If you have arrived for the follow up to our Monday Money Minute video you are at the right place! But first a little update.
Remember last month when I told you about how bad I want an Audi? Well, . . . .
No, I wish. I’m still in the wanting phase of getting my Audi. As promised, I’ll give you an update on my progress. A number of other bloggers report on their progress with paying off debt and others on their progress with increasing their net income. I’m reportage on my life-long dream of buying an Audi . . . with cash.
John and I like to work towards various financial goals, such as saving for hard wood floors, building up funds for a fabulous vacation or buying that $7,000 #MoneyConscious living room a few months back. We’re now doing the same for our next car. I vacillate between a 2010 red or blue Audi A3 or a 2009 white or blue Audi A4. Right now, they’re pricing about the same. I start to drool when I look at them cars on cars.com.
My Funny, But Sad Audi Story
We were up in Boulder, about 30 miles north of Denver, at our first FINCON Local Meet-Up with our Colorado FINCON group (join, if you haven’t already). We were giving two members a lift back to Denver. As we walked across the street, Michelle of @shopmyclosetproject12 asked if a beautiful, silver Audi A4 Allroad was my new car. I laughed and sadly said, “No. Mine is still on its way.” This Audi currently goes for $45,000 to $50,000. For those who know me, a lot would have to change about The Debt Free Guys net worth and income to let me let us spend that much money on a depreciating asset.
It was nice to think about, but this Audi certainly isn’t for me right now. That is unless Oprah buys me a car. (Wink, wink to those who attended our FINCON ePublishing panel)
Show Me the Numbers
OK, I went back to when I first started my Audi account. I opened an account April 2015 with $2,000 from another bank account. I wanted a good start. Of course, most would look at that $2,000 and say, “Bam! Let’s buy a car.” As you read before, this will be a cash deal.
After making my deposit, I looked to see where we could squeeze money from our budget. I see so many peers driving new Audi A4s, BMW 530s and Jeep Grand Cherokees. I thought, if they can afford to make those kinds of car payment, lease or otherwise, I can too.
Edmunds found that the average downpayment for a new or used car in 2013 was 12 percent. For an approximately $36,000 car, a 12 percent downpayment would $4,400. To buy or lease one of those cars with $4,400 down, one would spend between $600 to $800 a month on a car payment. They spend on a depreciating assets what some spend on a mortgage.
Some of our budget categories have grown over the past three to four years as our salaries have grown. We decided we would cut back. After doing the math, I figured that we could afford it. We could make room in our budget to save $700 a month in my Audi savings account. Since April, I have contributed $350 twice a month to my Audi savings account. Also, because I am paid bi-weekly, I get 26 paychecks a year. That means that twice a year I will make a $1,050 contribution to my Audi savings account.
This does mean we’re drinking cheaper, Trader Joe’s wine at home now, rather than having a glass or two out.
The cool thing is this reminds me of when we were climbing out of debt. This is what we did when we first started to become #MoneyConscious. We were still having a full life, doing many of the things we love, but we found ways to do them for free or cheap. It’s been fun! It’s also been exciting watching the account grow and know that we will achieve our goal.
For your viewing pleasure, I present the graph below that shows that as of the first week of October, my Audi savings account has $6,205.80 in it.
What are you saving for now? Can you squeeze a more out of your budget to get there faster? Come back next month when I’ll talk about some of the other squeezing we’re doing.
And Now for the Other Two Tips
You Don’t Need to Buy Local
The internet has done wonders for the car buying experience. If you can’t find the car you want shopping your local dealerships, extending your search online across the country may be the answer. As I mentioned in the video, there are millions of cars for sale. You can see more of them online than you will ever see in a day of car shopping. Check out sites like Cars.com and KBB.com to search for new and used cars for dealers and private parties. As a matter of fact, we bought our Mini Cooper S from Washington and the dealer paid the shipping.
Always Be Willing to Say No
You don’t need a car immediately. Even if you think you do, you can always rent a car for few days while you search some more. Being able to say No to a car dealer or a private party seller puts all the power in your hands.
For our previous three tips to get your dream car, watch our Monday Money Minute video.