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 eight 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 yours 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 three 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 longer 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!
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.