Now, I know what you’re all going to say. That I should buy a used car, because as soon as I buy a new car and drive it off the lot, it will depreciate in value, blah blah blah. I know all of this. But I want to buy a new car just once in my lifetime. Then I will drive it until it falls apart. Whether I actually end up buying a new one is another story. Chances are I’ll balk at the sticker price and end up buying a used one (which is so typical of me). But I know what my preference is.
That being said, my current car is probably going to last me at least another 2-3 years. So I was thinking in the meantime, I can save up money so that I can buy a new car in cash. Or at least put down a very sizable down payment.
I don’t exactly know what kind of car I want to buy, but I do know what I like and what I don’t like. Plus, it’s easy to narrow my selection down to a handful of choices because my tall boyfriend doesn’t fit into a lot of cars. Obviously if I’m not looking to buy for another 2-3 years, I won’t really need to think about what model I want right now … I just want to be able to afford one without monstrous car payments every month for years.
So in the meantime, do you think I should set up a Car Fund? Then I can put money into it for car repairs and insurance for my current car, AND save up for a new one for the future. I like this idea because it keeps my car money separate from my general Savings Fund.
Well, today is Friday and pay day – my favourite combination. :) I updated my NetworthIQ and my sidebar totals. This is the first time in a few months where my Retirement Portfolio has taken a hit. Here’s what I did with my money today:
- $150 rent
- $200 RRSPs
- $25 TFSA
- $200 Savings Fund
- $100 Emergency Fund
I wish I could have saved more, but I am hoping to buy some things tomorrow when we go down to Seattle. Plus I had to pay off the flight to Calgary that we booked for January.
I found an article on CBC.ca today, which basically talks about a TD Canada Trust study that suggests 80% of Canadians found saving money “too hard” and that young people between 18-34 were more interested in saving for a house than for retirement.
Too hard, or too lazy???
They interviewed a 32-year-old from Vancouver who said that he hasn’t started saving yet for retirement, saying “I am too young to think about that,” and would rather save for a down payment instead (although he admitted he hadn’t started saving for that either).
Which makes me frustrated. What good is a house if you’re still paying for it when you’re 65? And what good is retirement if you’re barely scraping by?
It all boils down to a lack of discipline and priority. Isn’t this just what I was talking about the other day!? It’s unrealistic for people in my age group (mid/late 20’s) to save money for retirement (and for emergencies) AND go on expensive trips multiple times a year, buy a nice car and the latest gadgets, and party every night. Unless you’re rich. But even then, I think the people who complain that it’s “too hard” would complain even if they were making 6 figures.
If you’re in your mid/late 20’s and can’t save money and/or don’t have any savings, there’s a problem (unless you’re getting out of debt, but even then, you should still be putting away some money in an Emergency Fund and Retirement). Don’t buy an iPod. Don’t buy an expensive car. Don’t go out to eat every day. Don’t go on those expensive trips. Don’t move into a more expensive apartment. Even if your friends are doing it, just don’t. BECAUSE YOU OBVIOUSLY CAN’T AFFORD IT.
If you have an expensive hobby, then budget for it. It might mean giving up having a new car (and driving a used one), or not going out to eat as much, or not going on that trip. But you can’t do everything you want to do. That’s just not how life works. You have to make some sacrifices now in order to live the life you want to live in the future. A sad, but true reality.
Saving should be priority #1. Pay yourself first. Then do whatever you want with the rest of your money. And once you get into the habit of paying yourself first, you won’t even think twice about putting money away into savings every pay period.
Not sure if you’re saving enough to live the life you want to live come retirement? Plug your numbers into an RRSP Calculator and check it out!