb’s. I find them a lot less expensive and they are often in great neighbourhoods.
I’m careful to do my research to make sure I’m not getting a dud.
A few years ago, I even started putting my own place up for rent on Airbnb whenever I would be out of town. Last year I brought in $4200 during the 7 weeks I was out of the country.
I was initially hesitant to rent my place, as I didn’t like the thought of people in my space, plus the risk of theft, damage, etc.
My partner at the time was keen on doing it, so we wrote out a list of the things that made my uncomfortable, and she and I figured out how to address each one.
It took a lot of work to get me outside of my comfort zone. After now having rented my place dozens of times over a couple of years, I’m pretty comfortable with it.
Part of the reason I’m able to travel as much as I do is due to much of my travel costs being offset by renting my place out.
Before Airbnb and the term ‘Sharing Economy’ even existed, I experienced saving money first-hand through sharing.
My father had a snow-blower for many years that he purchased with two neighbours. They split the cost three ways, and all had access to it when they needed it. If the cost of one snow blower were $600, they each only had to pay $200, instead of buying one each at full price.
That’s a huge savings on something you may use 5-10 times a year, that you really don’t need to have sole ownership of.
I applied that learning experience to a washing machine in one of my first apartments. Two roommates and I lived on the first floor of a house, with two neighbours on the floor above. None of us liked having to drag our laundry two blocks away to the local laundromat wasting hours there.
We had the idea to buy a washing machine, put it in the shared basement space, and split the cost across everyone living in the two apartments. Sure, there was the odd time I wanted to wash something, and it was in use, but that was a minor inconvenience compared to spending a couple of hours a week at the laundromat.
There was some risk with my father’s snow blower and our washing machine that someone could move, renege on the agreement, or something else.
Fortunately, in both scenarios, it worked out perfectly for many years.
Often the best things to share are items we don’t actually need to use all that often. The snow blower was the perfect example of that, but there are many more.
The other day I walked through my house and looked at many of the things I own, trying to think about why I bought them, and whether or not they could have been a shared purchase.
Some examples include:
- Tools – I have many tools I don’t use often that I probably didn’t need to buy. I could be renting them from Home Depot, borrowing from friends, or going in together with friends/neighbours
- Camping gear – For the few times I go camping, why do I have so much camping gear!? These days I’m really more of a cottager anyways
- Lawn Mower, Edge Trimmer and Hedge Trimmer (yes I have all three)
- Leaf Blower – In my defense, my last house had tons of huge trees on the property, although I haven’t used it in 8 years since moving to my current place
The lawn mower is a good example. I have a small yard. My neighbours have small yards.
And yet we all own lawnmowers! Granted we probably all had them prior to moving in, as I did, but still!
If we hadn’t had them prior, or if one of us needs a new one, I would hope we would make a point of working together, instead of just buying a new one.
Maybe my neighbour will just let me borrow his lawn mower in exchange for feeding his cat when they’re away.
I’m sure he’d just loan it to me without something in exchange, but we all feel the need to reciprocate.
BTW more on our need to reciprocate in a future post!
Part of considering sharing instead of ownership is not just to save money.
Do all of my neighbours and I really each need separate lawnmowers?
Think of the environmental costs going into the production, selling, and shipping of each of those units.
Perhaps if we had massive lawns, but we don’t!
One of my neighbour’s lawns is about 8’x8’, taking him about a minute to cut.
I’ve been thinking about one big and expensive asset I own lately, questioning why I even have it – My car.
Looking back at my expenses for last year, I spent over $5000 between insurance, gas, maintenance, license, plate renewal, etc.
$5000 AND THAT DOESN’T INCLUDE ANY CAR PAYMENTS AS IT’S PAID OFF.
That’s a lot of money.
I’m that much more aware of those costs as work has been slow during Covid-19, plus I haven’t been driving as much.
I like the convenience of having it, and there’s something to be said about the comfort of having my own car, my personal (and clean) space within it, and I really do enjoy driving.
But is that enough to offset the cost?
I’m also very aware of how much easier it is to use someone else’s car, through apps like Uber and Lyft, or rental cars via the traditional rental companies, or the newer methods like Zip Car.
Also, over the next few years, self-driving cars will become more and more prevalent. At what point does it become so easy for a car to just show up at my door whenever I need it, that I just don’t feel the need to own one anymore?
Yes, right now with Covid, the thought of getting into a car that tons of other people have been in doesn’t sound like a good idea.
But Covid (hopefully) won’t be around forever.
And my car is 7 years old. It’s in great shape, but at some point in the next few years I will need to replace it.
It’s worth starting to think about whether I should buy a new (used) car when the time comes or look at other options to save costs through sharing.
How do we share more?
The first thing I would suggest is to do what I did – walk around your place, and identify things you don’t use very often, that could have been shared costs instead of outright purchases when you acquired them.
Think about it, talk about it, especially for items that might need replacement, like my car.
Certainly, if you are about to buy something, consider who else in your sphere that it may make sense to share the expense with. Family, close friends and neighbours are usually the best candidates.
Make sure to come to an agreement around what you will do if someone moves or otherwise wants out of the agreement. Does the person leaving lose their investment, or does the other party have to pay them out, and if so, at what price? Always better to have this discussion up front instead of after the fact.
Also make sure to challenge yourself on our views about ownership equaling success. I’d rather own less things, saving money to go on more vacations, or retire early.
When in doubt, start with something you don’t use very often, like the lawn mower or snow blower. Then work your way up from there.
I’m not suggesting you try to share a TV with your neighbour or a lamp with your sibling but think about bigger items and costs for things that maybe you just don’t need to own outright.
Looking for ways to save money through sharing is a great way for all of us to ensure we are Doing More with Our Money.
Thanks for reading.
3 Replies to “Save Money Through Sharing”
Great article, Mike. Lots to think about in this one.
Great post! At the start of COVID and when commercial hand sanitizers were rare, the University of Hong Kong posted instructions on how to make your own. Problem is, all the raw materials tend to be best purchased in bulk. So my brother pooled his money with his friends and each came away with a few litres of homemade sanitizer. He’s still using it!
great example, Louisa!
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