220k and counting

car dashboard

No, that’s not our current net worth. That’s how many miles we have on our 2006 Toyota Prius, and we have no plans on replacing it. We could replace it if we wanted to and go buy a newer vehicle with all the bells and whistles…

…but we won’t

When you start to look at a vehicle as a tool to get you from point A to point B, you realize that any tool will do. Any car will fit the bill and any newer car we might purchase will do pretty much the same thing as our Prius.

The joy from a newer car (or new anything) will wears off in time and you’re left with the realization that the money is gone, never to come back. We’re not going to magically get better gas mileage or lower cost of ownership by buying a newer car and the fun will wear off in about 6 months or so.

 

Benefits of driving our current car

You may be thinking, “new cars have these great features that make driving so much better!” But really, driving our existing car has a ton of great “features”.

  • We’re no longer losing much, if anything, in depreciation
  • When we get a dent or scratch, we don’t fret over it
  • Newer cars have issues too, but over the course of having ours, we’ve put in a relatively small amount into repairs
  • Car payments are a thing of the past
  • Money saved from not buying a newer car is worth a lot more later
    • $10,000 invested at 10% is worth over $16,000 after 5 years! That’s an extra $6000 we can make by not buying a newer car.

But what should you do?

I’m not sure what your car situation is. Maybe you’ve got car payments or have been without car payments for a long time. We made a decision several years ago that we were never going to have car payments ever again and so far we’ve stuck to that.

The best place to start is decide what you want your future to look like and then take the necessary steps that will move you in that direction. If you want to retire early or save more money, you should ask yourself if purchasing something moves you in that direction. “Stuff” will fade away, but relationships and special experiences that create memories can last a lifetime.

Final note

If you look above, I didn’t say “new” car very often, but instead used “newer”. That’s because we plan on only purchasing used cars in the future after they’ve lost a large portion of their value in depreciation. We also purchase vehicles know for reliability which ensures they’ll be problem free well into the future.

That being said, you don’t need to be like us. Someone needs to purchase the new cars that we will buy a couple of years later at a discount on the used car lot.

You budget how much for gifts?

gift

In this post, I’ll be discussing how much we budget for gifts each month.

Get to the point already!

We budget $100 for gifts each month. Over time, this amount started around $50 a month and has increased to $75 and now $100. We’ve kept it at $100 for quite a while now.

How do you stick to it?

Given what this category covers, we can generally stay under this amount pretty easily each. Sometimes we’ll have an amount that carries over and other times we might spend slightly over this amount.

What all does it cover?

As you would expect, this category covers gifts.

  • For birthday parties our daughters are invited to
  • For extended family members
  • Random acts of kindness or pick me ups for people
  • Cards and gift bags

It does not usually cover Christmas or birthday presents for the immediate family. We oftentimes use savings for that.

Checkup

How much do you spend on presents each month? What other categories would you like me to cover? Let me know in the comments below.

You can also see how much we spend on other budget categories here.

March 2018 – Mortgage Payoff Update

At the end of March, our remaining payoff balance is at 17.73% of our original mortgage that we took out in 2007. That’s a reduction of 2.19%.

How much longer until the mortgage payoff?

Once all of February’s payments are applied, we’ll have reduced our mortgage balance by about $2971 this month. That brings our balance to just above $24k. According to our schedule, we have 5 payments left. That means our mortgage will be paid off on September 1, 2018.

We didn’t have anything extra of significance to throw at the mortgage this month, just some small amounts here and there.

I’ve had some projects wrap up with my side business and have gotten paid for them. That’s how we’ve been able to cut off an extra payment. In order to reach the September 1 deadline, we were going to have to use some money from savings. From this point forward, anything extra we throw at it over what is planned, will reduce what we take out of savings to achieve the September 1 goal. Once we don’t need anything from our savings, then we’ll work towards cutting off an extra payment.

Budget Series

I’ll be publishing an update on this soon!