Last week I gave an introduction to this series, so if you haven't read that yet, then click here to give it a read before continuing!
I have promised you all a collection of my best money saving and managing tips, so here, is my My Money Saving Secret Number Two!
I have NEVER had a car payment. I buy used, but still reliable cars, because I have always known, that buying a brand new car is NOT a smart idea! And instead of me just telling you my reasoning, I am going to let Dave Ramsey tell you! This is from his book, "The Total Money Makover" (This man is a GENIUS!).
"Myth: Car payments are a way of life; you'll always have one.
Truth: Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.
Taking on a car payment is one of the dumbest things people can do to destroy
their chances of building wealth...USA Today notes that the average car payment
is $378 over 55 months. Most people get a car payment and keep it throughout
their lives. As soon as a car is paid off, they get another payment because they
"need" a new car. If you keep a $378 car payment throughout your life, which is
"normal," you miss the opportunity to save that money. If you invested $378 per
month from age 25 to 65, a normal working lifetime, in the average mutual fund
averaging 12 percent (the 70-year stock market average), you would have
$4,447,084.01 at age 65.
Hope you like the car!
If you put $378 per month in a cookie jar for just ten months, you have almost 4,000 for a cash car. I am not suggesting you drive a $4,000 car your whole life, but that is how you start without debt. Then you can save the same amount again and trade up to an $8,000 car ten months later and up to a $12,000 car ten months after that. In just thirty months, or two and one-half years, you can drive a paid-for $12,000 car, never having made a payment, and never have to make payments again. Taking on car payments because everyone else does it does not make it smart. Will your broke relatives and friends make fun of your junk car while you do this? Sure they will, but that is a very good sign you are on
the right track.
Myth: You can get a good deal on a new car at 0 percent interest.
Truth: A new car loses 60 percent on its value in the first four years; that isn't 0 percent.
...You can't afford a new car unless you are a millionaire and can therefore afford to lose thousands of dollars, all in the name of the neat new car smell. A good used car that is less than three years old is as reliable or more reliable than a new car. A new $28,000 car will lose about $17,000 of value in the first four years you own it. That is almost $100 per week in lost value. The average millionaire drives a two-year- old car with no payments. He or she simply bought it. The average millionaire is unwilling to take the loss that a new car dishes out; that is how they became millionaires."
WOW! How crazy is that?!! I was just reading through some of my favorite quotes, and I found two that I think describe this PERFECTLY! The first is, "90% of people in our culture buy things they can't afford." That describes buying new cars perfectly! We can't afford them, yet we take out loans, pay interest, and pay TONS of money EXTRA! When we could just take a little bit extra time, and patience and get it for SO much cheaper!!!
The second quote that goes so perfectly along with this, is, "We buy things we don't need, with money we don't have, in order to impress people we don't like." Yupp. That is EXACTLY what we are doing!
Now just take a second to sit and think about this. I know that it seems like a radical and kind of wierd concept, but when you are trained to think a certain way by society, anything that does not align with that way of thinking will always seem radical and strange!
Well, that was my second Money Managing Secret for you guys! I hope you enjoyed it, and it resonated with you. Stay tuned for Secret #3!
This 36 page, interactive and educational financial e-course will teach you;
*How to Fund Your Dream Life
*My 13 Money Saving Secrets
*How to make an Emergency Fund
*How to make your very own Budget
*How to be able to Save enough Money for anything
*5 ways to Make more Money!
You can read more about, and purchase your Financial E-Course here for only $4.99!
Be sure to check out My"Creating Your Dream Life" E-book, that includes the Financial E-Course, plus 65 extra pages of how to live your dream life!!!
Peace Love and MMM