Rule #2 for Living Cheaply

Whether you are poor or trying to keep from being poor, Rule #2 for living cheaply applies to you.

The second (or sometimes first) largest expense to people is sitting in the garage. 

Price a new car today and you will discover that you can actually purchase a small home for what is written on that price sticker! If you’re smart, you can actually buy a home for a lot less – I paid a lot less for the simple mobile home I’m living in than on the used van I purchased several years ago!

Do you actually have enough money to buy that vehicle outright?  Regardless of the answer THINK TWICE!

That hunk of metal and plastic is NOT going to go up in value – a comic book has a greater chance of making you money than that bucket of bolts on the car lot, so if you are trying to make money, invest in comics or memorabilia of some sort, NOT a car!

It will  go down in value until it is only worth a few dollars at the recycle center. Any money you invest in a car you are literally throwing away, remember that.

Think.  Do you actually need a car, or can you suffice with public transportation? If you need one, purchase the least expensive one you can pay cash for – there is no need to spend even more money on something that is essentially a giant financial sinkhole.  If it starts and runs safely–who cares what it looks like?  Those looks won’t put gas in the tank!

By purchasing a used car for cash you avoid that big payment each and every month. You avoid having to sink even more money into full-coverage insurance on the monster as well.  Purchase the least amount of insurance you can get away with and stash the money you save in an account that gives you interest.  This is what you will use to repair or replace the car in the event of a breakdown or accident.

I have friends who assure me that their $300+ car payments pay for themselves cause they don’t have to pay out of pocket for repairs, and frankly that is nonsense!

Of all of the vehicles I have owned, I have yet to have a single vehicle cost me $3,600 in repairs for a single year!  I’ve spent a couple of hundred here and there, and rarely more than that for a year of faithful, payment-free service! Considering that my liability insurance costs me $160 every 6 months, while the average full coverage policy runs about that every  month, I consider myself ahead of the game there as well!

Yes, I’m bragging.  I’m hoping that by bragging I can bring the car payment aficionados that are reading this to their senses about how much money they are throwing away on something that is going to rust and die!

Yes, there may be people that laugh at you for driving an older car but in fact you are that one who will truly be laughing.

All the way to the bank.

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