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Things to Think About Before Buying a New Car

Things to Think About Before Buying a New Car

In my 13 years of licensed driving, I’ve been lucky enough to only have gone through two cars. I’ve watched many friends go through one automobile after another for a variety of reasons: the cost caught up with them, it didn’t fit their needs, or it broke down beyond repair. A lot of the time, these issues could have easily been avoided if they had taken the process of buying a car a little more seriously.

I don’t consider myself a “car guy” by any stretch, but because of this I tend to go overboard when researching a new vehicle. When I invest my hard-earned money into a new car, I want it to last me a while. Knowing this, I’ve always taken the following into consideration:

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Purpose

What are you going to be using your new car for? Will you be the only one using it? Do you have children who constantly need a ride to events, parties, and practices? Will you need to drive long distances for work? Do you need to transport tools and other equipment for your job or hobbies? These are all questions you should ask yourself before you buy a new car, truck, or van, rather than going for what feels right at the time. Think about what you’ll be doing with your new automobile, and you’ll avoid having to give it away for much less than it’s worth when you realize it doesn’t fit with your lifestyle.

Need it or want it?

Along with figuring out why you’re in the market for a new car, think about whether you absolutely need one, or if you’re simply looking for an upgrade. On the one hand, if your current car is on its way out, you need to lower your standards at least a little bit when looking for a replacement. You don’t want to end up stranded with no way of getting to work, so you unfortunately don’t have the luxury of “shopping around.” However, you still don’t want to settle for “what works for now,” as it’ll likely end up costing you in the long run. On the other hand, just because you’re in a position to buy a new car because you want one doesn’t necessarily mean you should hold out for whatever is considered the absolute top of the line. In either case, make sure you make an informed decision and avoid splurging on the first thing on four wheels you see in the lot.

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Monthly cost

It shouldn’t come as a shocker to you that your car makes up a large part of your monthly expenses. Whether you’re buying or leasing a new car, don’t let a low monthly payment blind you to the hidden costs that come with an automobile. You’ll have to pay interest on your loans and monthly insurance costs, not to mention gas and other maintenance fees over the years. Failure to take all of these into consideration will almost certainly result in you giving your car away for less than its worth, while opting for something “a little more manageable.”

Safety features

This should actually be the first thing you take into consideration when buying a new car. Automobiles come with more safety features than ever before nowadays, so there really is no excuse for buying a car that you don’t feel safe driving. Seatbelts and airbags are commonplace nowadays, and the newer features – rear-view cameras, alert systems – are becoming more and more prevalent as well. Even with these accommodations, you should still check out the crash rating for your potential new automobile. While ignoring the other items on this list might set you back monetarily, ignoring the safety rating of your car could cost you much more.

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Add-ons

In addition to all the new safety features new cars come with, they also include a bunch of other extras that make one model more appealing than another. Bluetooth, Wi-Fi hotspots, iPhone connectors… all of this seems really awesome – and, well, it kind of is. However, is “awesome” worth the extra cost? Make sure you analyze the difference between the base price and the price for an all-included model, and think about whether or not you actually need your text messages to be read aloud to you on your ten minute drive home from the store. Then again, like I said: If you can afford it, and you’ve earned it, then go for it!

Featured photo credit: 2014 Proton Perdana 2.4P / Manoj Prasad via farm4.staticflickr.com

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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