Some people may find that I sound harsh at times with my comments. I do not mean to offend anyone, I am just providing my opinion. After struggling with debt for so many years, I know firsthand that debt is a CURSE. It keeps you in bondage and you think that you can never live without debt and you will never be able to afford anything without borrowing or using a credit card.
How many college graduates are starting out life with huge credit card debt to go along with college loans and they do not realize how long it will take to pay this off if they only pay the monthly minimums.
Another pet peeve I have is car loans and car leases. When my son was in the United States Airforce he was stationed outside of Boston at Hanscomb Airforce Base and had gone out to buy a used car. He is a good negotiator and got a good deal. He was shocked to see how many of his buddies had bought new cars or trucks at $25,000 to $30,000 a pop and had signed to pay loans for 4-5 years!
The car salesmen loved these new recruits. Myth: Car payments are a way of life, you’ll always have them. No! Drive a dependable used car.
A couple of years ago, we helped our daughter buy a second hand 2002 Mercury Sable. The car had 35, 000 miles and we picked it up in late December for $8,500. My wife did the negotiations, she is much better than I am. My daughter has 65,000 miles on her vehicle at this time and it is running fine. By the way, it’s paid off and she is saving for another car.
Same way with leasing a car, even if it’s for business. Use a calculator and you will quickly see that a lease is the most expensive way to operate a vehicle.
Have you heard this: You can get a new car at zero percent interest? A new car loses over 60% of its value in the first four years, that is not 0 %.
What to do. Put money aside every month, whatever the amount and save instead of getting credit. You can find excellent bargains on used vehicles. Once you buy the vehicle, keep putting money aside monthly, just as if you where making a car payment. You are paying yourself to buy your next vehicle cash.
Try it, you’ll like it.
Jacques
CreatingWealthThatLasts
2 comments:
Hi Jacques . your suggestion of putting money aside each month .. saving for something & then purchasing it once you've saved up .. & continuing that regime.
Isn't it something we all did as children .. save our pocket money for our first bike, or in this day and age .. perhaps a computer?
Your right! We need to keep up the habit as adults.
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