Comments on: Paid off car: one more step to financial freedom!

By: The Financial Blogger | The “I Deserve It Factor”

The Financial Blogger | The “I Deserve It Factor” — Wed, 19 Dec 2007 11:01:28 +0000

[...] go shopping as my wife could not pick me up earlier (this is one real inconvenient of having only one car!). I felt relieved, I felt good, I felt like I should reward myself for the effort I made. This is [...]

By: The Financial Blogger » Live Smith Manoeuvre Example, September update

The Financial Blogger » Live Smith Manoeuvre Example, September update — Mon, 10 Sep 2007 11:02:53 +0000

[...] got back from the garage and it costs $1,900! I recently put about $1,300 six month ago. Even if my car is paid off earlier this year, I will still have the equivalent of a car payment this year. I used to pay $330 [...]

By: The Financial Blogger

The Financial Blogger — Thu, 16 Aug 2007 19:20:49 +0000

Hi Chris,
This is very good that you and your wife were able to manage with 4 kids and only one salary. I would like to know how you managed your personal finance. We aim the same thing but I fear my wife would have to get back to work once her maternity leaves is over.

By: Chris

Chris — Thu, 16 Aug 2007 18:13:55 +0000

FB,
My wife quit working when our first 2 (twins) were born. We now have 4 kids, and I would like to have her extra paycheck, however she’d be working for almost minimum wage (we live in the US). I think I figured it out to be about $6.45/hr, compared to what she was making at the time ($15/hr). I arrived at her real hourly rate by subtracting off daycare, additional driving to/from work, etc.
We’re about to settle on our first rehab house, and if that goes slightly well, we’ll be making about the same amount in a shorter timeframe, and without having to juggle getting the kids to daycare, etc.

Congrats on getting the car not paid off! We only have 1 car loan left ($173/month). If all works out fairly decent, by the time the car is paid off, we’ll the additional funds necessary to keep our 2 cars running for 10-12 years (or more if we’re really lucky). And the whole time we will be building up savings to use for a replacement vehicle when it is necessary.

By: Blain Reinkensmeyer

Blain Reinkensmeyer — Wed, 15 Aug 2007 02:07:19 +0000

Congrats FB! That is always a good feeling to have.

“We are trying to put more money aside by increasing our Smith Manoeuvre payment.”

Only a matter of time before that’s done too.

By: The Financial Blogger

The Financial Blogger — Tue, 14 Aug 2007 20:18:16 +0000

Hey Gates, you got that right!
In fact, I just put that 2K on my car two months ago (bearings, brakes, timing belt, etc). Man, that was a shock!
I definitely need to set up a car fund but I will not be able to do it this year as my wife will be on maternity leaves… 55% of her income, this just made a nice cut in my budget!
Hopefully the Mazda will survive another 5 years without too much cost. It would it 225K KM and I will be able to change it for a bmer … welll.. this is the plan

By: Gates VP

Gates VP — Tue, 14 Aug 2007 19:59:18 +0000

Hey FB, congrats on paying off the car, it’s always a big day

Of course, you do point of the big caveat: The tough part still remains. Now that we have no car payments and a low insurance cost, our cash flow has increase. For which I would personally start a “car savings fund”.

The short-term cost of the car will vary greatly, like the day when you pay it off. Of course, even though you feel $300/month richer you’re actually just on “borrowed time” b/c your 2002 is going to need $2,000 in the next 18 months: tires, belts, brake pads, suspension, etc. So your long-term cost hasn’t changed, it’s just lower for the moment.

If you can live without the $300/month. Why not put aside $250/month towards the next car and the repairs on this one (which is probably running out of warranty)? You’ll get an extra dinner every month and you’ll have money around when the car needs repairs.

At some point, the Mazda will give up the ghost or the repair bill will simply be too large. At that point you’ll be able to roll that money into the next car and get more car OR simply pay for less time.