Do you live within your means?

  • Thread starter Thread starter JLCecilia
  • Start date Start date
Status
Not open for further replies.
Using your own definition, I would have to say no. I have both a car payment and a land payment that I had to take loans out for. However, I don’t have any other debt. I am determined that when my car is paid off (1 year to go!) that I am keeping it and will begin funneling the former car payment into a savings account so that if I do need to do repairs I can pay for them out of pocket. I am working hard to be more frugal and to put more money into savings for when the bad things happen. I should be debt free in 3 years- both the car and the land should be paid off then.
 
TK421 said:
Credit cards make you money if you use them the way you would a debit card.

I strongly suspect JLCecilia’s husband isn’t a good candidate for that program.

Economical new cars aren’t necessarily a bad investment if you use them for X number of years, and then can still sell them at a decent price to buy another car.

**…if you actually have the money.

Very few people have $20k in cash just lying around that isn’t earmarked for something else important: retirement, emergency savings, college savings, etc.**

**If you do, knock yourself out!

But most people won’t reach that point with kids still at home. **

The downside of old used car is the investment you’re making in car repairs, plus for gas mileage purposes, you’re better off with a 21st century car than an older one.
For a 4-door car, you ought to be getting over 30 miles to the gallon on the highway.
Click to expand...
We’re 15 years into the 21st century right now. There are lots of used cars available that are under 15 years old.

Our first sedan was around $11k, 3 years old, and 55,000 miles. Our “new” minivan was under $12k, 3 years old, and 60,000 miles. It’s a long ways from either 55,000 or 60,000 to 100,000.

I try to budget around $80 a month for repairs and that number has worked very well for us for two cars. The older car (11 years old) has a “do not resuscitate” order on it and we would have to think hard before doing another $500 repair, but we do minor stuff for it and it keeps running. It’s only at 119,000 miles, but we aren’t big mileage people. It bailed us out beautifully a week ago when we were having battery trouble with the newer minivan.
 
This is just a quick “me too”. I haven’t read all the comments.

“Me too”. I notice my facebook friends and family who have semi-annual vacations. Some seem to have an annual expensive vacation (eg. overseas, or a tropical resort), and, in addition, an annual cheaper vacation, (eg. to a camping site, or with family). I sometimes feel that the fb pics are more than “Hope you like this pic of Paris”, but rather “Haven’t we made it!”.

Fortunately my children have all left home so I don’t get much pressure to keep up with the big vacationers. Not “much” that is, but I still get the occasional query about why I can’t take them for an overseas skiing holiday, like some of our relatives do.
 
AKDee said:
Using your own definition, I would have to say no. I have both a car payment and a land payment that I had to take loans out for. However, I don’t have any other debt. I am determined that when my car is paid off (1 year to go!) that I am keeping it and will begin funneling the former car payment into a savings account so that if I do need to do repairs I can pay for them out of pocket. I am working hard to be more frugal and to put more money into savings for when the bad things happen. I should be debt free in 3 years- both the car and the land should be paid off then.
Click to expand...
If you need transportation, buying a car on time is usually more economical than a lease.

If the fixed expense of a car payment is something your finances can accommodate, there is no reason not to buy a car on time. It costs money, yes, but it allows you to maintain more liquid assets. This can be the most prudent choice.

We had car payments and a mortgage at one time. Now we have neither. It was more economical than trying to rent until we had enough money to pay cash. We have even bought a car on time when we had the cash to buy it outright, because the rate was so low that it penciled out. I know a fellow who bought a car on time when he had the cash to buy it because taking six months to pay for the car gave him the credit rating he needed for a better mortgage. Handling your money so as to make the bankers want to give you better deals does pay off.

Student loans are the same way. Sometimes there is such a favorable return on investment that it would be financially foolish not to invest in the education. Sometimes, the education is an investment in quality of life or capacity to fulfill a vocation, even if it does not “pencil out.” An example would be getting a teaching degree instead of pursuing a salaried position that doesn’t require a college degree, a job that would pay more than teaching would pay over one’s lifetime, when student loan costs are taken into account.
 
I can understand not wanting to take on debt for car payments, but it depends on what kind of shape the old car is in. I prefer to pay cash for most everything, and I usually drive my cars until they die, but at some point a car becomes a money pit and needs to be retired.
 
Yes. Although my means have expanded (as yours probably will) over the years. I married a woman who was very good at separating the ‘wants’ from the ‘needs’. The ‘must haves’ from the ‘nice to haves’ and prioritize the budget accordingly. Bought less house than we could afford because she didn’t want to be house poor. Wanted flex in case employment changed, or situations arose.

I’m going to take this from a different perspective-

What is the requirement that is the driver to purchasing another car? What need is it supposed to fulfill? You’ve mentioned buying a car without stating why an additional car is required. Without answering that question, one can’t assess whether this particular car is appropriate to filling the need. Some examples:
  • When are kids were small and involved in groups, my wife often was the carpool driver and even driving a mini-van with 7 seats ran out of space. Given that she still wanted our kids participating, our requirement was to have at least two more seats (other solutions, like more parents driving were unworkable). We bought a new 2002 Expedition at the time, bottom of the line had three bench seats, for 9 total, unit had been sitting on the lot for awhile. Haggled and got a very good deal, less than used Expeditions we’d looked at (very few bottom of the line having the 8 seats- folks wanted more features).
  • Replaced my 88 F150 because the wife was tired of being unable to fit the whole family in it. If her car was out of commission, we were stuck. I’d had it a looooooong time- no AC, stick shift, manual doors/windows, rubber floor mats but dirt cheap new. So- found a 5 at this price ad for a crew cab, ~4K cheaper than used trucks with 10K+ miles. Requirement was a daily driver for me, preferably a pickup that would seat the whole family.
  • Needed a tow vehicle. Ended up buying a 2006 Dodge Ram diesel, again been sitting on the lot for a while because it was manual transmission, manual doors/windows (a Highway Patrolman once found that hysterical). Requirement to reliably and safely tow a trailer up and down fairly high passes drove the decision.
  • More recently, I have a kid in his senior year at high school who wants to go to college ~800 miles away due to a particular program. His sister goes to college about 40 miles away, lived in the dorms this year and plans on living at home and commuting in the upcoming year-- she was planning on buying a car- but I want to get one for my son to drive at college vice him buying some used pile that I’ll worry about. So, requirement was a reliable car that will last him through college, but if I get it now my daughter can drive to college this year while she saves more money to buy a car herself. Preferably high gas mileage that I’ll use as a commuter when the kids are done with it. I live in one of the highest cost areas for gasoline in the US. So- found a new bottom of the line 2015 Hyndai Elantra compact (sub-compacts are a little too small for Dad to want his kids driving) for 14,700. Good gas mileage, 5 year bumper to bumper warranty, 10 year powertrain, 5 years road side assistance – nicely matching my kid getting through college, better road side coverage than AAA minimizing the stress/worry on me.
So, I think prior to deciding to buy this particular car-- you and your husband identify the requirement you need to meet that you currently can’t fulfill with the vehicles you have. (Worst car I ever owned was the car I bought out of emotion. Used 69 Mustang Fastback with a 390). I don’t grow to like my cars now until they’ve hit 100K and been reliable throughout- they are just machines to fulfill a purpose.

Oh… a BTW… as I started this with, wife and I were always on the same page financially and she always settled for what met our needs. When my older daughter got her license, she was a right little disrespectful pill. Wife had been pushing to buy a small used car for her to drive vice the Expedition she’d learned in and gotten her license with. I just hated the idea of, given daughter’s constant disrespect, buying something she’d look at as ‘her’ car. So, I proposed instead we buy the wife a car, and let the kid continue driving the Expedition. My wife asked, ‘Would you consider a convertible?’ * I said sure, you’ve driven ‘Mom’ cars (mini-vans, SUV) for practically the whole marriage- your chance to get something you actually WANT to drive. Fond memories of her test driving various cars, coming back from driving a Mitsubishi Eclipse Turbo with a smile on her face and an excited “That was sweeeeeet!!” Wife ended up leaving me a few years later, but I just can’t regret buying that car, she truly enjoyed driving it. Hopefully as you get older there will be a bit more flex in the budget and a chance to get something for more than just practical reasons.*
 
A perhaps unrelated but small note that I was thinking of this morning:

This may not be helpful if money tends to burn up in your DH’s pocket, but you mentioned earlier in the thread that your tax refund is your big savings every year. If that refund is substantial, you might see if either you or DH qualifies for more exemptions that would prevent so many taxes being taken out from your paychecks. Your refund would be smaller, but then you would be getting that money earlier and your month to month picture would probably improve. We did this a while ago and it improved our financial situation drastically. We still get a refund, although it’s smaller than before, and we really can put it toward things that aren’t necessities because we’re not playing catch up from the months prior.

I also do our budget month to month, but because my DH is paid biweekly we have two months per year where he is paid three times instead of two. Since I already plan out every month for our necessities being covered by two pays, that third pay is great to put away for “sink fund” expenses (Christmas, home repairs, car, etc.) or to put toward our debt. So if either you or your DH are paid biweekly, that might be something to consider as far as budget goes.
 
pensmama87 - I have seriously considered the whole deductions thing and taking home more pay, but, I am a spender as well. I know myself that I will not put the extra money where it needs to go. Now, granted, moving it out of savings every week to supplement our income isn’t really any different than the method you’ve suggested, I just feel more secure knowing it’s there. Initially when DH took the paycut, I was still making Christmas Club payments, but having to move money out of our regular savings to do so and it didn’t make any sense, so I just earmark part of our regular savings for Christmas. CC payments were really my only means of saving and I’d do it again in a heartbeat if we ever get to the point that there’s actual “extra” money in our income.

DH gets paid weekly, so, some months he gets 5 paychecks. Twice a year, I get paid 3 times and the third check doesn’t have insurance taken out, so it’s a little larger. That’s always nice.

Welp, the car payment is more than I wanted. Prior to going in, I had considered even paying the sales tax just to keep the payment down, but it was twice as much as I figured. Granted, we have the money in savings to pay it, that money has already been earmarked to pay the sitter for the rest of the summer, for Christmas, and to supplement our income and get us by till next year’s tax return. I was really cramping DH’s style in front of his friend and “giving us away” that we really couldn’t afford this, but he was just caught up in the whirlwind and not thinking straight. He completely forgot about our budget and I wasn’t willing to stifle us for the next 6 months over a difference of $20 a month.

All the way home he was saying that this was a load off of his back and he was glad to be rid of our old junker. Okay, so I see this purchase as an enormous burden, but maybe DH’s willing to put his big boy pants on a kill some OT to accomodate this. I’ll just have to be sure and do my part to put the money where it needs to go. Oh sigh.

What’s killing me is that his parents are coming over tonight to some see the stupid thing. We actually drove the 60-mile round-trip to “visit” the car prior to purchasing it and now people are coming over to see it. Eye-roll.
 
My wife and I are completely debt free. The only thing we ever had was our house and student loans but even that is paid off now. I can tell you one of the disadvantages of living within your means, saving, and basically being the “ant” in “The Ant and the Grasshopper”, is that you might be asked or expected to take care of the “grasshoppers”. It’s easier to say no when you’ve got the money tied up in other things. 🙂
 
JLCecilia said:
pensmama87 - I have seriously considered the whole deductions thing and taking home more pay, but, I am a spender as well. I know myself that I will not put the extra money where it needs to go. Now, granted, moving it out of savings every week to supplement our income isn’t really any different than the method you’ve suggested, I just feel more secure knowing it’s there. Initially when DH took the paycut, I was still making Christmas Club payments, but having to move money out of our regular savings to do so and it didn’t make any sense, so I just earmark part of our regular savings for Christmas. CC payments were really my only means of saving and I’d do it again in a heartbeat if we ever get to the point that there’s actual “extra” money in our income.

DH gets paid weekly, so, some months he gets 5 paychecks. Twice a year, I get paid 3 times and the third check doesn’t have insurance taken out, so it’s a little larger. That’s always nice.

Welp, the car payment is more than I wanted. Prior to going in, I had considered even paying the sales tax just to keep the payment down, but it was twice as much as I figured. Granted, we have the money in savings to pay it, that money has already been earmarked to pay the sitter for the rest of the summer, for Christmas, and to supplement our income and get us by till next year’s tax return. I was really cramping DH’s style in front of his friend and “giving us away” that we really couldn’t afford this, but he was just caught up in the whirlwind and not thinking straight. He completely forgot about our budget and I wasn’t willing to stifle us for the next 6 months over a difference of $20 a month.

All the way home he was saying that this was a load off of his back and he was glad to be rid of our old junker. Okay, so I see this purchase as an enormous burden, but maybe DH’s willing to put his big boy pants on a kill some OT to accomodate this. I’ll just have to be sure and do my part to put the money where it needs to go. Oh sigh.

What’s killing me is that his parents are coming over tonight to some see the stupid thing. We actually drove the 60-mile round-trip to “visit” the car prior to purchasing it and now people are coming over to see it. Eye-roll.
Click to expand...
So, is this a second car? (I’m really hoping it’s not your only car.)

Bear in mind, this thing is going to need to be repaired every so often, too.
 
AKDee said:
Using your own definition, I would have to say no. I have both a car payment and a land payment that I had to take loans out for.
Click to expand...
Us either.

We have a mortgage.

And when we bought my car, it had a loan. But it was that, or walk everywhere. Since the nearest grocery store is 7 miles away, it seemed like a good idea to get me a car.
 
Burt Macklin - our ability to be generous is an area of concern for me. I’m worried that people will see our “new” car and then wonder why I’m so miserly when it comes to fundraisers and all of that. I was looking through my closet this morning and realizing that something like a car purchase could really be a slippery slope for some people. Now all of a sudden I need to wear nicer clothes to “match” my nice new car. I need to throw money around at every PTO function to “match” the image that my new car appears to portray.
 
JLCecilia, can you get your husband to go to Financial Peace University with you?

I think it’s pretty urgent, because there’s going to be a next thing really soon.

The FPU at the Baptist church where I did it had childcare (because it was a Wednesday night).

You guys are just too far apart philosophically on the finances.
 
Xantippe - I actually went to FPU at our church the one year that it was offered. I know the teaching couple and they would be happy to let me borrow the DVDs for home. I have the whole packet, but only on audio CD and I’m even missing one or two of those.

You are right, there will always be a “next thing.” I wish there had been a way to have an actual discussion with DH about all of this, but once he got those pics and loaded us all up to go see the car, I knew the decision had been made and there was no talking him out of it. So I will continue to pray to St. Joseph to give DH the courage to say no, just not to me 😉

It will take a lot of work to get him to admit that he was acting emotionally and help him to develop a method of talking himself down or turning to me for help to ground him.
 
JLCecilia said:
Burt Macklin - our ability to be generous is an area of concern for me. I’m worried that people will see our “new” car and then wonder why I’m so miserly when it comes to fundraisers and all of that. I was looking through my closet this morning and realizing that something like a car purchase could really be a slippery slope for some people. Now all of a sudden I need to wear nicer clothes to “match” my nice new car. I need to throw money around at every PTO function to “match” the image that my new car appears to portray.
Click to expand...
You’re financing an 8 year old car that you need for transportation. It isn’t as if you spent cash on a Maserati 🙂 I doubt anybody sees that and thinks you’re loaded.

But you’re right that keeping up with the Jonses is a major reason people spend more than they should. Just be happy with what you have and realize that many people who seem wealthy are financing the illusion with easy credit.
 
JLCecilia said:
Burt Macklin - our ability to be generous is an area of concern for me. I’m worried that people will see our “new” car and then wonder why I’m so miserly when it comes to fundraisers and all of that. I was looking through my closet this morning and realizing that something like a car purchase could really be a slippery slope for some people. Now all of a sudden I need to wear nicer clothes to “match” my nice new car. I need to throw money around at every PTO function to “match” the image that my new car appears to portray.
Click to expand...
Don’t worry about what other people think. You don’t need to do anything different, you don’t need to portray an ‘image’. You are still the same people. You know what you can or can’t afford. There is some merit to getting rid of an unreliable car (traded in a mini-van partly for that reason, it had blown the motor twice and the transmission once while under warranty, and was showing some indications the problems might be recurring) for a more reliable one. Trying to live up to an image or keep up with what we perceive to be other folks opinions can lead to some very poor financial decisions.
 
JLCecilia said:
Burt Macklin - our ability to be generous is an area of concern for me. I’m worried that people will see our “new” car and then wonder why I’m so miserly when it comes to fundraisers and all of that. I was looking through my closet this morning and realizing that something like a car purchase could really be a slippery slope for some people. Now all of a sudden I need to wear nicer clothes to “match” my nice new car. I need to throw money around at every PTO function to “match” the image that my new car appears to portray.
Click to expand...
I am sorry, but it really sounds like you are blowing this way, way out of proportion.

Like Burt Macklin said, it isn’t as though you bought a very expensive, brand new car. 🤷

And even if you had, why would think that everyone will look at you in a different way?

I wonder if this is the pride, that you mentioned in the first post, that is talking.
 
JLCecilia said:
Xantippe - I actually went to FPU at our church the one year that it was offered. I know the teaching couple and they would be happy to let me borrow the DVDs for home. I have the whole packet, but only on audio CD and I’m even missing one or two of those.

**Once you do FPU, you are a lifetime household member. You can go through as many times as you like.

I’m not worried about you–it’s your husband that needs to go with you. **

You are right, there will always be a “next thing.” I wish there had been a way to have an actual discussion with DH about all of this, but once he got those pics and loaded us all up to go see the car, I knew the decision had been made and there was no talking him out of it. So I will continue to pray to St. Joseph to give DH the courage to say no, just not to me 😉

**Bummer.

Is he participating in the monthly budgeting process with you?
**

It will take a lot of work to get him to admit that he was acting emotionally and help him to develop a method of talking himself down or turning to me for help to ground him.
Click to expand...
Get him to FPU as soon as you can manage it.
 
JLCecilia said:
Burt Macklin - our ability to be generous is an area of concern for me. I’m worried that people will see our “new” car and then wonder why I’m so miserly when it comes to fundraisers and all of that. I was looking through my closet this morning and realizing that something like a car purchase could really be a slippery slope for some people. Now all of a sudden I need to wear nicer clothes to “match” my nice new car. I need to throw money around at every PTO function to “match” the image that my new car appears to portray.
Click to expand...
Nah!

Not at all.

Just don’t let this happen again.
 
Status
Not open for further replies.
Back
Top