One thing that I see constantly ruin people’s finances is buying a car that is way too expensive for them.  All you really need a car for is to get you from point A to point B in a timely, reliable manner with a side of comfort and safety.  How much time to you actually spend in your car?  An hour a day?  How much do you spend in your office chair?  8 hours a day?  Maybe you should spend thousands on a sweet office chair rather than your sweet car that you only use a little each day.

Your need for speed will quickly eat away at your savings.  Faster cars are usually less gas efficient, and your gas bill will simply increase.  You get a few tickets or accidents, and the expenses quickly add up.  You have to pay a few hundred for the ticket itself, take some time off work for traffic school, and also pay more for your insurance for the next three years.  Start buying some more performance parts and you are really starting to hurt.

If one of your hobbies is cars, and you actually have the spare change to lose on your interests, by all means, enjoy yourself.  However, if you are justifying buying a money-pit because you need a car to get to work, consider buying some used sub-compact.

This entry was posted on Monday, December 1st, 2008 at 2:29 pm and is filed under Budgeting, Insurance, Long Term Cash, Short Term Cash. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.