03 Jul Why I didn’t buy a new car (even though I could afford to)
By the time I was finally able to quit my job, my wife and I did something that you might consider strange but that illustrates our commitment to making it to financial independence fast. By that time, we had paid off one car and all our consumer debt had gone. But we still had one car loan. Now that I was home all the time, we felt we didn’t need the second car anymore. Instead of upgrading the first car, a seven year-old Geo Prizm, we sold the one year-old nice car to get rid of the car payment. While the neighbors might have talked, we didn’t care, and it didn’t feel like a sacrifice to us.
We still had a car. We still could get to and from wherever we wanted. My wife and I are inseparable, so we didn’t need a second car. Wherever we went, we went together anyway. Why have a second payment that is not needed? For us, it made sense to eliminate that extra payment and reduce our monthly total expenses. It made us see the path to financial independence more clearly. It made it more achievable, and it made the step to quit my job easier and less scary. You know what? We kept driving that Geo Prizm for another four years. We probably would still be driving it if I had not totaled it in a small accident. It is easy to total a car that is only worth $2,500!
By the time the Geo was ready to go, we had built enough Temporary Cash and Forever Cash so that we could go from a Geo to a BMW X5 with all bells and whistles (and buy it with cash).
Even now, once that car is paid off instead of getting a new one we will probably just extend the warranty and save a whole lot of money.