First Real Job...No Idea How to Save

[disneysteve]

If your current car exploded or was totalled in a accident, what would you do? Would you buy a nice used car in the 6000 dollar range or would you go and buy your 24K Volkswagen?

I'd be screwed.

But you didn't answer the question. If that happened and you had to go out this week for a replacement car, how much would you be looking to spend?

[Whitechapel]

But you didn't answer the question. If that happened and you had to go out this week for a replacement car, how much would you be looking to spend?

I honestly don't know. I have no money.

[disneysteve]

I honestly don't know. I have no money.

That's the perfect answer. The "wrong" answer would be, "I'd go out and buy a new car and take a humongous loan with a crazy high interest rate."

[bjl584]

I honestly don't know. I have no money.

Well since you have no money, you would be forced to finance if your current car was totaled.

Just don't fall into the trap of ignoring the TOTAL cost of things like cars, computers, video games, etc. Don't get into the mindset that if the monthly payment looks manageable, then I must be able to afford it.

Here is something to think about. Did you know that Volkswagens are typically more to insure than a similar sedan? Do you know that maintance and repais on a VW is more than on something like a Honda or Toyota? Again, total cost of ownership must be paid attention to. Not only how much does it cost to buy it, but how much it will cost to keep it operational. This mindset must be applied to pretty much everything that you do.

So if your car needed replaced you would be forced into something for around 6500 or so according to Steve's calculations. That's not glamorous at all. It actually approaches beater status. But that is the kinds of sacrifices that you will have to make on the road to getting your financial house in order.

[disneysteve]

you would be forced into something for around 6500 or so according to Steve's calculations. That's not glamorous at all. It actually approaches beater status.

Not at all. Both of our cars are only worth about $3,000-4,000 right now and I wouldn't call either one a beater. So using that as a guide, I think $6,500 could get you something just fine. Maybe not something you'd drive for 10 years but certainly 3-5 years.

[bjl584]

Not at all. Both of our cars are only worth about $3,000-4,000 right now and I wouldn't call either one a beater. So using that as a guide, I think $6,500 could get you something just fine. Maybe not something you'd drive for 10 years but certainly 3-5 years.

OK. now that I think about it, my last car was sold for $4000 and it still had a lot of life left in it.

But my point was to not fall into the trap of going and buying a brand new $24,000 car just because:

1) I feel entitled to it
2) All my friends and coworkers have nice things
3) I can afford the monthly payment

[disneysteve]

OK. now that I think about it, my last car was sold for $4000 and it still had a lot of life left in it.

But my point was to not fall into the trap of going and buying a brand new $24,000 car just because:

1) I feel entitled to it
2) All my friends and coworkers have nice things
3) I can afford the monthly payment

Totally agree!

I'm a physician. When I used to work in the hospital, I couldn't help but notice my car was the cheapest in the doctors' parking lot. My Camry was surrounded by Lexus, Infiniti, BMW, Mercedes, etc. Did I care? Not a bit. I knew that I was doing what was best for me and my family. I knew that my car was paid off and most of those were probably leased. I knew that I was saving a nice percentage of my income and most of those guys probably weren't. I've been at my current job for over 11 years and I am the only person in the practice still driving the same car as when I started here. Everyone else is on at least their 3rd car in that time frame. Guess who is the most financially secure?

I think homes and cars are what bury most people.

[Whitechapel]

Well since you have no money, you would be forced to finance if your current car was totaled.

Just don't fall into the trap of ignoring the TOTAL cost of things like cars, computers, video games, etc. Don't get into the mindset that if the monthly payment looks manageable, then I must be able to afford it.

I wont. Those are usually things I know in advance and plan for. Like I said, I have a Xbox 360 which has Xbox Live, and my computer, which I play World of Wacraft on. My XBL membership is paid for the rest of the year and into March of next, so that's no worries. WoW is paid for until the end of the month, then it's 15 a month. My friends are all slowly coming back to WoW, so it's getting fun again and is worth the 15.

Here is something to think about. Did you know that Volkswagens are typically more to insure than a similar sedan? Do you know that maintance and repais on a VW is more than on something like a Honda or Toyota? Again, total cost of ownership must be paid attention to. Not only how much does it cost to buy it, but how much it will cost to keep it operational. This mindset must be applied to pretty much everything that you do.

I did not think of this. I'm only saying a Passat because 1) the price and 2) the gas mileage. I literally have not done any indepth research on what I want, I'm just settling on a Passat for now because I like what I've seen and the price isn't too horrible. I want a car with good gas mileage, something much bigger than my Cavalier, and something that looks a little nice. This isn't even a priority 1, just something I wanted to begin thinking about so down the road when I can afford it, I'll get exactly what I want.

[disneysteve]

My XBL membership is paid for
WoW is paid for until the end of the month, then it's 15 a month.
is worth the 15.

You are spending $15/month to play a video game plus whatever you spent for XBL at the same time that you are coming here seeking help to clean up your finances, make ends meet and get out of debt. Do you see the problem here?

$15/month is not worth it. You can't afford it right now. It doesn't matter if you enjoy it. It doesn't matter if all of your friends have it. This is a good example of the kind of thing you need to change going forward.

As for the car, don't let your self be fooled into thinking that you need to spend a certain amount of money to get a car with good mileage. Plenty of cars way cheaper than the one you mentioned get good mileage. In fact, in the long run, it might be cheaper to get a car with worse mileage but at a much lower price. What you save on the car purchase could more than make up for the extra you'll spend on gas. Gas mileage is not nearly as big a deal as people often make it out to be.

[bjl584]

I agree with Steve. Something isn't quite clicking. Unfortunately now isn't the time for luxuries. They will have to wait. You don't have to live like a hermit forever with an old book to read by candlelight for the rest of your life, but for now you may need to take some drastic actions to get back on track.

[graceful]

Just don't fall into the trap of ignoring the TOTAL cost of things like cars, computers, video games, etc. Don't get into the mindset that if the monthly payment looks manageable, then I must be able to afford it.

Here is something to think about. Did you know that Volkswagens are typically more to insure than a similar sedan? Do you know that maintance and repais on a VW is more than on something like a Honda or Toyota? Again, total cost of ownership must be paid attention to. Not only how much does it cost to buy it, but how much it will cost to keep it operational. This mindset must be applied to pretty much everything that you do.

I did not think of this. I'm only saying a Passat because 1) the price and 2) the gas mileage. I literally have not done any indepth research on what I want, I'm just settling on a Passat for now because I like what I've seen and the price isn't too horrible. I want a car with good gas mileage, something much bigger than my Cavalier, and something that looks a little nice. This isn't even a priority 1, just something I wanted to begin thinking about so down the road when I can afford it, I'll get exactly what I want.

We have a 2000 VW Passat. It is my DH's baby and he takes EXCELLENT care of it and it will last at least another 10+ years. He does routine maintenance himself. BE AWARE that even the PARTS he orders on-line are more expensive so fixing anything in a shop will be more $$. Even the engine oil he buys is more $$$. Not to mention that unless you are buying a DIESEL engine car, VW cars need PREMIUM grade gas. Can you say cha-ching?!!

I, like you, have almost a 100 mile commute a day. My Honda Insight gets about 45 mpg on regular gas. Each gas up is around 9 gallons of around the low $30 range. It is over $70 every time DH fills up and he only drives the Passat to and from the train station at around the low 20 mpg on premium gas. This is WITH a chipped engine that gives better mpg. I am SOOOO glad I picked the Honda every time I have to fill up.

I thought about a VW TDI wagon when I was car shopping but the higher up front cost and the higher cost of diesel gas deterred me. Glad now after hearing about all the VW recalls.

Also considered the Prius (yuck) purely because of the mileage factor because the mpg is BETTER than my Insight but the upfront cost of the car was about $5000 more. That's a LOT of gas to buy to make up for a 5-10 mpg savings.

Just wanted to put my 2 cents in about the disadvantages of picking the VW Passat in order to "save" money... you won't.

Hopefully your need for a new car is FAR in the future. Once you get your immediate financial house in order, you can then start putting money away for the future replacement car.

We can always DREAM but temper that with reality before you pull the trigger and make the big purchases.

Good luck!

[disneysteve]

for now you may need to take some drastic actions to get back on track.

Just to be clear, cancelling your $15/month WoW membership does not constitute "drastic actions."

[Whitechapel]

You are spending $15/month to play a video game plus whatever you spent for XBL at the same time that you are coming here seeking help to clean up your finances, make ends meet and get out of debt. Do you see the problem here?

$15/month is not worth it. You can't afford it right now. It doesn't matter if you enjoy it. It doesn't matter if all of your friends have it. This is a good example of the kind of thing you need to change going forward.

As for the car, don't let your self be fooled into thinking that you need to spend a certain amount of money to get a car with good mileage. Plenty of cars way cheaper than the one you mentioned get good mileage. In fact, in the long run, it might be cheaper to get a car with worse mileage but at a much lower price. What you save on the car purchase could more than make up for the extra you'll spend on gas. Gas mileage is not nearly as big a deal as people often make it out to be.

OK. I mean it makes sense. So I will NOT renew my membership when it's up. When my prepaid time is over I'll stop for a while. I was medicorely bored with it, maybe another break is indeed in order. OK. But then what? I go and piss the 15 bucks away on something else. I don't care, and I just screwed myself out of WoW time. See, bad decisions lead to bad spending. Sadly it's all I've known my whole life. I really feel I can't call myself grown up until I get this mess that is my life in order. And you guys can help me fix the financial part of it. Just think one day when everything is finally good you can say what a nightmare you took and got him turned around. Very gratifying! Because I'm not making it east. And I'm forgetful, I literally hand write everything at work. So I'll ask the same question or a similar question, I do not mean any harm. I don't often re-read the entire thread. But I need to stop the bad decisions. I think I should try and stop and thinking if this is a "need" or a "want", and know what budget I have. If it fits in, then great! If not, then I do not need it. The very foundations of good saving are incredibly transparent in me, so I need to work on the basics and at least getting a budget. I have not yet sat down and hammered out something that I thought was any good. I'm stuck on how much I give for each category.

Blah. This whole mess has ruined my day. Not only that, but my roommate Facebooked me this afternoon and is asking for $321. I don't want to list the breakdown of it but he basically wants half a month's rent and half of the rest of the utilities. He is afraid to approach me, so he messages me. He's seen me when I've absolutely lost my mind, so he knows what I am capable of. And he has nothing to be afraid of, I'm kind of medicated right now. It sucks. And it kind of pisses me off that he waits until last minute to ask me for money. I'll just sit him down and tell him I'd be glad to pay him and maybe we can work out a payment plan or something. What do you think I should do, given all the creditors,school loans, and utilities from the past I owe?

Btw, I hate talking about this bipolar ****. But I'm just letting you know how I feel. Either way, I laughed when my mom called it a disease. There has to be some sort of chemical imbalance that happened over a few years. Doctors haven't figured it out in the 2 years I've been seeing them. And you're right, no one's making me talk about it, but I'm an emotional guy, haha. I like feeling to my words.

[Whitechapel]

Just to be clear, cancelling your $15/month WoW membership does not constitute "drastic actions."

Oh Steve...lol.

I have until 12/1 before it expires. Score!!!!

[disneysteve]

I think I should try and stop and thinking if this is a "need" or a "want", and know what budget I have. If it fits in, then great! If not, then I do not need it.

This is essentially how my wife and I "budget". We do not sit down and list exactly where every dollar is going to go. What we do budget is our savings. I can tell you exactly how much goes to which account every month. I can not tell you how much we spend on food or gas or clothing or travel or anything else. It can vary dramatically from month to month. As far as I'm concerned, as long as the savings goals are being met and all bills are being paid in full every month, how the money is getting spent really doesn't matter.

I'm not sure I'd recommend that method to you, though, because I think in order for that to work, you need to have your spending well under control. Otherwise, you'll blow money early in the month and come up short at the end of the month and you'll be screwed.

Have you gotten a copy of Total Money Makeover yet? If not, I'll reiterate that you can get it on half.com for about $2 plus shipping. It is well worth the investment.