Frugal Idea #47: Car Shopping

Too Many People Buy Things They Don’t Need, With Money They Don’t Have, Trying To Impress People They Don’t Like.”

I currently have a 2005 Mazda3 and it is time to say farewell. The shocks need some fixing, there are minor dents, and I know my heart is ready to move on. The car has a lot of meaning for me. It was my first large purchase as an adult (I was 25 years old) and really was the start of a lot of changes in my life. It was my first time securing my own car insurance and was very proud at the time of learning I can earn a discount with my Golden1 Credit Union membership. It was at that time I also was learning to adjust my monthly rent expenses as I was moving into a one bedroom apartment. I remember thinking… as long as I can afford the monthly car payments, I will be ok! Over the years, I picked up expenses related to an engine change, oil changes, tire changes, headlight changes, registration costs, a window break in, and let us not forget the car wash expenses. I had purchased the car brand new because I wanted the new car smell and I wanted to feel good! I should have known that the purchase price was a false number. There are many expenses tied to your purchase and the secret killer is of course, the interest. As I have learned over the years, it is the overall cost we should ask if we can afford and not the monthly payments we can afford.

Now that I am in the market for a new car, I am making this a very calculated move. I paid off the car almost two years ago and it has been amazing to channel the $280 monthly payments towards my credit card debts and student loans. Thinking about adding a monthly payment now that I am 100% debt free just does not seem like the direction I want to take. A few months ago, I made up my mind that I wanted to pay this car in full. I was advised by a friend that now that I am debt free, I am guaranteed a low interest rate on a car loan! Not the advice I am looking for. I did not want to go back to that lifestyle of owing anyone anything. I am going to stick to my following rules:

1) Buy within my means. I have saved a substantial amount for the purchase. I still want to have a minimum of 3 months of living expenses, so I have to execute at the right time and make the right purchase. There are a lot of people who say I “earned” the right to buy a luxury car, but I know myself. Would I buy it for me because I really want it or to impress others? I could care less what people think of what I choose to drive, so I will only buy if I can pay it in full. Tip: Know how much you can spend. If you can buy a car within that amount, great! If you need to finance a loan, take as little out as needed. Can you wait an extra month of savings? Patience is everything

2) Purchase in full. It took months of planning, but I knew the day would come that I would have to purchase a new car, so I used my Every Dollar App (everydollar.com) to budget money every month towards a new car. I cut back on spending and announced during the holidays that I needed a new car because my car was on its last legs. People understood. Messaging was clear. Tip: Figure out how much you want to save and divide that by how many months out you need to save. I knew I wanted to save at least $2000 about a year ago, so I saved at least $200 per month towards the car. I gave up on that massage or dinner out that was too expensive.

3) Buy used. I definitely want to buy a used car. Since moving towards a minimal and simple lifestyle, I just need a reliable car that can get me to work and to life events I choose to go to. What is more important for me is early retirement, traveling, and saving for my down payment. Tip: Write and review your dream list all the time. It will keep your priorities in order. If you value a down payment towards a home more, keep the amount you want to spend on the car low. That can go towards the down payment (your priority)

4) Research. It is important to ask around for advice. I typically have been asking friends who love cars and made purchases themselves. At the end of the day, it will be my decision what I choose to do. Since I value time over money (time is so limited!), I do not want to take a long time to do this. Make a decision on what kind of car you want and go for it. Tip: Research the following – Kelly Blue Book pricing, what folks pay with their luxury cars when it comes to maintenance and gas, your local dealerships (do they offer certified pre-owned), the inventory available, your commitment to driving a distance for a purchase for a deal, cost of your trade in or sell of your own vehicle, and how the car will affect your insurance.

I am by no means a car expert! In fact, I am probably at the bottom of the pack when it comes to advice. However, I have improved my life drastically with my money and minimalism. Any tips you can provide to readers, please share! Just remember, do not spend more than you have to. As the quote says: ““Too Many People Buy Things They Don’t Need, With Money They Don’t Have, Trying To Impress People They Don’t Like.”

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Frugal Idea #46: Moving on Forward

Happy New Year! Confession. I lost my passion to write lately. It is January 1, 2016 and I am back on. Three situations has happened that inspired me to write again:

  1. A friend of mine bought his new car in cash
  2. My cousin who is still in High School told me she reads my blog
  3. Someone reminded me that my blog helps them stay focused

How can I stop? For those who I inspired this past year, I am continuing to write for you.

Let’s catch up…

As you may have read, I paid off my student loan mid 2015 and I have been able to aggressively save money. It feels quite amazing to start this year without any interest rates to pay. I also have been able to save over a year of rent! It is quite powerful to know that if I happen to lose a source of income, I have some time to change the situation.

My car is going through some maintenance issues, so I have mentally prepared myself to start searching for a new car. My goal is to pay the car in full and still have at least three months of emergency funds in the bank. I will then aggressively build back up. Since I increased my retirement contributions to 15%, I am excited to see my nest egg grow.

For 2016, I want to keep my life simple. I still value time over money, so I am still finding ways to eliminate “stuff”, relationships, and/or events, that add no value to my life. I did goal myself to increase my net worth by 20% by the end of the year which will help my personal goal of finally having a down payment.

Unfortunately, I did not meet my fitness goals in 2015, but I checked out Crunch Fitness today! Now that my finances are in much better shape, it is time to make sure my mind and body are fit as well.

I hope you join my 2016 journey with me! I will be more committed to writing more. I hope I add more value to your lives so that your net worth increases and you are financially fit. Cheers and let us move forward!

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