Comments on: Buying a Car with Cash: How We Did It (Guest Post)

By: Olympic Athletes and Financial Success :: Money Saving Mom

Olympic Athletes and Financial Success :: Money Saving Mom — Wed, 17 Feb 2010 20:42:38 +0000

[...] not enough to say, “I’m going to get out of debt.” Or, “I want to save to pay cash for a car.” No, you have to have a clear-cut game plan. You have to have goals and then break those [...]

By: Shaun McGowan

Shaun McGowan — Sat, 06 Feb 2010 05:06:09 +0000

Smart move! This is a great inspiration to me. We too are debt-free and looking at buying another car, It’s really fun to watch that fund grow even faster than it was before and know that even if his vehicle dies tomorrow we have the funds to replace it without going into debt.

By: LANA

LANA — Sat, 06 Feb 2010 02:14:20 +0000

We also have no car payment and drive a 2008 Mazda 5 that we purchased brand new (I thought I would never own a new vehicle) which replaced our 1997 Saturn. We didn’t save monthly like you did, but instead, took advantage of the cheap mortgage rates and renewed our mortgage for a much lower rate that freed up money for a new vehicle without adding any amount owing to our mortgage- brilliant I thought:)

By: Janice

Janice — Fri, 05 Feb 2010 21:01:42 +0000

I have purchased three cars without having a loan. Two were brand new and the third was a one year lease. My parents never had any type of load/debt and they really encouraged my 7 siblings and I to pay cash whenever possible and to save money. It is a great feeling to be able to write a check that covers the price of a car.

By: Courtney

Courtney — Fri, 05 Feb 2010 18:45:23 +0000

@Allison, Check out Craigslist if you have an active one in your area. There are FREE pianos to be had quite often in our area (a major city) and it might be worth the cost of a tuning and renting a truck to be able to get one for free!

By: Ln

Ln — Fri, 05 Feb 2010 16:59:02 +0000

Time to get creative! Above there are some good ideas to get extra income.

By: Homestead

Homestead — Fri, 05 Feb 2010 16:20:48 +0000

There is another added savings posibility with a paid-for vehicle…. insurance. You don’t have to have top of the line complete coverage (what’s it called?) when the vehicle is paid for. Talk to your insurance agent and see what kind of coverage works best for you. We have what I call hit-a-deer coverage on our nicest vehicle (with a fairly high deductible) and liability on all the rest. The amount of money we’ve saved doing liability-only covers the cost of replacing them at this point. (Saved, of course, Ramsey-style… in a money market account.)

And can I mention the power of the automatic checking account deduction? We have $500 taken out on the 15th and transferred to our money market account (we can write checks out of it) and when that account hits a certain amount the money (right now we have it set at anything over 5k) it goes into a better interest earning and less liquid account. And we can stop the $500 deduction with a phone call so if we have a super-tight month we can stop it for that month (although we’ve never had to do that it is nice to know we could).

By: Ln

Ln — Fri, 05 Feb 2010 15:23:44 +0000

Hi Ashlea…we’re in the same exact boat as you with the exception of me not being pregnant but we do have 3 children under 5. We don’t have a lot of debt (no credit card debt…just 2 cars and student loan.) I think we should email each other and come up with a plan that fits our families and keep each other motivated and accountable. I’ve seen other people do things like this on blogs but I’ve never joined in because when there are so many people doing it, it seems less personal to me (and that there is less accountability) AND I think I would be motivated to have a family so similar to mine doing it at the same time. Think about it and if you’d like to at least talk let me know and we’ll figure out a way to get in touch. Have a great day!

By: anonymous

anonymous — Fri, 05 Feb 2010 15:19:16 +0000

How are you supposed to save anything when your bills are at or above what you bring home each month? What do you do in that situation? My husband and I bring home $1300 a month and just our bills, rent and car payment are equal to or more than what we bring home each month. It is impossible to save at that point.

By: Lane

Lane — Fri, 05 Feb 2010 15:11:42 +0000

I’ve read of people who were in situations similar to this and had to take on any extra employment possible…selling things on ebay, delivering newspapers, etc. and also used lots of other techniques like working something out with the utility companies or childcare facilities (both of which may not be flexible, but worth a shot because some are)…and of course these people weren’t able to do it with the speed of others who make more, but still eventually able. Truly, every little bit helps…$2 here and $5 there. It all adds up in the very very very long run. I hope this helps. Dave Ramsey’s Financial Peace University can really give you some great ideas and you’d be surprised at just what your brain can come up with.

By: Sherri

Sherri — Fri, 05 Feb 2010 13:34:50 +0000

@Anonymous, I think this is where folks have to get very creative. Can mom babysit or sell on eBay to generate some extra income from home? Can Dad do odd jobs on the weekend? If it can't be squeezed out of the regular budget, then what about the tax refund? At this income level, one does not actually pay federal income taxes, and Earned Income Credit gives you back money you didn't pay in. That can be a few thousand a year to put into savings. Oh, and just wait for the IRS to send the check to you- don't use the refund anticipation loan that tax preparers push (which takes a big chunk out of your total).

By: Lauralee

Lauralee — Fri, 05 Feb 2010 13:34:22 +0000

@Anonymous,
Hello there
I understand where you are coming from with the limited income comment. It looks like you have a budget planned out and that you are conservative with your money. For me I picked up some small jobs to help push me over the edge so I could gain some ground.
Some ideas that friends helped me with included: doing laundry for someone who would normally have to go to the laundry mat/doesn’t want to do it and will pay you. There are several people in the area I live in that have to use the laundry mat. If you average out how much it costs them to do so and take a few dollars off you can make some money from the comfort of your own home. The advantage to them is they don’t have to sit at a laundry mat and their clothes get folded and done by someone else. I also found a few people who needed someone to clean for them. I made some extra money and I was able to pick the hours that worked best for me. I also made bracelets, book marks, and a few other crafty items and asked a person if I could sell them in her store and she could keep a portion of the profits. I baby sat on Friday nights and Saturday nights. I have watched dogs for people and checked on houses for others. My husband has shoveled drive ways. I guess these are some ideas that have worked for us. I am sure there are thousands of other ideas. My favorite part about how we do it is that it fits in our schedules. Also moneysavingmom has a page where you can read about some ways to make a little extra income. It sure can go a long way.
The most important thing I think we did was to pray about it. And I have to say that Dave Ramsey helped us realize spots that we didn’t think about for ways to save.

By: Lindsey

Lindsey — Fri, 05 Feb 2010 13:25:54 +0000

great post! paid off cars really do ride better! hope you inspired others to try it out! cheers to dave ramsey’s baby steps too!!

By: Ronica

Ronica — Fri, 05 Feb 2010 12:34:20 +0000

Isn’t that a great feeling!! My husband and I made our last car payment 6 or 7 years ago, and when we did we set up a bank account we call our “car fund” and we have $300 automatically transferred into it each month. It really works! Want to know what our last purchase was? A white van!! The system really works!
Ronica
http://www.keepingourcash.com

By: Trixie

Trixie — Fri, 05 Feb 2010 10:29:20 +0000

@Anonymous,

I was in your position several years ago so I understand how difficult it is to squeeze some savings into your budget. Our situations are probably quite different, so what worked for me may not work for you, but I’ll share the three things that helped me during that time.

1. I searched out ways to earn extra money. Even $20 extra is a help! This brought out a lot of creativity in me that I didn’t know I had and was a lot of fun. A great self confidence booster!

2. My sister and I roomed together for 3 years. We split our $465 2 bedroom apartment rent so each of us only paid $232.5 a month

3. Eventually, I was able to secure a higher paying job with more earnings growth potential. The higher salary didn’t come quickly though — it took years.

Hope this helps. Whatever you do, don’t get discouraged. You can do it too!

By: Heather H.

Heather H. — Fri, 05 Feb 2010 07:33:16 +0000

I love this post! I actually just got The Total Money Makeover book in the mail yesterday! We’re working our debt snowball & can’t wait to be DEBT FREEEE!

By: Suz

Suz — Fri, 05 Feb 2010 05:13:38 +0000

Amen Sister! A paid for car is the best! We paid ours off several years ago with money we had in the bank… now we are working on building that nest egg again for the next big expense that comes our way.

By: Martha Artyomenko

Martha Artyomenko — Fri, 05 Feb 2010 03:47:07 +0000

Great post! I have never borrowed money for a car and I find I save money all the time this way on registration, insurance etc and the money that I spend on repairs by driving an older car are much, much lower than any car payment!

By: Bargain Junkie

Bargain Junkie — Fri, 05 Feb 2010 02:59:57 +0000

The average price of a new car in the U. S. is $28,400 and as soon as you drive it off the lot you’ve already lost a bundle. We only buy used Volvo station wagons. They’re safe, they last forever, and they don’t cost very much. Plus they can haul a lot of yard sale treasures.
Here’s how it breaks down. We buy the wagon for $6,500 and keep it for two years. Then we sell it for $3,000. That means we have had a good quality vehicle for $3,500. Of course, there are always repairs, but we’re still way ahead of the game.

By: Pam

Pam — Fri, 05 Feb 2010 02:34:54 +0000

It is a great feeling to be able to pay for a vehicle in cash instead of having to make payments towards a loan. I totally agree. My husband and I did the same thing. We did a ton of research and compared several different options before making our purchase. It was hard for us to let go of so much money all at once, but we knew we didn’t want to have to pay any interest and it made the most sense to us financially.