Frugally Spending What I Saved Last Year

So what is Sluggy going to do with that $23K she saved last year?
Here is what we've done with $10K of it.....

We bought a car!

Hubby's commuting car was a 2000 Kia Spectra.  We had bought that in 2001, used obviously.  We've been tracking the maintenance costs(gas mileage, repairs, etc.)on it the last 2 years.  It finally got to the point where we were pouring more $ into it than we were realizing a benefit from driving it.  It had over 150,000 miles on it and was coming up on needing work in the $1K+ range at the end of 2009.

So hubby started researching and seeing what was available locally used.  He found this 2006 Chevy Malibu.  It was part of a rental fleet and only had 29K miles on it, had good maintenance records and a clean CarFax report.  It's a bit larger than the Kia so will be a bit more comfortable to drive, which is important for hubby.  But it gets the same good gas mileage as his old car.  It will also hold 5 passengers so we all can fit in it if need be.

I just abhor spending money on cars to begin with and I absolutely will NOT buy a new car!
Why take the financial hit for buying a new car that depreciates as soon as you drive it off the lot?  If you think Chanel or Clive Christian fragrances are expensive, try the price tag on "new car smell"!lol

While I'm not happy about spending this money, it is something we needed.  And by waiting and saving up and paying CASH we did NOT take on a car loan!  This car costs $10K cash.  It will not end up costing us over $12K because we took on a car payment of $340 a month for the next 3 years at a 6.83% interest rate.

Now we just have to decide what to do with the Kia.  We run our cars into the ground but this one still has a bit of life left in it.  Even though it won't benefit us much on next year's taxes we'll probably donate it rather than junk it for parts.

Sluggy

Think about Debt & Cars in a NEW Way!

                Above-The 'Family Heirloom' 1990 Toyota Corolla


In this family, we don't DO Car Payments!

We did once upon a time.
The year we bought our LAST car and FINANCED it was 1994.
We have been Car Payment FREE for 15 yrs.
And you can be too!

Sluggy's 2 Rules for Buying Cars

1.  Don't buy new.  A new car can lose up to 20% of it's value in the 1st yr.
Yes I said 20%!


2.  Don't finance it.  Save up and pay cash.  This will keep you from getting into car debt and keep you from buying more car than you need.  Once you get into "Car Debt Hell" it is very hard to extract yourself.  Just say NO!

Think about it this way....if you finance a $20 thousand Dollar car over 5 yrs(at the current avg. rate of 8% interest), you will be paying over $24 Thousand Dollars for that car.  Your $20K good deal may not be such a bargain once you figure in what you actually paid the bank and that your $20K car after 5 yrs. is now only worth $6K.


4 of those 5 cars we bought since our last "car-payment" car in 1994 were used.  The car we bought new I don't know WHAT I was thinking at the time....it was not my best moment but at least we got a deal on it and we paid CA$H.

Buying a car(new or used)on Credit is very BAD for your financial health.  Every car should have that warning label on it's side, just like packs of cigarettes do.
And I am NOT joking about that!

This is something I feel strongly about and it's the biggest single reason(outside of not having health insurance & abusing credit cards)that keeps people from getting & staying out of debt.

Save up to buy a car.  Once you buy it, keep putting aside the amount you put aside to buy that first car.
That way you can save up for the next car and not have to finance it.  You are already in the habit of putting money aside for a car while you were saving to buy the first one, so just keep putting the money aside.  And don't find other ways to spend it....no trips to Disney World, no Big Screen TV, no extravagant dinners out, no new wardrobe, etc.

If you do this, when your current car finally belches it's last puff of smoke, you'll have money to buy a new-to-you car for CA$H!

I came across this video from Dave Ramsey that may help you see the whole cars & debt thing differently.
Hopefully it will make you come around to seeing that you too can be Car Debt-Free!



Sluggy