A couple of weeks ago I wrote about a couple who is now selling their home after owning it for just one year. I’m really not sure if they saved or not to purchase the home but I know they only put 5% down to purchase it. In the end, that couple started to hate their high mortgage payment and ended up with buyer’s remorse. I know it’s hard to give up a lump sum of cash when buying a home. It was hard for me to see that 20% come out of my bank account when I bought my house. But that was the purpose of that money and I knew it was the best decision financially for me.
I recently helped a friend with the purchase of a car. Unfortunately, the car broke down and was really not worth repairing it. After owning it for 12 years her mechanic told her she would be better off buying a new car. She freaked out a bit and then we put our thinking heads together to figure out her next steps. Unfortunately, she had not saved for this emergency. Sure, she could finance it. I’ve done that before and I don’t see anything wrong with it especially if you can get a low interest rate and many dealers are offering excellent rates right now (0.9 to 1.9%). My other requirement if I’m financing a car is to keep it at 3 years or less. My friend wanted an SUV because that’s what she was driving before and she was used to it. But because she had not saved any money to put down the only way she could afford it would be to take out a 6 year loan. Now that is crazy to me. Who wants a $400 car payment for 6 years? In the end, she settled for a small sedan which is much more in tune with what she could afford.
It’s crazy how expensive weddings are getting. I don’t know how people can afford them any more but some how they are hosting lavish weddings. I know that when I was planning my wedding over 10 years ago I used to receive targeted bank loan offers in the mail where they would offer me $25k to finance the wedding of my dreams. Is this how some people are financing their weddings? I hope not. Who want’s to be in debt after getting married? I didn’t have much money when I got married but I also never dreamed of a lavish wedding. I was very happy with a small wedding at the cost of $10k including my honeymoon.
Who doesn’t love to travel? I know people who are always dreaming of traveling but I don’t see them saving to make those dreams come true. The minute I mention I’m going on vacation they start getting nostalgic about how they wish they could travel too. I love to travel and I’ve done quite a bit of it but this year we’re taking a little break. We have a few home projects to work on and we still have some home renovation debt to pay off. In the meantime, we’re planning and saving for some travel next year. Now that I’ve learned more about travel hacking I’m planning ahead to save some money.
Are you saving for the things that you want?
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