Where the Real Savings Are
It makes sense to manage even the smallest day-to-day expenses, but if you really want to maximize your money, look to your big-ticket items. That's the message of an article in the February issue of Money magazine, which said that trade-offs in what you drive (think Honda instead of Acura), where your kids go to college (think State U instead of Stanford), and where you vacation (think Mexico instead of Milan) will have a much bigger impact on your financial health than limiting your lattes.
Matt's View
Do you get excited about "$5 pizza day" at your supermarket but buy a new car every four or five years? One of the most effective steps toward living with financial margin is keeping our cars longer. Doing so enables us to break the cycle of financing cars. One-third of today's car buyers owe more on their trade-in than it's worth. Oftentimes, they roll that amount into their new loan, getting themselves ever more deeply into vehicle debt.
Keeping cars longer enables us to pay them off and then save to buy our next car with cash. With the added margin of not having a car payment we can build savings. That enables us to lower insurance costs by raising deductibles, creating even more margin.
Don't get me wrong--I'm a big fan of $5 pizza day. But I'm an even bigger fan of being both penny wise and pound wise!
Managing Money by The Book
- "To keep me from becoming conceited because of these surpassingly great revelations, there was given me a thorn in my flesh, a messenger of Satan, to torment me. Three times I pleaded with the Lord to take it away from me. But he said to me, 'My grace is sufficient for you, for my power is made perfect in weakness.'" - 2 Corinthians 12:7-9
Recommended Resources
- Debt-Proof The Holidays
- As we cling to the last bits of summer, the holidays may seem a long way off. But they're not. And if we are to navigate the holidays without going into debt, now's the time to develop a plan. Mary...…Read the rest
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