Of all my parents’ advice that I’ve willfully ignored, this one is about to become very significant to me:
Never be car-poor.
“Car-poor”, as defined by my parents, is the state of being shackled to “too much car” and all the associated costs.
Besides the obvious– monthly car payments– keep in mind the other operating costs of a car: taxes, registration, and insurance. The newer and more expensive the car, the higher those other costs will be in proportion.
My folks didn’t believe in financing vehicles. They always picked out solid used cars (often 4-5 year-old vehicles coming off lease) and paid for them outright with cash.
How could they afford to pay cash for cars? In short, they saved their money. In between cars, they put aside the money they would have spent on a car payment each month… and when it was time to replace the current car, they had a nice chunk of cash available.
My dad often told me that the best position is “Have a car to get you to work… don’t work just to have a car.” Read that again. There’s a fine distinction that most people don’t seem to get: The car should support the job; the job shouldn’t support the car.
When I need to replace MyRage (pet name for my Mitsubishi Mirage), I will buy something solid and reliable… with cash.