I’m at a point in life when most people would be treating themselves to a nice new car. But, I decided to sell mine last week (and I don’t plan on buying another one for a while).
As we get ready to move our family to Texas this week, my wife and I decided that we can make one car work for us. She works from home and I will be working and going to school within a relatively short distance from our home. It’s not that we couldn’t afford two cars nor are we trying to deprive ourselves.
So, why did I sell my Jeep and decide to have one car for our family?
By the way, I have no problem with people who want to buy a nice new car! In fact, we just bought a 2015 Kia Optima that gets 40 mpg and is a reliable car.
To test the limits
As you become more clear about your goals and where you want to be in the future you start to cut out those things that really don’t matter to you.
Having one car may be really difficult and we may end up failing at this and buying a car in a couple of months. But, at least at that point, we will know that having a second car truly will add value to our lives.
With my car, in particular, I didn’t realize how much of a gas guzzler it was when I first bought it and the longer I had it the more I hated getting 13 mpg.
My original intent in buying the Jeep was to store equipment inside of it for my side business and I didn’t pay attention to the fuel efficiency. As life changes, you don’t need certain things.
To pay off my wife’s car
I have never had a car payment in my life. I have always paid cash for my cars. That’s not to say that everyone should do that.
My wife has always felt more comfortable with a reliable car which I understand completely now that we have a baby. But in order to have that peace of mind, you’re likely going to have to borrow money. One of our goals is to have her car paid off within three years because a car payment is a horrible way to spend your hard-earned money.
Understanding the true cost of car ownership
This really opened my eyes to how much a car is really costing you. Let’s assume person A leases a new car every few years and pays $300 a month for the luxury to do so. Over a 30 year period, this person will have had paid $108,000 in car payments with nothing to show for it. Person B decides to pay cash for their cars and saves and invests $300 a month for 30 years. Person B ends up with $592,178.48 in investments while person A has zero.
Most people won’t even save that much money from working and saving during a thirty-year working career.
The bottom line
Having one reliable car will allow us to save more towards our financial freedom. Then after a few years when our car is paid off, we can assess bringing a second car back into the family.