You hopefully have many choices to consider when contemplating your response to the question, “What was the best financial move you’ve made so far?”

For me, it’s easy.

You: Haven’t made too many good financial moves, buddy?

Actually, plenty. It’s just that ,as I near completion on my manuscript of book number two, I’ve contemplated this exact question.

You: Hey, that’s cheating.

Hey, it’s my blog.

You: Point taken.

I’ve concluded my best financial move to date has been my decision to keep cars for very long periods of time.

You: How long?

I drove my first car for over seven years before it died. My second car just passed 100,000 miles this last weekend and is over nine years old.  So, here I am in my late thirties and I’m still on my second car.

You: With a piece of crap car.

To some people, perhaps–which is why having cars for a very long time is my best financial strategy – not necessarily yours.  But having no car payment during 9 of the last 14 years has allowed me to spend more in other areas of my life where I value such spending while still permitting me to save substantially for my future.

What’s been your best financial move so far?  Please comment below. Your worst financial move? Take the poll to the upper right.

The post you are now reading is my 400th post at the Beyond Paycheck to Paycheck blog.

You: Is that a lot?

It is to me.

You: Do you like blogging?

Do you like vegetables?

You: Usually, but not always.

Blogging is like eating vegetables.  Blogging today is more enjoyable than unusual, however, since, it’s my first post with the new blog re-design.  What do you think?  Please let me know in the comments field.

#      #      #

This week’s carnival of personal finance, hosted by Money Crashers, features many excellent reads including my recent post about how the First time home buyer tax credit may actually expire. Another great piece, written by Patrick at CashMoneyLife, discusses The Early Adopters Tax.  Patrick describes his decision to delay purchases, particularly those made by Apple (iPod, iPhone), and the hardware savings which result from his choices.  No doubt, early adopters, particularly those in technology, pay a steep price for buying first generation products, as manufacturer runs are short and the resulting costs passed on to consumers are high.

Doubt me?

Just think about how much your first laptop cost.  How many (significantly more powerful) laptops could buy today for the same amount of money? For me, the answer is about five.

Of course, delaying unnecessary purchases can save you money in an number of circumstances.  Several months ago, I brought my car to a free safety inspection and was told of a myriad of recommended repairs and services.  Nothing was super time sensitive but, given my intention to drive my car until it drops, it’s age (8 yrs), and current mileage (about 90K), routine maintenance is a good investment.  Nonetheless, I’ve been waiting for the right time to get the work done.  Yesterday, I received the best coupon by email I’ve ever received from the place I get most of my repairs done – 20% off so long as it’s done this week (they must have a slow period).  So I shuffled a few things around on my schedule and I’ll save a big chunk of money in the process.  Furthermore, the routine maintenance should delay the amount of time it will take before I have to, one day, swallow the pill and replace this car.  In the meantime, I’m doing everything I can keep the car in good shape at the lowest possible ownership cost.

What purchases have you delayed, but ultimately made, in which your waiting saved you some money?

Maybe it’s the part of me that remembers how excited I felt to still be awake at 12:30 AM as a teenager, but I still think Top 10 lists are fun.  From those I’ve created here, two of my favorites are:

• Top 10 Most Annoying Ways to Lose A Little Money - an article that garnered some additional suggestions (feel free to add yours)

• Top 10 Excuses For Not Saving – One of my most viewed early posts.

If you’re already living Beyond Paycheck to Paycheck, making any of the following decision is ludicrous (not that I haven’t occasionally been guilty of such behavior myself).

Others may be in a financial predicament which compels you to make some of the otherwise poor choices below.  As such, this list highlights just a few ways you currently sell yourself short by not moving Beyond Paycheck to Paycheck. What do I recommend in that case? Another top ten list, of course: The Top Ten Saving Strategies.

The Top 10 Ways to Save a Little Money While Ruining Your Life

(Or, said another way:)

Ten Ways to Be Cheap Yet Financially Irresponsible.

1.  Comparison-shopping cold medicine

If you’re sick, your significant other is sick, or your kid is sick and you need medicine, go to the store and get some medicine. Period.  That’s it. You don’t first go to the drug store, then the grocery store, and then visit drugstore.com to see who has the best price.  You buy the freakin’ medicine.  If you want to save money on OTC medicine, do so before you need the medicine.

2.  Opting out of a night out with friends

Question:  “Why spend money I don’t have on a place I didn’t choose?”

Answer:  Because you only live once.  If you like the people going out or even if you just need a change of scenery, go out.  You don’t have to order something expensive and you don’t have to agree to split the bill equally if half the group orders fillet and the other half (your half) asks for soda water with a slice of lemon.  You don’t have to spend a lot to have a good time, but you do have to leave your house every once in a while.

3.  Using a dial-up Internet connection

I’d love to explain to you why this is such a short-sighted decision, but then you’d have to wait even longer for this page to load.

4.  Not replacing old shoes or sneakers (or tennis shoes for you Midwesterners who call all “sneakers” “tennis shoes” even if they’ve never heard of Wimbledon)

Because I buy new sneakers so infrequently, I just re-learned how great new sneakers can feel.  But it wasn’t good for my feet (nor would it be for yours) to wear shoes to the point we don’t recall what an arch looks or feels like.

5.  Driving an Unsafe Car

I’m all about driving cars until they drop.  Want proof?  I’m well into my thirties and I’m still only on my second car. Ever.  I got seven years out of the first one and my current car is now over eight years old.  The no car payment strategy isn’t for the flashy.  After all, few young ladies were impressed with my red Plymouth Neon back in the day, and no one awes my Saturn sedan.  However, if I ever felt my car was no longer safe to drive, it would be gone.  I can’t imagine putting my safety behind my desire to avoid a car payment.  You shouldn’t consider it either.

6.  Not giving to the important causes in your life

We all have a soft-spot for certain missions.  Find the special causes that speak to you and give to them.  Give time but also give money.  You get back more than you put in, often in ways you don’t understand.  Withholding charity costs you far more than the check you would have written to help others.

7.  Not updating sporting equipment

Thanks to multiple ankle sprains and torn ligaments, my weak ankles require that I wear ankle braces whenever I play basketball.  I’m smart enough to take the extra ten minutes every time I play to put on the braces.  But I’m still an idiot because my ankle braces are more than four years old and were, therefore, not effective in preventing me from spraining my ankle (yet again) a few weeks ago. You might not need new gear every season, but you do have to replace your equipment periodically. Don’t be so cheap it costs you.

8.  Delaying a visit to the doctor to save the co-pay

Even if you have a high co-pay like I do, it’s not a good idea to delay seeing the doctor if you are sick or have sprained your ankle – again.  It may cost you more in the long-term, since your illness might become more serious and costly or require additional physical therapy – again.

9.    Not purchasing water before a hike

I don’t care to purchase bottled water.  (You know what Evian is spelled backwards, right?)  Nonetheless, I drink a lot of water.  When I’m home in NH, this is easily accomplished without buying a bottle. But since I don’t like filling up a thermos from a public restroom, you’ll probably see me with a bottle of water whenever I’m on the road.

But that’s because I’ve matured (at least in that regard).

Many years ago, my girlfriend and I would often go on lengthy hikes and invariably forget to bring water.  But without a container and not wanting to spend money on bottled water, we usually just went without.  But water is kind of important on a warm summer day on a long hike, even in Michigan.   Dumb – buy the water.

10.  Skipping a vacation

If you can’t afford a vacation, don’t go on that vacation. Go on a vacation you can afford. If you can’t afford any vacation-related expense, then take time off and spend it locally. If you have paid vacation time, you can afford a vacation. Find one. Life is too short.

#   #   #

What other ways have you (or other people you know) saved money while ruining, or at least damaging, their lifestyle?  Let’s grow this list.

#   #   #

If you liked this article, there are plenty more. Check out the archives to the right – I’ve been blogging for over two years.  You can also follow me on Twitter.

I realized something while eating too many sweet potatoes last week.

You:  That they need to be cooked first?

Something even more insightful:  cars are way underrated.

You: This coming from a man who in his entire life has only owned a Neon and a Saturn?  Don’t you mean that cars are overrated?

Nope. So when it occurred to me that cars were actually underrated, I was quite taken aback.

You:  Sure it’s not sweet potato # 12 talking?

Pretty sure.

You: Buy an expensive car last week and now have buyer’s remorse?

Nope.

You: Then what’s going on here?

Cars are underrated in terms of their importance to your financial well-being.  Seriously.  I believe many folks have come to believe that cars do matter financially, but most don’t genuinely understand the size of their impact to your fiscal well-being.

And when I’m talking about cars, I am – at least for today – talking about:

The Cost of Your Car – Not only does the price of the car you use impact your monthly payment, but it also affects the cost of your auto insurance and maintenance expenses.

Leasing vs. Owning – Another post for another day, but suffice it to say that with leasing you guarantee yourself non-stop monthly payments.  You never get to the promised-land of looking in your driveway and seeing your car while looking at your bills and not seeing a car payment.  Guess when it’s easier to save?

Your Car Replacement Rate – Get a new car every three years?  That means, on average, you need to pay for a new car every three years. Guess what happens if you can hold on to your car for six years?

You: You need to pay for a new car every six years?

Yup.

You: Meaning that you could expect payments to be half as much.

Or half as long, assuming you get the same car.

You: And that’s a big difference.

Even bigger than you think.  Next time you wonder why it is that someone else can afford something, look at the car they drive.  You just might be unimpressed.

You: By the car?

Yes, if you’re a car person. Of course, if you’re a car person, there’s nothing wrong with driving nicer, newer cars – provided you can afford it. But remember there are few people who can afford unlimited discretionary spending, and readers of Beyond Paycheck to Paycheck are not among them.

So maybe you should be impressed by the car; not for how it drives but for what it allows elsewhere in that person’s life: priorities.

Your thoughts on cars?  Underrated? Overrated?

Continuing on our theme of basics, I read one particularly good article at this week’s Carnival of Personal Finance: The article, written by Fiscal Zen, is 25 Savvy Tips for Car Buyers and Owners

As you know, there are always great articles at the Carnival of Personal Finance, this week including my post discussing how The world is not ending: Three days with 3,200 financial planners, but I always try to be realistic with my recommendations, so I only put out one suggested reading from that source each week.  Fiscal Zen’s post is perfect because there is something in there for anybody who has or uses a car (which is about 99% of the people I know).

You: Who are the other 1%?

My cousins, who live in NYC.  (Thanks for asking.)  But for everyone else, there’s bound to be useful information there that will save you money.  It’s the kind of stuff that makes it easier to live fiscally responsibly without being cheap. It’s basics. It’s what we all need to get back to.  A car is a great way to start the trip.

Just about two weeks after I paid over $$$ to replace the condenser on my money-sucking $aturn, recharge the AC and assorted other AC stuff I don’t understand, my wife informs me that the AC isn’t working again. While I’m highly disappointed, I’m thinking “Hey, they said there was a 12 months, 12,000 mile warranty on repairs. Since it hasn’t been 12 days or 120 miles, I should be good here.”

Wrong!

Something else broke with the AC.

Of course

This time, it’s the proverbial “crack in the line.” I have the repair guy on the line for about 20 minutes pestering him as to what else could possibly go wrong with my $aturn that is going to cost me big $$$ considering it has just under 80,000 miles on it. Quite frankly, the list is longer than I’d like. Still, with two little girls, I have to have AC and I figure if I try to trade in a car without the AC working, it’ll hurt me on the trade-in value anyway. So I fix it. Money-sucking $aturn takes another few hundred bucks.

I told the repair guy that I was paying him more a month than I’d be paying the bank on a new car loan. He didn’t argue.

I think I’ve reached my limit, but it probably depends on what comes next (the need for a second car, what type of thing goes wrong, how long it is between now and then, and so on).

# # #

What’s more annoying, expensive, and less predictable than car repair expenses?

I recently wrote of the problems my Saturn was giving me. Ironically, the car drives fine; it’s just that it keeps asking for money. Even though it’s a relatively low mileage (77K) car for its not overly advanced age (7 years), I’ve had three major ordeals since the beginning of the year:

1. Hotel $aturn invites locally-based mouse. Mouse does significant localized damage.
2. Suddenly tidal antifreeze migrates to the passenger’s side of the cabin.
3. Air conditioner stops working. It’s not too hot yet. Is this all just a test?

In a climate like New Hampshire’s you could make a decent argument that air conditioning is optional, especially when the potential repair is costly.

You: Did you make that argument?

No. I said you might be able to make the argument, but not if you have two young kids, like I do, and this is their only ride. So I just spent a tad over $700 to get the AC fixed. That’s because they found the leak and (of course!) it was in the compressor, making it the most expensive fix possible.

I did print out a competitor’s coupon and got my mechanic to honor it in advance so that I got the repair done at a reputable place at somewhat of a discount. But I still hated the expense. So it was pretty funny when I saw a WSJ column yesterday about one couple’s conversations about spending money maintaining an old car versus getting a newer (but not necessarily new) one.

My philosophy, which I stole from a auto dealer district sales manager a couple of years ago, is the following: the best car to get is the one you already own. Still, the year 2008 is pushing my faith in my $aturn. If I’m done with major car expenses for several months let alone a few more years, all is good. But if the transmission goes in August, I might lose it. And $aturn might have to go back to its home planet.

When do you make the move to dump the existing car for a newer one?

I have a car. Its name is $aturn. I bought it new in 2001. I’m not sure I’d buy new today, but I’ve been a fan of buying a car and then driving it until it drops. I think it’s the most economical way to go. Once I’ve finished paying it off, I enjoy years of no car payments. It makes saving much easier when you quite suddenly have a $348.50 monthly bill disappear.

I bought a car seven years ago because my first car, the ultra-sleek babe-picker-upper extraordinaire tough-hauling Plymouth Neon had died. With a bit less than 100,000 miles, it needed $2,500 of repair work. Blue book value (assuming it was fixed) was about $1,500. You don’t need to be a CPA to figure out that fixing the car was a losing investment. So I didn’t make it—and neither did little red neon. I was able to get $1,250 for the car at the $aturn dealer, (not bad given it was actually worth negative by my calculations) and bought a $aturn.

I figured this nearly $20,000 car would be more durable (less plastic) and I could drive it to, perhaps, 150,000 miles or more without recurring major expenses. As a very low mileage driver, the car will reach its seventh birthday this summer with only about 80,000 miles on it. I think I should be enjoying years of no payments on this car.

But I’m not.

And that’s annoying.

Mr. $aturn keeps asking for money. Since January 1, here’s have been its requests:

Hotel $aturn

Despite the fact that the car is garaged, the rather hospitable $aturn managed to welcome—no, invite—a mouse to live with it. Not only was the rent-free housing not reported as imputed income by the mouse (I hate freeloading taxpayers), but the mouse did some significant damage. Turns out he wasn’t inside the car, he opted for the blower motor as his new domicile. Unfortunately (and somewhat ironically) having a brain the size of a mouse proved to be the downfall for this little guy.

Turns out a blower motor is not such a safe place for anything that wants to live.

My $aturn was bummed too, since he lost his tenant. The mouse’s death caused other problems as well. Most notably, on January 14, there was an enormous noise when I turned the heat on. Why do I remember the exact date? Because my daughter was born on January 13 and now $arturn had only a “no heat” option for me to pick her up in. Remember, this in New Hamphshire. In January. Deciding not to invite correspondence, let alone a personal visit, from Child’s Services – I borrowed a car. Later that week, I said goodbye to $500.

That’s Not Fruit Punch

In late April, my wife noticed that the floor in the passenger seat was wet. I told her it was rain, which I honestly believed, since it was pouring that day. Unfortunately, it turned out, upon closer examination, that the liquid on the floor was bright pink. I remember learning about the dangers of acid rain from 8th grade earth science, but I was pretty sure this was a more acute problem. Further research showed there had been a major leak of antifreeze. Nice. I didn’t want that $435 anyway.

Live Warm or Die

It hasn’t been that warm yet here in New Hampshire, but last week we went south—to Massachusetts. With all four of us in the car on a rather sunny day, it made sense to put the AC on low. You guessed it. AC provided no comfort. Or cool air.

Thank you Mr. $aturn for withholding your AC. Fortunately, I have a friend who is as handy as I am not. He looked at it, since, apparently there might have been a way for him to bring up the charge of the AC and add Freon. Sounded good to me. Unfortunately, and of course, the AC charge is as dead as a doornail (or a mouse in a blower motor for that matter).

If it were just me, I’d possibly consider skipping the AC fix, but with a wife and two little girls, that’s just not an option. Besides, if I trade in the car, I know from previous experience, they’ll check the AC. So even if I don’t pay to get it fixed, it will cost me on trade-in value. How much will fixing the AC cost me this weekend? I don’t know, but if I had to guess: about $500.

So here I am with a seven-year-old low-mileage car that has cost me about $1,500 in just a few months. From this point, $aturn could give me a few years of good and very little non-routine maintenance expenses. Or, it seems, it could ask for another $500 every few months endlessly.

I’m going to get the AC fixed because, like I said, I’ll pay for it either way. But the next major repair, I’m not so sure. I’d like to get another few years out of $aturn. But it’s testing my patience and my steadfastness that this is a good financial move.

What do you think?

“personal finance” “financial education”