How to Afford a New Car

2011-07-21T21:16:00.001-05:00

Start saving the day you buy the current one. Putting $50/ month into an account with a 3% interest rate for 6 years will give you $4,000 towards the next car.
Baby the car that you have. Every little problem that didn't mean a thing while you were driving it will deduct money from the trade in value. Always preform routine maintenance, always wash and wax your car, vacuum and Armor-All the inside of your car, and fix all small problems before they become big problems.

All of these things will actually help you go longer between car purchases, which gives you more time to save up the money required for the new one.

Buy Pre-Owned. A vehicle that is one year old will generally have all of the same features that this year's model has, but will cost thousands of dollars less.

If possible, buy from a company that has the shop certify the vehicle through a standardized process. This may cost a little extra, but the knowledge that your new car is in pristine condition will be worth it.

Try to get free maintenance thrown in as a condition of purchase. Even if it is only for 1 year, you know that you have no extra costs for that time and that the maintenance will be performed correctly.
Never buy the extended warranty offered by the dealership. This will always cost much more than an after-market warranty, and the after-market will cover all of the same things.
Ride a bike. Every trip that can be made within a 2 mile radius (without riding on the freeway!) should be done on a bike. Keep track of the trips that you make every week, and put the amount of money saved in gas into your new car fund.

This also has the added benefits of 1.) Helping you get into better shape, 2.) Helping the environment, 3.) Allowing you to get a better sense of community and meet new people (I'm going back to college and majoring in urban geography, so stuff like this is important to me).
This could also be replaced by using public transportation.

How to Budget on a Budget!

2011-07-15T17:14:00.002-05:00

The only way that you will ever save money, whether doing so to pay off debt, start a business or for any other reason, is to get good at budgeting. Now, you don't have to budget down to the penny, but the more you do, the more you'll save.

My wife Jessi has always been good at sitting down at the beginning of the month and deciding when each bill can be paid, when we each get a paycheck, etc., but we have both been lazy when it comes to the small stuff. We make sure we budget for the utilities bill and cable, but we will then go out to eat and spend $35. Now, that doesn't happen all the time, but it happens enough for me to know that it affects our budget.

Another problem that we run into sometimes is one that a lot of people have. We make the budget for the month, plan on saving a certain amount of money, and then we blow all our money a little at a time without realizing it. Most of this money gets spent on the things that you never think to include in the budget - soft drinks, candy bars, magazines, etc.

I have recently convinced my wife that we need to start planning for all of this, as well. I have wanted to do this for over a year, but without the help of your spouse you will never be able to keep track of things like this (well, you might. But I can't ). We are going out of town this weekend for our friend's birthday, so we decided that this would be a good chance to work on this.

We have decided that we have $109 to spend this weekend (the amount of cash that we have between the two of us). We will need money for gas to get there and back, money to eat out tonight and tomorrow night, money to go out to the bar, and money to buy drinks. We do not need to get a place to stay since we can stay at Jessi's brother's house for free.

Here's how it all works out:

Gas - $60 - $40 there, $20 back
Drinks - $4 - one for each trip; I have a medical condition, so need to drink constantly to stay hydrated
Eating Out - $16 - $7 for each meal, plus $1 for tax; we will be eating at a Mexican restaurant so can fill up on chips and salsa, and we will split an appetizer
Going Out - $10 - $5 per person to get in
Alcohol - $0 - We already have a bottle of vodka, so we're bringing it with us
Total = $90
Hint - Bringing alcohol is never a good thing to do this if the bottle is already open. Even if you aren't drinking, you can still get an extremely expensive ticket for open container.

We are also bringing lemonade mix and an empty gallon jug with us. We will add water to the jug and mix the lemonade in so that we have something to drink the alcohol with. This way, whoever is not the designated driver can drink before going out, saving us from having to buy extremely over priced drinks at the bar. It is never a good idea to buy drinks at a bar. The profit margin on a typical bottle in a typical bar is 800%. If you pay $4.75 for a drink, you will wind up paying the bar $125.86 for a bottle ($4.75*26.5 shoots/ bottle). You can get the same amount of the same brand for $7-$50 at your local liquor store.

This should leave us with $19 left to spend however we want. Of course, we won't spend this money if we don't have to. I never be able to start my business if I keep blowing money on small things that we don't need. Wait, that sounds familiar...

Stop Spending So Damn Much

How to Afford a New Car

How to Budget on a Budget!