Sometimes the balance between frugal living and actually enjoying life is a very fine line. For the longest time, I’ve saved every last penny that I could. Finally, I decided that I would splurge on something that I’ve been wanting for a few years now.
I wanted a new car. Now, I didn’t go out and buy some crazy expensive lifted truck with huge tires – even though I would love to. I got a practical SUV. It still got good gas mileage. It was an even trade for me; I got something new but I got something that wouldn’t make me go broke paying for the gas.
I guess the point I’m trying to make is that sometimes you have to give yourself permission to spend money on something that makes you happy. It may sound silly but, every time I get into my car to go to work I smile. Every time I hear the little “beep beep” when I lock my Jeep, it makes me smile. Although I have a car payment now that I haven’t had in five years…
Yes, I could have waited for another three years until I could buy it with cash. But here’s the secret- I just didn’t want to and I’m OK with that. I’m still doing just fine saving money, and putting away over 20% of my income towards retirement. I still have a cushion every month, I still have my emergency fund, and I’m still completely financially stable. But, now I have this little thing that puts a smile on my face. I know this goes against so many things that I believe in when it comes to frugal living and a frugal lifestyle. But I don’t do all the other little things that people do that waste money. So, I decided to let myself just have this one thing. (On a side note – my car insurance actually went down; so that was exciting!)
I share all this with you to say that sometimes, to keep yourself on track with the bigger financial goals in your life, it’s OK to set yourself back just a little bit. Just enough to keep that motivation going. Even though I have a $380 car payment now, I’m pushing even harder to save money and put money away for retirement. The whole point of being financially independent isn’t to squeak by and have nothing fun in your life. The goal is to balance spending and saving so that you can spend things on what you want to spend them on, and have less worry about the things that you have to spend money on.
Tips Before You Splurge
- Before you splurge, you need to make sure you are putting enough money towards things that are truly important. You should already have completed at least steps 1 through 5 of Dave Ramsey’s 7 Baby Steps. (I live by these.)
- $1000 in your emergency fund.
- Pay off all debt but the house.
- Have 3-6 months’ worth of expenses in your savings account.
- Invest 15% of household income in retirement each month.
- Get a college fund set up for your kids.
- Pay off that mortgage.
- Build wealth and give!
- Go over your budget to see how much money you have with no specific purpose. Try to make your monthly payment of no more than 50% of your “extra” cash.
Tips for When You Splurge on a Car
- Go onto Truecar and get a “no-haggle” price that the dealer has to honor. It will get you any of the dealership and manufacturer rebates built-in plus about $500 more in savings. All you have to do is choose the exact vehicle you want on the website, put in your location, and it will match you with dealerships that participate and have that vehicle. You show the dealership your “savings certificate” and you get that price. But, make sure all of the “extra” features are the same. If you get to the dealership and see a different car you want, you can go on the website/mobile app and put that specification in, and get a new savings certificate. (That is what I had to do).
- Get a USAA bank account and finance through them and/or use their Auto buying program. This will send you to the Truecar website and you can get even more discounts automatically.
- Go to the dealership at the end of the year or the end of the month. This is when they are more desperate to get you to buy. If they want the sale more than you do, you have leverage.
What do you think? Was I crazy to take on this debt? Do you think it was wise or even OK? Let me know in the comments.