I don’t do too many miles in my car and hardly ever drive on the motorway, but we do take it for granted that must have a car these days. Running a car gets more expensive all the time and just about everything else is too. To survive in these tough economic times we have to be thrifty and frugal and that applies to everything, even running the car. When I bought my car, I had done the research and went for one 7 years old that was in good condition and was low mileage. I didn’t really care that it wasn’t the latest model or registration. We do tend to be brainwashed into thinking we must have the latest model, the latest fashions, the latest smart phone…
I bought my car for cash in a private sale and negotiated a lower price than the seller wanted. I would have had to pay 50% more in a showroom and double if I bought from a showroom using finance. People waste so much money on finance and interest payments. I buy goods and services with my money, I can’t eat interest payments. I like to get interest on the money I’ve saved not pay it out! The cost of running the car has to be considered and a big portion of that is depreciation. I have had my car for 8 years and it’s still reliable enough to drive on the motorway. Because it was low mileage, maintenance has been cheap. Depreciation has worked out to about £300 a year, so far and compared to thousands some people pay, that is very frugal. My car insurance is due in about 4 weeks time and I have saved the money to pay it. There is an option to pay monthly, but why pay an extra £50 to pay monthly? The same applies to car excise licence, I could tax the thing for 6 months and pay extra, but I’ll tax it for a year; the most thrifty option. My car does cost a lot in fuel, but I wanted a car that was roomy and easy to get in and out of. Some larger cars are bargains, but cost more to tax and aren’t so economical on fuel. What I lose on those costs; I gain on low depreciation and maintenance costs. A large car can make sense if you do low mileage like me.
Everything we save money on, leaves us that little bit more to enjoy ourselves with and despite what some politicians think, we should all enjoy ourselves and have at least some pleasure. I’m trying to get used to travelling again after being ill. I would like a holiday and that would involve a lot of motorway driving, so I’m trying to get used to it again. The motorway near me tends to be the most congested in the country though!
Most of the money people waste is on finance, even ‘interest free’ credit isn’t really ‘interest free’, the interest is simply added to the price. Look at how much interest you pay on credit cards, loans and so on and think what else you could spend that money on. We also get brainwashed into being dedicated followers of fashion. The must-haves include everything from smart phones to false eyelashes and tattoos. If you can afford to pay cash for the latest fashions then indulge yourself. But why buy the latest fashion and interest on credit too? I bought designer underwear last week, for cash and a voucher; I got 10% off! I can afford Pierre Cardin and so why not? I’m not a slave to fashion, some of my jeans were 4 pairs for ten pounds!
I also like to receive interest, rather than pay it. I have an account with Zopa and that is giving me an above inflation return on savings. You can see a link to Zopa (peer to peer lending) in the sidebar. The average saving in the UK is around £2,500, put that into Zopa and you have around £130 in interest a year extra to spend. That is more than banks will give you. You can also change that interest rate if rates go up in the future. The rate isn’t fixed for years, as the banks ask you to do with their ‘bonds’.
I shall be going to Aldi today and looking for bargains on food. They sell non-food products, but I am rarely tempted unless it’s something I need. There is a difference between need and want. Buy what you need, not what you want. Buy what you can afford now, don’t use finance and credit to store up debts that will be a burden in the future.
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