> Personal finance experts love to discuss how much money you can save by avoiding that daily Starbucks habit or packing a brown bag lunch every day at the office. While I guess you could add to your bottom line somewhat by cutting back on the little things (a) this stuff doesn’t move the needle all that much, (b) it’s the little things in life that can give you small joys on a daily basis and (c) the large purchases will have a much greater impact on your bottom line.
This is also a big difference I've noticed between a "rich dad, poor dad" mindset. Sweating the small stuff doesn't make much of the difference in the end, it's the much less frequent but more impactful decisions (where you live, who you marry, the car you buy) that determines your overall financial well-being.
Not defending the alternate mindset per se (my wife and I have a 2006 car, and a 2011 we bought used), but I can understand how it arises from the fixed costs of changing those things.
Some people are truly reckless, but others end up in a situation where they don't forecast perfectly (pay cuts, unanticipated expenses). Downsizing your house is a huge change and a car loan lasts five years. If you're putting 15% towards savings/debt and want to bump that up (or worse: draining your savings by a little bit each month), you can cut back on short-term expenses immediately.
That’s why my wife and I have adopted a strategy of living on only one of our incomes, and saving and investing the other.
I realize we are in a position to do so in that we are both career focused and make enough together that we can afford to do so. If we were working minimum wage jobs, this wouldn’t work.
But I imagine that’s the case for a lot of folks on this forum. Certainly many are single, but for those that aren’t, it’s lkkely true.
What this has enabled us to do is both work for a series of startups. Also, we aren’t interested in kids, but it leaves us with the option if things change. Or, god forbid, one of us were to get sick or be injured.
Living to the hilt as a DINK sounds like a disaster waiting to happen.
you can cut back on short-term expenses immediately.
Can definitely agree with that. There's hundreds or even a thousand or two on the table with phone bills, insurance of all kinds, etc and even those are trivial to change up compared to a house or car sale.
There's no significance really. It's just a stereotypical lunch bag. I think most people use coolers these days, but back in the day you'd pack your sandwhich, chips, and drink in a brown paper bag to take to work.
It's just a generic term for a (usually low-cost) packed lunch from home, as opposed to going out and eating for lunch. It comes from how cheap lunches were packed in a brown paper back in the old days.
Brown bags are the classic container used to pack a lunch for a child attending school in the US. That practice dates back many generations, although I'm sure it's becoming rare in the last few decades.
in the context of a lunch container it conveys "nothing special", inexpensive, utilitarian, practical as opposed to fancy , expensive, extravagant "three martini" lunch
Except they're wrong. Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. If you keep your car for 10 years, $5/day is $18k. Our current cars are 13 years, and 17 years old.
This article [1] was the top google result when I searched "average car ownership length". It reports 79.3 months is the average length that Americans own a vehicle, so a little more than 6 and 1/2 years. Paying more for a vehicle makes sense if you own it longer (or otherwise get more value out of it).
I think the problem is that people both buy $5 coffee/day AND buy large, expensive to own and maintain vehicles AND replace those vehicles too often.
Another way to put that would be to say that if you buy used instead of new, you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!).
There's nothing wrong with having good personal discipline, but the notion that you can scrimp your way to wealth by eschewing $5 daily coffees is absurd.
Not to mention, that's $5 daily coffees and...nothing else, as there's usually not a second thing you can cut back on in these preposterous examples, and once you've cut back the coffee once, that's it.
One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. It's not "disciplined" but it'd be a hell of a lot easier for me to be disciplined with my fancy life full of excess.
> you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!).
It's not a $5 daily coffee, it's 2 or 3 $2 coffees. 2 reasonably priced coffees isn't so insane if your workplace doesn't have a machine and won't let you donate one.
> One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard.
THIS. I spent five years in poverty. Sometimes actually, sometimes just above the line. Always worried about making rent.
Eschewing a twice-weekly visit to the coffee shop is a LOT easier, psychologically, when it's not "my only reprieve from eating shitty food in a shitty apartment and still worrying about how we'll pay the grocery bills and rent".
And I had the benefiting of knowing that the situation was temporary and it could all be over the moment I decided I had had enough. And a great parental safety net that saved me from the credit card debt treadmill more than once. I can't imagine how bleak things are existing like that with no safety and knowing you don't have an out.
My daughter works at Starbucks. There is a shocking (to me) contingent of people who do indeed order $4-7 coffee-based drinks daily. She sees the same people every day. It's mind-bending to me, but clearly normal for many.
I'm one of those people (though, not starbucks). It's a drink I can't get without relatively expensive equipment and effort at home. It's a chance to catch up with news without the expectation of being on call for work or feeling like I should be doing something productive around the house. It's a moment of calm before going in to chaos, err, work.
It's also a chance to socialize, with no expectations, with other regulars.
I visit Bluebottle and probably spend $6 almost every day I work. Does it add up? Not really. Assuming I visit 220 times a year it's almost 1.5 years before I've spent as much as I do on 1 months rent.
If you're making $100/ week, $30 on coffee is a lot of money. If you're making $2k/ week, it's not moving the needle in a meaningful way.
My original comment sounded judgmental, and I don't mean to be. I'm just surprised, but everybody gets to choose their own priorities and interests. I can't imagine spending that much on a coffee drink daily, or spending $1500/year on coffee. I also can't relate to people who spend a lot of money on cars, especially high-maintenance cars, or any number of other expenses.
But me, I might spend close to that amount on graphic novels, or on graphic novels and paperback books combined. I make larger purchases less often, and many people might consider my expenditures wasteful as well.
I suspect many people spending $6/day on coffee have never counted the cost, and might be surprised to realize that they're spending $120/month on coffee. But you've done the math and find it worthwhile, so good for you!
I am guilty of this, except with Dunkin. Over the last few years, I have purchased at least five coffee machines trying to make coffee that is as good but I haven't been able to. I am a coffee addict; if I don't have coffee in the morning, I get a headache.
Buying a new SUV every 3 years and paying taxes on every transaction quickly get's to vastly more than 18k/decade. Remember, you can change both car type and new vs used.
New mid range SUV's can easily end up costing more than 100,000$ over a decade. Even cars can get insane. I just watched a view on a guy who spent 28,000$ owning an Aston Martin for 10 MONTHS. https://www.youtube.com/watch?v=hrrFAjxKtj0
My daughter works at Starbucks. The answer is: many people, many more than you think until you're there every day seeing them. And it's $4-7 coffee-based drinks.
Pro tip: their dark/specialty roasts for which they have a sign up (and often have ready to go mornings) can be had as a pourover for no extra charge. (Don't let them upsell you to the Clover). I don't like their basic Pike's roast.
There is an elementary school down the street from the local Starbucks. After school, kids by the dozens routinely buy $4-7 drinks, especially iced.
If you order the regular coffee you get it right away, pretty much while you are paying. The fact that most of the people you see waiting are the ones who ordered the fancier drinks is because of selection bias.
+this. High savings is made from a collection of good habits (or avoided pitfalls), not just one. It's easy to spend 36k over 10 years on lunch+coffee ($10/day). It's easy to spend 36k on a car that you will use for 10 years. Same ballpark, same opportunity for optimization.
> High savings is made from a collection of good habits (or avoided pitfalls), not just one.
Correct. The whole point of the "stop buying lunch out every day" is not to never do it, but to develop good financial habits and to show you that small changes, taken over a long period, pay off.
I bring my lunch almost every day. I actually do it because it is one less thing I have to think about during the day (having to decide where to go and then either walk or drive there). But the numbers pay off too. Assuming $10 a day for lunch, that's $50 a week or $2,600 a year. The cost of bread, lunch meat, condiments, etc is about $10 a week for me or $520 a year. You save more than $2k a year by not eating out every day.
For most people, that is not an insignificant amount of money. That's enough for a nice little vacation. Now, you actual amount will be less, because everyone splurges occasionally. But little vampire costs like daily lunches or coffees do add up and if you look around your life there are probably a lot more of them than you realize.
Should people not buy stupidly expensive cars they likely cannot afford? Yup. But that doesn't negate the broader point that people should look at the larger financial picture.
When my GF was out of work after 2008 I would give her a couple of dollars to go hang out at the coffee shop every morning with her friends. Because she needed that to a) stay sane. b) pick up occasional side jobs.
Operationally there is zero difference between a new and used car. One thing about cars, price is about a quarter to a third the cost of running one. A used F150 or baby BMW will cost you more than a new Toyota Yaris over five years.
This reminds me of a silly joke. 2 friends are talking, one of them has just lit a cigarette.
-"Dude, how much do you smoke? And do you like porsche cars?"
-"Around a pack a day. And yeah mate, I love em!"
-"Dude a pack per day costs $12. If you stop smoking, you can buy a porsche in under 10 years just from the savings from cigarettes alone..."
-"Oh damn, never thought of that. Do you smoke?"
-"No, never!"
-"So, where is your porsche parked?"
-----
Now jokes aside. Unless you work towards a goal (eg new laptop at the end of the year), and you actively keep track of the extra savings it's very easy to blow the $4 saved per day on a whim, without even realizing. Your mindset changes to "I can buy drinks for my friends, I 've been saving this week it's cool", and you end up where you started. And that's fine, there is happiness to be had over buying your friends a drink.
I think they'd have about the same number of customers -- most people I know who lease their car just want to drive something new and not put much effort in to maintaining it. They don't really car about the long term financial downside.
Sheesh, you can buy three new cars or a starter home (in some places), that's how expensive new cars are these days.
Auto loans also require you to carry full coverage insurance, which can be the same or more than your car payment if the loan is less than $20,000.
Personally, I can't stomach the idea of paying $500-700/mo for a used vehicle.
My current daily is a 2005 Chevy Aveo, I've owned it about 6 years and my total monthly cost (car, insurance, fuel, maintenance) is under $200/mo. It's a budget box, no frills, and I do all my own repairs and maintenance, and you can too! Youtube is a great resource and cheap hand tools can be found at Harbor Freight. Anyone who tells you that modern vehicles can't be maintained at home is mistaken, most maintenance tasks require no special tools and many repairs are attainable with limited skill and experience.
I think my favorite part of the article is this quote: "Personal finance experts love to discuss how much money you can save by avoiding that daily Starbucks habit or packing a brown bag lunch every day at the office." followed by "this stuff doesn’t move the needle all that much"
I think that buying SUVs are more of a symptom of the problem than the cause. Sure they're expensive to buy, insure, and maintain - but most drivers I see are the only one in their vehicle. People aren't doing what is practical, they're doing what makes comfortable now.
I found this article interesting because I couldn't for the life of me understand why so many people spend so much money on their cars. For me, a car was just a convenient way to get to where I wanted to go. My ego wasn't tied up in at all. I didn't own a car as a way to show off my status. I drove a series of "beaters" and often did my own maintenance and repair of relatively simple issues. I finally bought exactly one new car for cash, and drove it for twelve years.
I never carried collision or comprehensive insurance, having the opinion that dealing with insurance is always a pain in the ass. The insurance premium is simply a markup on the expected value of what the insurance company would pay out. My "inner mathematician" couldn't permit it.
Because of this, my total cost of ownership of cars was really low. I piled all the money I saved into investing, and came out far ahead.
I sold my last car when I retired. Now, I walk everywhere: to the supermarket, to the park, to the gym, to restaurants, to the downtown bars. I'm so glad not to own a car.
>I never carried collision or comprehensive insurance, having the opinion that dealing with insurance is always a pain in the ass. The insurance premium is simply a markup on the expected value of what the insurance company would pay out. My "inner mathematician" couldn't permit it.
so what do you do if you drive to work, and you total your car? do you have the cash on hand for a replacement car?
I see "runners" on Craigslist all the time for around $1500, I'd say that's the bottom dollar for something that you can probably drive for a year without serious mechanical failures. However, used is always a gamble (at any cost) so if you're buying cheap, make sure parts are cheap too. Just because you can get a 2000s+ BMW for $3k doesn't mean you should!
The latter two sound like business uses. The article is about personal use of personal vehicles.
> Kids, gear
Even then, a sedan or utility/mini van can do the job at much lower costs.
> boats, ATVs
Boats and ATVs are also good examples of money pits that prevent people from saving for retirement.
(Especially boats. I looked into buy one, and quickly noticed that I'd have to be on the lake like half of in-season weekends and/or use all my vacation during the summer before ownership beat renting. But I'm only on the lake a few weekends a year, and even then only need/want something other than a kayak maybe every other visit.)
And again, the conclusion of the article is "But if you’re one of the many people who are woefully unprepared for retirement or any of your other saving goals, a good place to start would be cutting back on any unnecessary spending on transportation."
If you're on track to retire, go ahead and buy that nice car/boat/etc. But if not, maybe consider cheaper alternatives.
> The latter two sound like business uses. The article is about personal use of personal vehicles.
They are personal uses.
> Even then, a sedan or utility/mini van can do the job at much lower costs.
Sure, if your gear is a stroller and grocery bags. Sedans and utility/mini vans can't go offroad easily. I don't mean something like slopping through mud or a river - I mean traveling through mountain passes or campground roads can be a huge pain in the butt (if not impossible).
> Boats and ATVs are also good examples of money pits that prevent people from saving for retirement.
They definitely can be. Not all boats are massive ski boats - even towing 8ft john boats and kayaks (which can both be had for less than $1000) is easier on a trailer which can wreak havoc on sedan transmissions (if they even have a tow hitch at all). ATVs are super useful for maintaining property, animals, fences, etc, not just riding dirt trails.
> And again, the conclusion of the article is [snip]
And I totally agree with the article. I was providing real-world examples of things that folks use vehicles for that a sedan/beater/minivan would not be a great tool for for the original parent.
My kid is in 4-H, she shows goats and rides horses. Most folks have big trucks to pull their big trailers. Not all livestock and lumber is for business, rural communities still exist!
Lumber you might need if you're into DIY, I suppose, or you're collecting it for your fire. Livestock? - well, which person here has the unusual edge case, I wonder...
If you truly need it every weekend, that's a very legitimate reason to buy such a vehicle, if you can't afford the money/room for a smaller commute-friendly vehicle, or similar reasons.
I'm talking about the people who maybe need it once or twice a year, or like to imagine themselves needing it, when in fact they really don't.
Very good point. For some reason my brain equates a beater with an old or abused sedan. Seeing a beat up truck makes me think the truck was used well vs a beat up sedan that was not taken care of. My bias showing through, sorry!
What other types of insurance did your inner mathematician prevent you from getting? Did you also skip out on health insurance because the premiums are a markup on the expected value of your health care costs?
The difference is that health insurance has an enormous upper limit on what it can save you. You rarely want to spend money for insurance on things you can eat the cost of. You want to spend insurance money on things you can't afford, and health care often meets that criterion. Plus, if it's employer sponsored, you're getting it at a substantial discount.
Financially, insurance is only a smart purchase if you
1. Cannot afford the worst-case-scenario. (Example: replace your car if it were totaled)
2. You expect the return from claims will exceed the cost of premiums/deductibles. This should never happen if insurance companies are savvy and want to be profitable.
Large companies with a vehicle fleet often self-insure those vehicles (AT&T last I heard) because they can afford every vehicle worst-case-scenario (ignoring liability, which is a legal obligation).
Socially/emotionally, insurance is a peace of mind which is important and valuable to some people. Security and all that.
His car is less than 10k, its simply not worth the insurance on somethat that at best covers around 90% of the value. Other insurance covers hundred of thousands for not much more the price cost.
I believe it's not just tax free, right, it's just priced into your salary. They won't give you the employer contribution back as cash if you decline, will they?
But it's better/worse than that. Because they won't pay you $55k if you decline healthcare. Instead, you get paid $50k with the option to get healthcare (take it or leave it).
My family's insurance healthcare isn't tax-free, which would mean saving $2k or $3k or whatever. It's over $10k of insurance a year that I pay less than $2k for.
Some people obviously have a genuine need for a larger vehicle. Those people usually don't spring for the blingmobiles.
To a lot of people, their cars and or other material belongings are outwardly visible extensions of their (imagined) personality, and signifiers of wealth to their peers. It's just a different set of values.
Personally I absolutely love cars. Not for any status or macho identity, but for the mechanical intricacies and neat design ideas. I am much more interested in a 1970s Opel Kadett than a big new Mercedes or something. I enjoy the act of driving, not the idea that "I am driving something expensive that other people desire".
Have you considered cycling instead of walking? It's cheap and there are so many opportunities to geek out over neat ideas.
> Some people obviously have a genuine need for a larger vehicle. Those people usually don't spring for the blingmobiles.
Eh, I've seen people in construction/trades buying "utility blingmobiles". They need a big truck, but what they buy is bigger and nicer than what they really need. It's the equivalent of buying a $10,000 workstation to do web development (you can, surprisingly, run slack on a lesser machine).
The insurance premium is simply a markup on the expected value of what the insurance company would pay out. My "inner mathematician" couldn't permit it.
Is that not true of all insurance? Does this mean you go through life with only whatever legal minimum of insurance is required in any given circumstance?
That's how I do things. Insurance has generally proven not to be worth it, in my experience; they always find some way to not pay - so I only pay for the insurance I'm required to have. It's just another tax.
There are states (I don't know how common) that require a base amount of insurance, so perhaps you were "lucky" in this regard that you didn't have to carry that cost.
This article is missing a huge and expensive market segment - 4 door pick-up trucks. I was at the dealer last week and found lots of pick-ups in the 55-70k price range. They are seemingly popular here and I get the appeal especially if you want to just toss all your stuff in the back and hit the mountains, but they usually get worse mileage than a SUV and cost just as much.
Depending on where you live, pick-ups are not just handy but rather a cultural icon. Have you ever listened to country music? You're not a real country boy if you don't have a pick-up.
The real bait-and-switch though is the disappearing low & middle end of the pick-up market. Pops working the farm didn't drive a $70k luxury F-150. But gone is the Ranger, 1st gen Tacoma, and the much cheaper rough-and-tumble F-series of twenty years ago.
gascan nails it here - trucks have been slowly transforming into luxury vehicles. I bought a used F-150 quad cab and paid half what my ladyfriend paid for her Nissan Murano. But, I also had the "luxury" of being in farm country where there are still lots of people who want a basic, stripped down model for work and thus there is inventory available.
Also - take a look at the new aluminum body F-150s re: gas milage. There has been a significant jump there.
Here in the suburban west they've become replacements for SUVs - for hauling kids to soccer. People have them because it's either a culture thing for them or it makes it a lot easier to haul gear skiing or camping (I live in Colorado). I only know 1 person with an actual work truck and about 5 with kid-haulers.
> Personal finance experts love to discuss how much money you can save by avoiding that daily Starbucks habit or packing a brown bag lunch every day at the office.
I actually think the true long term cost savings is in health care costs and general personal health. Making food yourself will cut down on excess salt, sugar and fats which are so prevalent when eating out. This will certainly help you stay healthy in the long run.
That being said, almost all cars are a financial loss and you'd be better off driving a 2000s civic. I always found it ironic that Michigan was loathe to pay for plowing but instead just bought SUVs.
"avoid the"..."insane initial depreciation that exists with new cars."
This is a strange statement, because of course lease pricing is nothing more than paying for the depreciation of the vehicle. Not only are you paying for it over the term, the risks if you want to terminate earlier, after the worst of the depreciation, are identical if not even exaggerated with leasing.
It can be a good choice, especially for businesses because it greatly simplifies accounting for vehicles (just an expense and nothing more), but when people differentiate owning from leasing some strange statements are oft made.
The 15+yr list has as much or more to do with buyer demographics and consumer behavior as it does to do with actual reliability and value. It's basically a reflection of what vehicles just wound up being popular among demographics that are easy on equipment (the wealthy, the old, etc) 15yr ago.
It's also worth mentioning that when you own the car you need to strike a balance between average use and peak use. Most of the people commuting in crew cab trucks are going to use the second row once a week (same goes for sedans) and the bed once a month. Compared to a owning a smart car and renting a nice sedan for a road trip once a year, taking a taxi a few times a month and paying for delivery/rental trucks it probably doesn't come out even but it's not the massive waste of money it seems like at face value and some of that can be attributed to people wanting luxury (sticking a fridge in the back of a truck is easier than strapping it to a car, having two rows of seating is much more pleasant than once bench for 3+ people). This applies to any excess capacity, it's just most obvious with trucks. Sizing for close to peak needs is why crossovers and SUVs are so popular. They can comfortably fit the family and/or a bunch of stuff. You might not need to do that every week but many people do it often enough to feel justified in springing for the luxury.
If you want to see less massive vehicles on the road then stop acting like you're too good to cram X+1 people in a vehicle that officially seats X or strap stuff to the roof. People buy trucks on the justification that they will haul homeowner sized amounts of lumber or crossovers for a family with two/three kids because they perceive putting three kids in the back seat of a compact and sticking a Christmas tree on the roof to not be in accordance with how someone of their income level is supposed to act.
I feel like it's a bit disingenuous to talk about this in the context of 1) paying MSRP and 2) buying new.
He even mentions the second point, then goes on to completely ignore it:
- Never buy new.
- Just buy something 2-3 years old after it comes off someone else’s lease.
A quick look on Kelley Blue Book says that $51,790 Ford Expedition drops to $24,925 after 3 years and 55,000 miles. Using the same parameters for the loan comes out to payments of $418 per month.
That's still a chunk, but it doesn't have quite the same shock value as the brand-new MSRP prices presented...
Now, $418/mo is still a far cry from the $165/mo you can get out of a lowend, 3-year-old Kia Rio, for sure. I drive something similar now. But the article still kind of rubs me the wrong way...
I just bought a new Subaru for about $24,000. A 3 year used in an identical package ran about $19,800. For that level of a price difference I couldn't justify going used, with some likely impending mechanical issues and effectively no warranty.
If I had financed, the used car payment payment is actually far higher - about $577 vs $432 because of the shorter loan duration (yes, total cost is still lower).
It's one of those "/r/askreddit-style" pieces of gospel that people endlessly parrot without ever testing if it's still true, or at least realizing the truth is a lot more complicated.
It's not just the extra 250$/month it's also going from 29 city / 37 highway to 17 city / 24 highway plus higher taxes, insurance, and maintenance costs.
Compound this with a family having 2 cars and a couple could be looking at ~2,000$ / month less in retirement. Which for many people would be the difference between comfortable and not.
Just to get this out there from the start: I don't like cars much, and I view them not just as an expense to be minimized, but a life unpleasantness to be minimized. Cars are horrendously expensive and I don't really like parking them, worrying about where I parked them, paying for parking for them, or not being able to have another beer because I'm driving them.
But I do surf and my kids love to fish and ride their bmx bikes in nifty places that are most easily accessed with a car, and I'm cool with that, so I look to balance the lowest cost and lowest hassle way to do that. We do plenty around the neighborhood, but can't do it all around the neighborhood. At least not yet.
So far, the right balance, I've found, is to buy a new car with a reputation for value and reliability. I accept that this isn't the most optimal possibility, but I've always been suspicious of the claim that a car loses x% of its value the moment it drives off the lot. Oh, I certainly agree that this is the case if you want to sell it, but that's hardly just true for cars. Go buy a thousand dollar suit and try to sell it on the street right outside the store where you bought it. It'll lose a lot more value than the car.
But here's the thing, try to buy that car (or that suit) at an x% discount from someone who just drove it off the lot. Even if you can, you might worry (well, I might) about what the hell is going on. It's just... weird.
Ok, so a year or two after it was bought new? Eh, I'm still not convinced. I suppose there are good deals out there, especially around people who dump cars after the lease, but even then, people often don't sell high quality cars that are only 2-3 years old. They sell cars they don't want anymore, and sure, that might be because they aren't brand new and shiny, but you often end up buying problems.
Could just be me. I've had bad experiences buying used cars and good experience buying new cars that I take very good care of for the life of the car. I certainly don't sell it at 3-4 years old, that's when the car is most valuable to me. It's a 3-4 year old car that I know is in great shape and has been cared for properly. I don't know if that is the case with a car that someone planned to dump at the end of the lease (or is selling cause... not sure why). You can have a great experience buying a used car, and on average it probably does work out to be less expensive but I don't like the uncertainty and variance.
Beyond that, I lust for the day I no longer own a car. Kid pick ups and drop offs still make it on the balance better to own one, but it's getting close. Maintenance, gas, parking fees (high in SF where I work), payments (or the lost value of the investment)... even if I buy a sensible car and take care of it and keep it for 10-15 years (until the maintenance costs exceed the value of the car), we're still probably looking at, what $4-6k a year, at least? That includes my very high parking costs. For others, it would be lower. This is when you make an effort to keep the costs down over the lifetime of the car (buying a quality car with a focus on value not luxury and keeping it for the usable life of the car).
I mean, seriously, you can take a lot of ride share for $5k a year. I'm starting to see some interesting things happening - like, I read about a surfing "club" with a monthly fee that has showers and boards and wetsuits and a lounge near the beach. If you're happy just surfing that one break, you could ditch the car and get a ride service, and even if you live a ways from the beach... 5k is a hell of a lot to work with.
Still, some major limitations. But man, I seriously mean it, I drool at the idea of getting rid of cars in my life.
I would like to see a similar analysis applied to living and working in Silicon Valley or San Francisco, as opposed to some metro area in the Midwest. I have a hunch that given two similar people, one in each place, with similar careers, financial habits, consumer habits, etc., the one in the Midwest will be able to retire sooner and more comfortably than the one in SV/SF.
> Personal finance experts love to discuss how much money you can save by avoiding that daily Starbucks habit or packing a brown bag lunch every day at the office. While I guess you could add to your bottom line somewhat by cutting back on the little things (a) this stuff doesn’t move the needle all that much, (b) it’s the little things in life that can give you small joys on a daily basis and (c) the large purchases will have a much greater impact on your bottom line.
This is also a big difference I've noticed between a "rich dad, poor dad" mindset. Sweating the small stuff doesn't make much of the difference in the end, it's the much less frequent but more impactful decisions (where you live, who you marry, the car you buy) that determines your overall financial well-being.