Living Below Your Means: The Paradigm Shift: Car Edition

Americans spend more money on automobiles than many other nations put together. Here are some tips to help decrease this trend.

Remember when you had just gotten married, or were still single and got your own place to live for the first time? Remember those years you spent scrimping, saving, and holding onto every penny you could just to make sure you would have enough for the next month? For most of us, those years are gone (not for me, not yet). However, there are some powerful lessons to be gained from those years of shaving off the unnecessary; these lessons are immediately and directly applicable to our lives today, and can enrich our futures. If you have a massive inheritance, infinite familial wealth, or a career that nets you more than you could ever spend, this article is not for you. If, however, you are a career-minded individual that defines yourself somewhere in the range of poverty-stricken to upper-middle class, then read on. Below, you will find tips to get you to that golden moment when you realize that you will never need to work again. If hard times come again, then you will find that you have more to weather the storm with than you otherwise might. The ideas presented here will help you arrive at that moment sooner and with a little more gold stockpiled away when you get there. While I live in the United States, the thoughts below are concepts that can be utilized by anyone in any nation. I wish you luck in securing financial freedom!

Everywhere I look, I see the same social paradigm: people just like you and me that are working to make a living, just scraping by no matter what their wages are. For some reason, the idea of the American Dream has been convoluted into having the appearance of financial freedom. We drive the best and biggest shiny new cars we can, we buy the most quality things we can afford, and we finance whatever TV or stereo system we can't immediately pay for just so we can have it now. Despite this massive propensity for spending, I can think of only one family out of the thousands that I know that has actually attained financial freedom.

In Nevada, there was a program known as Gifted and Talented Education (G.A.T.E. for short). It was basically a program for advanced placement students in elementary school. My teacher Ms. Howerton taught me a concept in the second grade that continues to help me think outside the box of my own narrow perspective: the paradigm shift. To illustrate this to the young minds she was instructing, she told us the following story. A fly was trying to find a way out of a house that it was trapped inside. It had reached a window, and it could see the way out, so it kept banging up against the window over and over again, trying to punch through and make it to where he wanted to be. Needless to say, the window won, and the fly eventually got tired of the heat of the sun and continual blunt trauma to the head, and he dropped to the floor and died. However, if the fly would have simply backed out of the window frame, he would have seen that there was an open door just a few yards away. He could then have flown out, and he would have been fine.

We Americans, being one of several consumer cultures, are just like the fly. We are stuck in the window frame of buying, buying, and still more buying. This article is about the open door: this door is making sacrifices and doing more with less. Every demographic, from the bottom to the top, is capable of saving more than they do, and I hope that you find value in the tips below. I have been told that my ideas mirror those of the noted talk show host and radio personality Clark Howard, and while I have never listened to his program, a cursory glance at the heading of his site ("Save More, Spend Less, and Avoid Rip-Offs") reveals that there is valuable information there as well.

The first and most obvious example of our own extravagance is what this first chapter is devoted to: our cars and automobiles. The idea of a driving culture is an American invention, and we have taken to throwing our dollars away toward that frame with four tires as a national pastime. We buy them big: Ford Excursions, Cadillac Escalades, Lincoln Navigators, and Hummer H2's. We buy them fast: Nissan 350Z's, Honda S2000's, Mitsubishi Lancer Evolutions, and Subaru Impreza WRX STIs. And most of all, we buy them expensive: Acuras, Lexus's, BMWs, Mercedes, Porsches, and the list goes on. Yet, with such a massive investment of money going into our automobiles, shouldn't they be a good investment? No. As everyone knows, automobiles depreciate the moment you take them off of the lot (with the exception of cars like the limited-edition Enzo and historical autos), and the 5 million or more accidents per year in the U.S. takes a gigantic dent out of the investment placed into our cars.

So, how do we escape this paradigm? There are a number of ways. In another article, I revealed the flaws involving the knee-jerk "Buy-A-Prius" reaction to rising gas costs. I proved that buying a new vehicle will NOT save you money at all; like any other purchase, buying a car represents a loss and not a savings. To illustrate, I will outline my own vehicular situation.

In 2004, my parents got me a 2001 Ford Explorer for a fantastic deal of about $5,800. The vehicle was a nice, pretty gold, and I loved it. It got roughly 17-18 miles per gallon, and it was rough on gas for me. This was especially true because I was a college student and I drove a lot from college to my military unit to home and back. When gas went up to $4-5 per gallon, I freaked out and briefly flirted with bicycling the 35 miles from home to school. Ok, not really. But it did hurt every time I had to put more than $80 dollars into the beast to fill up the 21-gallon tank. I seriously considered buying a diesel car and collecting fast food grease to power it with (it really works). It was, however, this time of panic about gas prices that made me search for everything I could do to decrease my fuel usage and ipso facto my carbon footprint. My father helped me swap out the Explorer's 3.55 rear-end ratio for a 3.08 (essentially, this decreases acceleration rate and ideally increases efficiency to a certain point by lowering RPM's at a given speed).

In the end, however, I discovered that it is much more worth my money to drive the vehicle I currently own until the end of its useful life. If you must have a new car, then you can buy the Toyota Prius or the Honda Civic. Vincentric has a great resource for new car buyers available here:

Interestingly, Vincentric's list reveals something interesting about our driving culture: it only considers cars that are cheap to drive for the first five years! This is the heart of the matter. Believe it or not, our country turns over cars at a fantastic rate, so most people only consider cars as a valuable commodity during the first 5 years! Realistically, a car can be a great mode of transportation without eating a hole in your wallet for twenty years or more. And yet, search for a list of cars that are cheapest to own over a lifetime, and you will have difficulty finding anything but a few random blog posts. The focus of our culture, then, is in buying the newest, hottest cars. This is how we waste money.

Almost a year ago, I was fortunate enough to receive a car that was not wanted anymore. The car is a 1991 Honda Accord and currently has over 275,000 miles on it. I dutifully follow its service schedule, and it nets me about 35 miles per gallon. It has never needed a clutch or transmission replacement, and it has not needed anything other than general service. I encourage you to pick a vehicle that you will be happy with for a long period of time, and one that is not prone to failure. After all, it's only a mode of transportation, and if it has a dent or two and some duct tape on it, you will still make it where you need to go.

A summary, then, of how to save money when purchasing an automobile is this:

1. Use the automobile you currently own until the end of its useful life.

2. Buy a used automobile if possible, and choose one that is a reliable model in good condition (no accidents).

3. If you must buy a new car, again pick for reliability, functionality, and long-term value.

4. Drive the vehicle carefully and slower than you have to.

5. Invest in a service manual and an owner's manual. You'll learn things you never knew (I did).

6. Maintain the vehicle with regular oil changes, air filters, and fluid changes, and follow the service schedule meticulously.

7. Learn how to perform minor to major service yourself, and you will save a ton of money.



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Dustin LaBarge
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Posted on May 23, 2010
Stacy Calvert
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Posted on May 21, 2010