My biggest philosophy in personal finance is front loading your life. But I'm not perfect. I've hinted at my first car purchase, but let me go into more detail about it.
This single purchase probably set me back $10,000 to $20,000 more than it should have, at a time when I didn't need to waste that money. It was about 8 years ago, and if I had that extra $20,000, it could have easily grown into $25,000 or $30,000, if not more! That single transaction could have cost me $10,000 more today!
Here's my story of failure. Share your's in the comments!
Why I Failed When Buying My First Car
The bottom line was simple: I should have bought a used car, but I purchased it new. But I had just graduated college and I had a good paying job. I wanted to reward myself. Prior to buying my new car, I had a beat up old car. And before that car, I had a really beat up and really old car. I'd never spent more than $10,000 on a car – which was smart. I didn't need to spend more than that!
My ego got the best of me, and even though I negotiated hard and purchased the new car below invoice, I still spent about $30,000 when I didn't need to. And to pay for it? I had to take out a car loan. I could afford it, but I shouldn't have done it. The loan was $718 per month, paying the car off in 3 years.
Expensive Lesson Learned
On one hand, I've had the car for seven years without a single problem. On the other, I paid a lot for it, when I didn't need to.
My point is, I should have waited a little long after graduation to make such a big purchase and paid down my student loans instead. I was paying $718 per month on my car payment! I could have been paying that towards my student loans or saving for a house.
Yes, I did achieve both of those goals, but it took longer. Or maybe I could have bought a more expensive house? Who knows. The point is, I failed at front loading and it wasn't the end of the world. It's not the end of the world for you either.
Have you failed in front loading your life? Share your story below!