What does this title mean to you? Do you want to know what it means to me? It means being in control of your financial life. The standard definition by Wikipedia is:
Personal finance is the application of the principles of finance to the monetary decisions of an individual or family. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.
I think that definition in its entirety said exactly the same thing I said in the sentence above just with a bit more fluff. Being in complete control over your finances is proving to be an extremely difficult task, as people every day are taking a step forward and two steps backwards. A shift in how we handle money needs to be taken into serious consideration because people still have not gotten the memo. Granted nobody is perfect and we all make mistakes in life, you and I are included. I am still paying for student loans that I did not want to take out, but did allow me to graduate within 2.5 years from beginning to end. Those student loans are the only thing left on my list of life debts and they are not cheap as interest charges are 6.8% of the total. I hope I can stick to my goal of paying it off in two years.
On top of my student loans is another issue that will have to be reckoned with, I want to eventually buy a home and be a homeowner with all the pretty details that go with it. I would prefer a nice colonial with a front porch. Property taxes in my area are so high that you need a second job just to pay for them on top of the mortgage. Do you have an extra 10 grand to pay for taxes annually every year? UM No. How about the added bump in utilities from 45 dollars a month currently to 250+ to heat and cool a nice sized home. Sprinkle in maintenance that the home will eventually need, I think I will have to get a big umbrella insurance to cover everything under the sun. This will be one of the hardest decisions I have to make a year from now as renting is OK for now, but we will eventually need more space as the family is growing.
Last but not least is the mere fact that my mode of transportation is about 14 years old and getting older with every mile I put on it. Will I succumb to my frugal ways and buy that new Mazda 3 or maybe splurge and get the BMW X3. The price difference between these two cars is about 20 grand. So much for wishful thinking as the BMW never had a chance. All the personal finance details are getting daunting as I have to decide to buy new or used, finance it or pay cash. I think I will go with used and cash. But if I go that route I will not get exactly what I want. Which is going new and getting the best fuel economy from a decently sized 2012 car. I will probably end up getting another older car, and be in the same position with a beat up car in about 3 years again, thus repeating the cycle. When does it make sense to buy new? I know what will not occur and that is called leasing. When it is all said and done I hope my Camry can last 3 more years and then I can be in a better position to buy whatever I want in cash as I hate having a car payment and haven’t had one in over 5 years.
The many options and decisions in life that we make can lead all of us to have a good or not so good foundation with money. It is all based on the personal finance choices we make.
As always Watch your money!
Rich Uncle EL
Alright I admit it, I am a control freak! I like to have control of my finances. I sleep better at night if I do. I am buying my last car in the next day or two. I went through the decision of new or used. I was unloading my 17 year old car. Stay tuned, I haven't quite pulled the trigger yet.
That is awesome. Let me know what you end up getting. That new car smell is a great feeling. Hey no PF blogger can knock your decision because you held the previous car for so long. I just hope my camry can reach 18 years so that I can break your record.
each and every one want to do something with his/her own efforts your blog is helpful in that great inspiration keep it up