Guest post from Tiffany of Don’t Waste the Crumbs
I grew up thinking that every family had to have two cars. Even if the family lived in a big city, with ample public transportation, and both spouses worked from home – two cars were still necessary.
And even when we slashed our budget by 50%, we still kept two cars.
It wasn’t until my husband and I moved into our townhouse that we realized that having a second car wasn’t really a “need” for us. Between finding parking spaces, maintaining an older vehicle and switching two car seats back and forth, we often found it easier to just use the family sedan.
Not wanting to intrude on my responsibilities on managing the house and raising our kids (which often times require a vehicle), my husband had the idea of carpooling with a co-worker (who is also a good friend) for rides to and from work. When surf season had passed and regular exercise was becoming not-so-regular, my husband suggested riding his bike for the 8-mile commute.
After a few weeks with a new primary mode of transportation (his bicycle) and a back-up in place (his co-worker), it became apparent that we officially had no need for a second car. We listed the car for sale and sold it for asking price.
Since we’d just finished paying off all our debt over the last two years, we certainly did not want to back-track financially and take on debt if the need for a second car ever arose in the future. So we decided to start setting aside money into a car fund in case we decided to buy a second car in the future.
We took the money we’d earned from selling the second car and used it to set up our second car fund. The second major deposit into the car fund was the profit from a garage sale: $500!
Next came cash birthday gifts sent from various family members. Christmas came and we decided to put what we budgeted for gifts towards each other directly into the car fund instead. Our car fund was building – very slowly – but we were enjoying the thrill of watching the balance steadily go up.
One night my husband and I started “dreaming” about the next car. We weren’t in a rush to purchase, and certainly not in a need, but we enjoyed talking about someday walking into a dealership and paying for a car with cash. And then it hit us – we had gotten pretty good at saving and this goal was not unattainable. At that moment, we devised a plan to save aggressively so that we would be able to buy our “someday” new-to-us-car in one year.
Here are the basics of our plan:
- We researched the year, make and model of the car we were eyeing and came up with a ballpark number of how much it would cost us to buy it in cash – including tax, title and license.
- We estimated how much a monthly payment would be for that car – in addition to gas, insurance and maintenance – and put that amount into the car fund each month.
- I was offered to take on additional classes at my part-time teaching job. I took advantage of this offer and all the extra income was put into the car fund.
- We applied our “Christmas gift plan” to every holiday – Mother’s Day, Valentine’s Day, Father’s Day, birthdays, anniversary – all of this gift money went into the car fund.
- Realizing that our stockpile was plentiful, I stopped using coupons and started shopping from our closets instead. I even started to blog weekly about our grocery budget for additional (and public) accountability.
- We had another garage sale and it was even more profitable than the first one. After treating ourselves to Chipotle (a reward for meeting a smaller goal), we deposited the profits into the car fund.
As the one-year mark approached, our schedules started to shift and the need for a second vehicle had become inevitable. We checked the balance of our car fund and were surprised to see that we had indeed reached our goal!
My husband found a four-year old model of the car we wanted with just under 17,000 miles – it was practically a brand-new car. We went to the dealership, inspected the car and made a cash offer and they accepted.
Today’s we’re proud owners of a 2008 Honda CR-V EX. It was paid for by methods that aren’t new or earth-shattering, but they are proof that hard work and dedication do pay off… and that paying cash for a car really is as sweet as we dreamed it to be.
Tiffany is an in-house day care teacher, private chef, housekeeper, teacher, laundry service, chauffeur and dedicated CEO of her house. She aims to be a good steward of all He has given, so she tries to do more {and do it better} with less. She’s making baby-sized strides and would be honored if you joined her for the ride via her blog, Don’t Waste the Crumbs!
Wow–the timing of this story!
We are expecting our third child in January 2013 and had previously been driving 2 sedan cars. We did attempt to try and fit a third child seat in the backseat, but to no avail. With a car fund already built up, we knew it would be possible to pay cash for a minivan.
With no rush to buy (I LOVE being in that position!), we started perusing craigslist.com as well as other car websites to try and get a better understanding of what options we had that fit within our budget. The Hondas and Toyotas were not even on our radar as we were going to be perfectly happy with a ‘beater’ vehicle to just get from point A to point B.
We found a 2006 Honda Odyssey with 66K miles from a private seller asking well within our budget. Not being ones to make quick decisions, we knew we needed to sleep on it. When we called back the next day, it was already sold. Despite similar situations happening like this previously in my life, and better things coming along, I was somewhat crushed. I just didn’t think we’d find something better.
Less than a week later, we located a private seller offering a 2008 model with 60K miles, fully loaded (navigation, DVD, leather, moonroof, etc.) with bumper-to-bumper warranty to 100K miles or 2015, for not much more out of pocket. It was still easily within our budget, yet much nicer than the 2006 model!
As luck (or rather God) orchestrated it, my sister-in-law needed a different car for her daughter. My current car (11 years old, 100K+ miles) fit the bill. However, her being 5 hours away, we were unsure of how to get the car to her. As it turned out, the minivan we located was within half an hour of my sister-in-law, so a very easy swap was done in one day. My husband drove my car down, left it for his sister, picked up the minivan and drove home!
Do not be discouraged in your efforts to save for something. If you occupy yourself with life and what you do have, it’s amazing (as the author describes) that you turn around and find that your savings has accumulated nicely (with seemingly little effort on your part). I know folks that feel comfortable with their payments, but I can’t imagine it’s anything like the feeling of paying cash for something and keeping the payments in your pocket.
Thank you for sharing your story. Since we just got our minivan last weekend, this really resonated with me!
Wow Jana! Thank you for sharing your story in return! The perfect orchestration of our lives is amazing to see in-action. Congrats on your new purchase!
Another option for families considering going down to one vehicle but don’t want to sell their 2nd one right away is to register the 2nd vehicle non-op for a while (if your registration is up for renewal). We only use one vehicle and have my husband’s v8 dodge dakota registered non-op. It’s still there in case of a true emergency (the dmv issues 1-day use passes that you can fill out the day you need to use it so long as you fill it out in pen!) but doesn’t rack up the expense with registration, gas, insurance, etc.
Congratulations! We sold my PT Cruiser a year ago, and now use our Toyota Tacoma for everything. I actually love being a one-vehicle family, and often wonder why we ever thought we needed two. We’re expecting our 3rd child in January, so it won’t be long before we’ll be looking for a vehicle with more seats if our family continues to grow. Thanks for all the great ideas! We’re trying to pay off our student loan debts first, so I’m hoping our current vehicle can last until those are gone! 🙂
Congratulations on the new baby! Having only one car was very freeing and incredibly simple, but that season has temporarily passed. I hope you’re able to achieve your financial goals so you’re ready for your newest family member’s arrival!
Great work and great story! I like how you admit that your schedules shifted and you realized a need for 2 cars again. I have read many articles on this and other blogs about becoming a 1 vehicle family and many of the commenters act like anyone can do it of they really wanted to. For us, it just wouldn’t be realistic. I teach 2.5 miles away from my house, but no, I cannot walk or bike because I bring my kindergartner with me and unfortunately have to drop my toddler off a few miles out of the way. My husband wrks 30 mins. away when there is no traffic. Sharing a car would mean me putting two kids in the car 2:30-3:30 a.m. to drop off my husband on Tuesdays and Thursdays, then him getting off at 1, but waiting until around 4 for us to pick him up, then fighting the beginning of rush hour, so not getting home til 4:45 or 5. The other 3 days might involve him off-ok he can drop us off and pick us up. Or he might need to be at work at 6 or 7 instead of 3:00 a.m. and get off around 4 or 5. A little more manageable time wise, but still 2 hours total for me and kids to drop off and pick up. Then, weekends, he always works at least Sat. Or Sun. If not both, so again 2 hours in car or us not having a car. No errands ( remember I work during the week), no soccer or t-ball, no friends’ birthday parties, no church. Sorry for the rant, but one car does not work for everyone. What does work for us, is me primarily driving the new to us Honda Pilot, since I usually have kids with me and him driving a 2001 civic that has seen prettier days cosmetically ( I hate to call it a beater. It was the first car I bought myself as an adult and I still love it, but it is missing a hubcab, the headliner is falling down, 2 rain shields on windows are broken, keyless entry no longer works) BUT it runs well and has good gas mileage. We did consider selling the pilot during a brief period of my husband being unemployed, but luckily, it was brief.
Same here with us. There is no way we could be a one car family. Our situation sounds much like yours. I would even be afraid to try all for my husband to get annoyed on week 2 and we would have to end up financing a car. I try to be as frugal as possibly and my husband is certainly on board with me. However, he will draw the line at certain things and I’m fine with it!
Thank you Christy and Meredith! When we saw the schedule change coming, we sat down to see if it was logistically possible to do it on one car. Simply put, it wasn’t. Too many miles, too many hours and sacrificing too much family time to see a benefit. We’d literally be spending all our time getting from A to B to C (and back to A) and no time enjoying where we were with each other. We could always sell the car if things changed again, but we wouldn’t be able to get back the time we missed.
Way to go! Good job.
Thanks Nancy!
It never ceases to amaze me how few personal finance experts advocate creating a car fund. Few people can just pull out their checkbook or wallet and pay cash for a car. It is after all the second most expensive thing we usually purchase.
And we have to purchase it often, because it’s a mechanical device and wears out. Therefore it needs to be preplaced. Ergo: special account for said replacement!
We started when we paid off a car. The next month we suddenly had money left over in our account. What was that? Oh, that’s the car payment. What are we going to do? I had dreams of all manner of deliciously unnecessary electronic gadgets and she had dreams of a lovely B&B long weekend (heck, we could afford an extra day or two of unpaid time off).
We allowed ourselves to splurge for one month, and then simply opened a new savings account and used a company direct deposit automated deduction directly into that account so the money never touched our hands (can’t ever trust those!).
When we mention this to friends, we’re always surprised to see how many people actually love their payments. It’s as if they feel comfortable — it’s what they know.
I love how you guys splurged for a whole month and then got right back to it! Working hard to save hard can be tiring, but it’s so important to reward ourselves for our hard work. But our reward should be treated as such – a single reward, not a backslide into poor spending habits.
We prepared ourselves for the shock when people would say to us, “Nice new car! How much is your car payment?” We certainly didn’t lie, but not having a payment is not the norm.
Isn’t that question so telling: what’s your car payment? So many people live their life in terms of payments. Too many…
Congratulations! I just love reading stories like this — they are so inspiring!!
Thank you!
Wow, Tiffany! Great job! It’s amazing how saving money has a positive snowball effect, with just as much intensity that spending money and debt get us into a negative snowball effect. It’s exciting to be able to stick to a written plan, and see it come to fruition.
Love the score on the $500 garage sale, too! Nice!
The snowball affect is huge! Once you see the growth, you want to encourage it. Suddenly every single expense gets scrutinized – which can be both good and bad – but it really puts your immediate wants in perspective with your long-term goal.
We were shocked on the garage sale. Who knew “junk” was worth so much?!
That’s wonderful!!!! Thanks for sharing your story!!!
You’re welcome!
Wish one day we can do the same it just seems so hard for us to put money away without using it for other things all the time .
Daysi,
I hear you on that on! Seems to come in clusters.
Exactly! Life keeps getting in the way of our savings plans, we’ve been “saving” for a year now and we’ve got $44 to show for it. And, sadly, it’s actual life (car accidents, illness, etc) getting in our way, it isn’t even fun things!
Don’t give up! There are definitely set-backs in the saving process, but every little bit counts!
just imagine if you didn’t have the savings… it would be -xxxx