Categories: values, spending
“Car designers are just going to have to come up with an automobile that outlasts the payments.” Erma Bombeck
The great humorist, Erma Bombeck said this in jest many years ago, but…… there is a lot of truth in her humor. On the contrary, read about someone who isn’t at all concerned about how long his car lasts!
MAIN TOPIC; A Story that Knocked me Over
I took the car in for maintenance and was relaxing in the waiting room, minding my own business. Before I realized it, I was chatting with one of the auto shop workers. I mentioned that I read an article by Joe Plemon at Personal Finance by the Book recently which discussed how 200K miles was the new 100K mileage for a car. I expected a car shop worker to agree with that comment and back up my enthusiasm for the concept of keeping a car for 200K miles.
The worker at the auto shop mentioned that it didn’t really matter to him, because he traded his car in every 2 years or so because he likes to drive new cars. And when buying a car, he got a good deal because he worked at the dealership.
I couldn’t keep my mouth shut! I began lecturing him about how he would be saving lots more money if he held his cars longer.
He had the PERFECT response to me: “I like driving a new car. I don’t go on vacations, buy expensive electronics, or live extravagantly. As a matter of fact, my condo is totally paid off.”
That totally SHUT ME UP.
This man was living his values.
He wasn’t trading in his car every 2 years because he was financially ignorant, but because he valued driving a new car and was willing to sacrifice other things in his life to drive a new car!
Who am I to argue with that?
I don’t know whether he went through a goals or values analysis and deliberately thought through his whole spending process. But, he is a wonderful example of living in accord with your own principles.
In sum, he works at an auto shop (in a dealership), so he can get a good price on his cars and maintenance. He paid off his home. And he professes not to take fancy vacations or spend lavishly! Who am I to disagree with someone else’s values?
PRACTICAL APPLIATION; What does it Mean to Live in Accord with your Values?
Living well is not always obvious from the outside. Don’t make the mistake that I did and judge someone by where they work, what they do, what they own, or any outside criteria.
Think about this: What do you really want in life? What is important to you? And what are you willing to trade for living in line with your own values?
Think about which of the following is really important to you?
- Lovely vacations
- Beautiful clothing
- Spare time to fish
- An expensive TV/Cable package
- An iphone and/or an ipad
- Expensive electronics
- Eating at fancy restaurants
- Buying original art
- Kayaking
- Camping and hiking
- Going to sporting events
- Hanging out with family and friends
- Add your own interests___________
There’s no right or wrong answer. Spend your valuable time and money on what counts for you! And don’t assume you know what anyone else considers important!
ACTION STEP
Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.
- Play the Prosperity Game to find out what you REALLY want. It goes like this, day one you get one hundred virtual dollars. You must spend it all (no giving it away). On day two, double the amount and spend it all. Continue for 30 days.
- Jot down what you learned about your “wants” from this exercise. You may be surprised.
- If buying a new car is a top priority now, at least learn how to buy a car the smart way!
Photo courtesy of Cars-photos.com
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Totally agree with you on this Barb – oddly enough my father (who is a miser of the highest order), always had nice vehicles too. Nothing extremely flashy, but high quality and always brand new. That was his one indulgence.
I wonder if the time when we make “value judgments” the most is when someone else is complaining about their finances. That’s the only time I feel like telling anyone to maybe cut their lifestyle down a bit. Otherwise, if you can afford it, knock yourself out. I certainly do in many areas. You’d have to pull my precious purses from my cold dead hands.
I love it. It’s funny how much we don’t work ON our lives. We work IN them and take things as they come, but it’s hard to stop and think about things like this without reading or someone else promping it!
Thank for the link too
Barb,
I admit you hooked me with your title. And with good cause…I was pre-judging your financial senses before even reading what you had to say!
Even though I plan to drive my vehicle 200,000 miles, I agree with what you are saying in this post. A new vehicle is at the bottom of my priority list, but I can understand how it could be at the top of someone else’s.
The trouble is so many, unlike the auto shop worker, go ahead and buy what they can’t afford. And I still identify “afford” as what you can pay cash for.
@Jacq, Jaime, & Joe; Thank you all for your insightful comments, they really add a lot to the post. I love when I am proven WRONG- and it sure happened here. Of course, people probably look at our cars (the new one is a 2003 model and the old from 1998) and think we are just scrapping by. But the reality is, I DON’T LIKE TO SPEND MONEY ON A CAR. I don’t get my self worth from an expensive car. And, like Jacq mentioned, I definitely have my splurges (My husband & I travel abroad A LOT!!!!). GREAT COMMENTS, Barb
[...] How Trading in a New Car Every 2 Years Makes Good Financial Sense at Barbara Friedberg Personal Finance [...]
Great post! I think this is really important, aligning your values to what’s most important. If that auto mechanic really has all his finances in order, then purchasing a new car every two years sounds like he’s fulfilling his wants and his needs. I’m going to check out that prosperity game now. thanks for the link!
WOW! I would never had said anything, but just judged quietly (don’t think that is good either lol).
This is just another GREAT example that there are NO hard and set rules when it comes to personal finance. As long as decisions are made with purpose and some sense of logic they tend to make sense.
I really, REALLY believe there is much more money out there than you can imagine.
The media makes us believe people aren’t frugal, and waste money, but I just don’t think that’s the case.
Best, Sam
@Evan-You are so right, there a certain premises like don’t spend more money than you earn that are universal, but beyond that, it’s tough to gauge other’s behavior!
@Financial-Yes, the media frequently focuses on the troubled minority, not the successful majority. Thanks for adding to the discussion, Barb
@LittleHouse-There are so many ways to allocate one’s resources, and who are we to jukge? Thanks for the comment. Barb
So true, I used to have a client who was almost the same and I once criticized him (mistakenly) about monthly payments of ~$700 and asked why they were so high. His response, “It’s a Jaguar!”. I remember this, to this day – he had a very comfortable nest egg, his mortgage was paid off while he was still in his 40′s and had excess cash flow. I couldn’t knock him, since he had already achieved or was in the process of achieving his financial goals. Changed my perception on some things back then.
[...] Friedberg presents HOW TRADING IN A CAR EVERY 2 YEARS MAKES GOOD FINANCIAL SENSE posted at Barbara Friedberg Personal [...]
@Dan & @ RealWorld- Thank you both for taking the time to comment. It just goes to show that there is NO ONE CORRECT WAY to manage money! Best regards, Barb
Depreciation on a new car in the first year is HUGE and don’t forget the sales tax and higher insurance. If driving a new car is going to be your “must have,” better factor in some of these costs.
Ed, You do not have to sell me on this concept. This guys values are an example of “what works for one, may not be the best for another.” Thanks for bringing attention to important new car costs.
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For the price I paid for a second hand car 3 years ago and the running costs over that time period a then for it to break and be worth scrap I could have leased a brand new BMW. Puts things in perspective, as I would have also had a lot more enjoyment in my life rather than worry about breakdown costs all the time.
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