View Full Version : Save over $7,000 every year!
This story lays bare the cost of America's passion for the car. If you
really need to save money, and who doesn't, then think hard about
ditching one of more of your cars to go car free or car-lite.
Entire story posted due to WSJ taking links down early....(full credit given)
"Last week, the auto industry finally got its bailout.
But is it time for Americans to rescue their own finances from their cars?
Families are now bracing for the mother of all recessions. They're looking for every chance to save a dollar.
Forget lattes and store-brand cereal. If you really want to see where your money is going, take a closer look at your car. Foreign or domestic, it doesn't matter. It's a cash guzzler, and it is probably costing you more than anything else except your home.
How much? First there's the actual capital cost of buying the vehicle. Obviously people can spend as little as a few thousand dollars buying an old clunker. But most spend a lot more. And that initial cost is just the start. Now add everything from gas and maintenance to insurance, registration, taxes, tolls, parking, tickets and so on.
You'll be lucky if you're spending less than about $4,000 a year. Most people will pay a lot more. If you buy the vehicle with a loan, you'll have to pay interest. If you pay cash, you have to factor in the interest you would have made on that money if you had saved it instead. That's a real cost too, and a substantial one, though most people forget about it.
In 2007, the most recent year that numbers are available, the American Automobile Association figured its members paid about $7,800 a year on average to own and maintain their cars. That figure dropped to about $6,200 for small-car owners.
The AAA's numbers were tabulated before the surge, and recent collapse, of gasoline prices. It's hard to imagine gas prices will to remain at today's panic-level $1.60 per gallon for long. But even if they do, that will only cut the AAA's figures by about $400 annually.
These are not trifling costs. Drivers are hemhorraging money. The federal Bureau of Labor Statistics calculated that in 2006 vehicles sucked down nearly 17 cents of every family dollar.
Maybe it's time for smart families to consider some really tough choices.
Life without a car may seem inconceivable. They are useful and can be fun. In most parts of America, you really can't survive without one. And they've been hammered into the culture and the national psyche.
But a lot of things are happening these days that nobody expected. Rules are changing. People need to make every dollar count.
Trading down to the cheapest car possible is one move. Dumping one vehicle from a two-car household is tougher to do, but offers real savings. Moving into a city with a downtown, and getting rid of your cars completely, can save you even more. When you factor in the savings, city real estate might actually work out in your favor.
Residents of inner-ring and upscale suburbs, as well as everyone in car-dependent cities like Dallas and Atlanta, are in the worst of all possible worlds on this. They're paying plenty for real estate – and then paying even more on top of that to run a car for each adult in the home.
Surely they'd be better off moving out to the country, where they would still need their cars but at least real estate is cheap, or into a downtown where they could lose the cars.
Necessity, they say, is the mother of invention. We are going to see a lot of necessity. It may lead to some interesting developments.
Write to Brett Arends at brett.arends@wsj.com"
http://sec.online.wsj.com/article/SB122996650443826683.html
GoodDaughter
01-07-2009, 03:01 PM
"...people can spend as little as a few thousand dollars buying an old clunker."
A few thousand?? I beg to differ. I have a 2000 Ford Contour I bought 3 years ago, had 124K miles on it when I bought it, it has given me zero trouble. I paid $1500 cash. Hardly 'thousands' and hardly 'a clunker'. If someone is foolish enough to spend 'thousands' on 'an old clunker', they're just that...fools.
"Surely they'd be better off moving out to the country, where they would still need their cars but at least real estate is cheap".
On what planet is real estate 'cheap' in 'the country'? If you're talking about around the DFW area, uhmm....HELL no, it's not cheap. I know because I own some of it out in 'the country'.
While I admire the sophomoric attempt at calculating real life costs, I get the overall impression that the author of this article has little practical experience with the topic he's talking about.
And I would beg to differ about the comment "...Forget lattes and store-brand cereal" (as a way of saving money). If we are discussing FAMILIES here (and I am assuming we are because the author later states "and then paying even more on top of that to run a car for each adult in the home", which implies multiple people) I think the money spent on lattes, cereal, and other foods, especially precooked and so-called 'convenience' foods has become a HUGE chunk of a families income. Even raw, minimally processed foods and the cost of cooking from scratch has gone WAY up, as anyone here can testify. It doesn't take an expert or an author to tell us how much it costs to feed a family. It would be remiss for a family looking to cut costs to look at their grocery buying habits. But now that is about the ONE place I could see it making a real difference financially moving to the country---if a family were able to make their own meat and grow their own vegetables and fruit.
But hey, what do I know. I'm just a typical American.
I agree going without a car would save a ton of $. However, our cities (most of 'em) have been built for the car.
I did some biking while gas was high and I was scared of the traffic. A lot of Americans don't know how to drive with bikes on the road. Throw in cell phones and other distractions, you may save 4-6k a year but you may wind up in the hospital.
mtwildflower
01-07-2009, 06:00 PM
There is absolutely no way we can make it without a vehicle of some kind. Some people can and do, however, it is simply not practical for us.
Instead we carpool, make fewer extra trips, ask people who are going to the city to run an errand for us while there, and then in turn do the same for them when we are there, do a little more walking in our own town, etc. We are also lucky enough to live across the street from our school, so my teenage daughters don't have to drive anywhere for school.
My wife and I have had only one car now for about 2 years. When the weather isn't treacherous, you'll see me flyin' around on my hog. It's a 50cc Rocketa scooter, needs no insurance, title, registration, or tags; only a valid drivers license. Came with a free helmet(which isn't required here either) and gets about 85 MPG. I rode all last summer...filled the tank 4 times for a grand total of.....$12.86. You can find them 2nd hand for a few hundred bucks now. Max speed is about 40MPH going downhill with a tailwind, but, it gets me to the store, work, around town, etc. Ahhh...Nothing like being "in the wind"..sorta.....VVRRRROOOOOMMM.
http://www.happyscooters.com/Scooters-50cc-Gas-Motor-Mopeds-p-320-31fg67.html
V/R,
Shep
There is absolutely no way we can make it without a vehicle of some kind. Some people can and do, however, it is simply not practical for us.
Instead we carpool, make fewer extra trips, ask people who are going to the city to run an errand for us while there, and then in turn do the same for them when we are there, do a little more walking in our own town, etc. We are also lucky enough to live across the street from our school, so my teenage daughters don't have to drive anywhere for school.
Agreed. It has to be practical to be without a car. I dohaven't driven siince 1992. But then I'm in Los Angeles with it's superior bus systems. The only time I wish I had a car was when I want to go to Ojai to visit my dad and stepmom, but the train gets me there well.
gwhilikerz
01-09-2009, 06:33 AM
The best I can do is what i have done. I stopped making payments on a new car every 3 years. I now have a 7 yr old car and plan to keep it another 7 years or longer. When it dies for good I'll spend another $2-3 thousand and do it again.
The best I can do is what i have done. I stopped making payments on a new car every 3 years. I now have a 7 yr old car and plan to keep it another 7 years or longer. When it dies for good I'll spend another $2-3 thousand and do it again.
Very savvy way to live. You also beat the "system" at their own game!
Now just add "car-lite" to the plan and use your vehicles ONLY for tasks
that can be done no other way to put more money in your pocket!!
Shamrock1121
01-09-2009, 08:30 AM
-Our first way to save money is to have half our income automatically placed in a savings account, and live off the other half. BUT, it took a lot of work on the general budget and avoiding debt to get to that point.
- I generally save around $1,000 a year just by keeping my $1 bills and sticking them in the bank once a month.
- We got "mass-transit" January 1 (if you can call it that ;) in a small town where you can drive to any side of town in less than 10 minutes - even during "rush" hour). It costs $2 a day to ride the bus, which is more than the gas for my well-planned day of running errands and getting groceries (in our paid-for car), once a week. I'd have to spend a large part of 2 days to do everything if I rode the bus. Just the amount of time I'd spend sitting on the bus while it runs through it's route to get back home again would take hours. WASTED time is also worth a lot....
- We've always been low-mileage people (8,000-10,000/year and that includes a 12-hour trip once or twice a year from Kansas to Tennessee to see our daughter and her family).
- We save by paying cash for low-mileage used vehicles (we drive a 2002 Toyota RAV-4 and 2003 Toyota Matrix - both have around 45,000 miles on them). Most people never figure out how much money they give to the bank or loan company in interest when they get a loan. That's money we never have to spend, so I guess that's saved as well.
- The only time I waste money on commercial cereal is when I make my mother-in-laws recipe for "Party Mix" for the holidays (it's one of those family traditions) - and I was shocked by the price this year - even using coupons and buying it on sale. I don't know how people with cereal-eating kids do it?
Considering there's something like 17-cents worth of grain in a box, I can make "cereal" from whole grains for a year from the price of one box of commercial cereal.
GoodDaughter, this one is for you...
I make my own cooked cereals and cereal blends (cream of wheat, cream of rice, multi-grain cereal blends), mill my own flakes, homemade bulgur, granola and a cereal similar to Grape-Nuts (made with freshly-milled whole wheat flour and homemade kefir (and a few other ingredients).
Not to mention what I save by making our bread and all baked goods using freshly-milled flour from a large assortment of grains/beans/seeds. I can make a large loaf of 100% whole wheat bread for around 50-cents.
All grains/seeds/beans are paid for out of my $50/week food budget.
I ran across this recently and printed it out for a reference...
"Our own 2007 study shows an average American family of four spends at least":
-$2.00 per day for store bought bread
-$2.00 per day for store bought cereal
------------
$4.00 total
X 30 days
-------------
$120.00/month or $1,440.00/year
By using a mill (figuring wheat at $15 per 100# plus eggs, sugar, salt, etc.)
-40-cents per day for wholesome bread
-15-cents per day for healthful cereal
-------------
55-cents/day total
X 30-days
-------------------
$16.6 a month or $198.00 per year
The average savings for bread and cereal alone is over $1,200.00 per year. (Karen Note: That should pay for a new, quality, grain mill in short time.)
We are whole foods people, and that's a great way to save money. You pay more money for every set of hands (besides your own) that work to make your food for you. You pay for the cans, bags, and boxes as well.
- I do a lot of cooking and baking in our Solar Ovens. I also "cook" whole grains, beans, cooked cereal (like oatmeal) in a Thermos (using boiling water) to reduce the cost of long cooking times.
- I mill pinto and black beans into flour and make "instant" refried beans and mill small white beans and split peas to make instant soup mixes, rather than traditional over-night soaking and long cooking times. I cook refried beans from bean flour in about 7 minutes.
-I budget and pay myself $20 a month to cut my hair and put it in the savings acount - so I save $240 a year by cutting my own hair.
-Karen
GoodDaughter
01-09-2009, 09:19 AM
Karen, thank you for the calculations! ;D *That is exactly the kind of useful, hands-on information we need from people who have actually done something instead of theorizing and throwing out rounded up numbers that IMO don't refelct the realistic costs of things.
One thing I don't think I've read on these kinds of threads (reducing/getting rid of cars altogether) regards children. *How many mothers would be willing to pack the toddlers into one of those tow-behind bicycle transporters I've seen a few people put their kids in (in sidwalk covered suburbia of course) and get out on the road with them? HELL no. There are enough horrible drivers out on the road for most of us to risk our lives bicycling anyway, much less with one or more children strapped on. *At least in a car wreck, you stand a better chance of surviving than you would in a car-bicycle wreck.
BTW, I just got my diesel pickup running again--sapped the batteries back after the hurricane and just bought two new ones. I have a car, but having a pickup is also a necessity for me as I have a home based business.
Yeah, I want both vehicles. ;)
ETA KAREN Do you have a recipe for how you prepare refries from powdered pintos? I can just imagine using that for burrito filling. I love bean burritos.
"One thing I don't think I've read on these kinds of threads (reducing/getting rid of cars altogether) regards children. How many mothers would be willing to pack the toddlers into one of those tow-behind bicycle transporters I've seen a few people put their kids in (in sidwalk covered suburbia of course) and get out on the road with them? HELL no. There are enough horrible drivers out on the road for most of us to risk our lives bicycling anyway, much less with one or more children strapped on. "
Yes, this will take time to change but change it will.
"BTW, I just got my diesel pickup running again--sapped the batteries back after the hurricane and just bought two new ones. I have a car, but having a pickup is also a necessity for me as I have a home based business.
Yeah, I want both vehicles."
You'd be suprized at how much money you can save by ditching that
fuel sucking,repair eating, truck and replace it with a trailer for your
car. You say "I want both vehicles" but do you really understand just
how much that "want" is costing you cause you don't really need both.
Shamrock1121
01-09-2009, 12:37 PM
ETA KAREN *Do you have a recipe for how you prepare refries from powdered pintos? I can just imagine using that for burrito filling. I love bean burritos.
GoodDaughter -
Here's a link to stuff I posted on the subject over at the Gulch: (scroll down once the page opens)
http://thegulch.proboards102.com/index.cgi?board=emergencyfoodstocks&action=display &thread=4603
A great book on the subject is: COUNTRY BEANS by Rita Bingham.
About riding bikes... Our neighbor lived in Memphis before moving to this one-horse town, and he rode his bike there, all-the-time. Thought he would do that here, but said this was the worst town for biking he'd ever ridden in. He's parked his bike because it's so dangerous. Can't think how dangerous it would be with a cart behind with kiddies in it....
When gas started going up in 2003, we sold our pick-up and got the Toyota Matrix (a small station-wagon). I have put 8-foot posts in it (from the front to the back with the front seat down), so we've used it for light-weight hauling the things we used to use our pick-up for. When we need to do some heavy hauling, hubby borrows one of the pick-ups from work. We've saved a fortune on gas alone... The Matrix gets 38mpg.
-Karen
GoodDaughter
01-09-2009, 01:04 PM
Thank you Karen. I am definitely going to try this method of making refries. I love them but I don't like buying them canned because they don't taste as good, and I seldom cook a pot of beans. This might be a really good way to use them. Maybe make bean dip out of them too. MMMmmmm....
redlandnwoods789
02-18-2009, 02:24 PM
i agree throw in hospital bills,lost work,wages ,death,expensive exorbatant car repairs and constantly ordering of parts.
the american car culture is not worth it.
Saoirse
02-18-2009, 04:12 PM
My old jeep doesn't get the most mpg, but I live in a rural area. I bought it because my job required going into rough terrain.
It turned out to be a great decision. I use it for hauling all sorts of things, used it for moving, taking my oversized hound to the vet. It works out great for traveling.
harvester
02-19-2009, 07:48 AM
Well i know im not the best on saving anything, but this is what I do, to do my part for the bank account.
Number one is I, a montanian, married a city slicker from new york. this was the best move I ever made. He is in charge of the vehicle purchases and hiring work done etc. He bought us a 2007 dodge calibur last year that was priced at 17k. After 2 hours and a thousand dollar down payment on a post dated check, the keys were shoved into my hands and we were all but shoved out the door with the car...It cost us 12k. I knew that man was good for something!
We will be needing a new truck soon as ours is dying a slow death.
Husband takes the car to work, 10 minutes away. I only use the truck to get 3/4 ton hay rounds, to haul trash to the dump or to haul animals off to be bred in the fall. we use it very little. I haul my own garbage as it costs me 16$ a month to rent a trashcan for pickup. My home taxes already pay for landfill use, why pay twice? I wait for husband to get home from work with the car as it is very good on gas, to do my grocery shopping which I limit to twice a month.
I raise goats on a very small scale now. I have three does, no bucks. Two of those does are lamanchas and one of them is my new purebred boer. All of my does are bred to boer bucks. The kids go into the freezer, and my lamancha does produce about 2 gallons a day each of light milk. Boer goat meat is very beefy. Even a 1/4 boer influence on a dairy goat will overcome and enhance the meat to be more beefy, rather than goaty.
I pay roughly from breeding fees to doing my own butchering, 34-35 cents a pound for goat. I do not buy beef at our markets for 9.00dollars a lb.
Milk produced by my ladies cost me roughly 10c a gallon.
I no longer pay $4.95 a gallon for storebought milk. Their milk is light and fresh and can not be discerned from storebought. no goaty taste at all. Ive tried it on alot of friends. they had no clue it was my goats milk.
I have only a few laying hens. 3 to be exact. they lay 3 eggs a day and its way more than we can handle. we give alot of free eggs away to friends with children. I no llonger pay the 2.50 - 3.50 per dozen for eggs anymore. I pay nothing. our eggs are free. short of the purchase price of the chick, which was 1.25 last year. our chickens are fed household scraps and garden gleenings along with free range. they are plump, spunky and at times pesky as they love to follow us around and "help" in the garden.
I buy 50lbs of flour for $10.00. Yes it last me a long time. I make my own bread and buscits, dumplings and noodles with it. along with cakes and cookies from scratch and pie crusts.
We trade with the neighbors, eggs for this, beef for that. a loaf of bread will get me 3 ears of corn from one neighbor. enough for two meals for my family as we cut the ears in half. they are big. I get the tongues of the butchered beef from one neighbor free. 50lbs of hamburger and steaks will cost me anything from half a goat, a good bbq dinner, or even just advice on animal husbandry. I even got a 100+ year old chocolate cake recipe from one neighbor for a butchered rabbit. I used the recipe for my sons cubscout cake bake auction. It sold for 500.00. now the scouts have enough money to go to summer camp.
Simply the savings we have on meat milk and eggs make a huge impact. We live in a nice house, its spotless, along with our barnyard and barn is spotless too. If you werent told about how we live, you would never know it. Because of our savings we have enough money to go out once a month, and go to dinner or breakfast once or twice a month. Enough to replace old vehicles. Once we buy a vehicle we drive it to death. We dont care about keeping up with the joneses and having cool cars. we need function over cool. We do play and have play things, husband is into tools, he gets a new one each year. I have my horses, just two. Husband does stained glass, I do tatting, and numerous other needleworks. Even when it came to the horses it had to be economical. One is a stallion, one a mare. Hopefully their first colt this year. Just the sale of one of their colts will support every animal on the place for one year, with plenty of money left over.
Its taken 2 years, good planning and wize purchases. but its paying off now. :)
goldengate
02-19-2009, 11:45 AM
When we still lived in the city, we gave up my car. (Joe still had his to get to work.) Once a month, I would rent a car for 24 hours. It was delivered to my house and picked up there the next day. I spent the morning doing errands that required the presence of my children. We went back home for lunch. Then the older ones babysat the younger ones while I finished up. I planned my routes carefully to save time...ended the day with grocery shopping because the grocery was the only thing in town back then open 24 hours. It was an exhausting 24 hours but it sure saved us a lot of money.
leera
02-19-2009, 08:31 PM
If I could go without a car I would........however,there are no jobs within walking distance,no stores either.......unless you count the gas station/truck stop.....or the party store/harware/movie rental........
I have a 30 mile one way coomute,dropping hubby off on the way through,picking him up on the way back.....we only have one car(the truck we have is a classic in the process of being restored).....but it's paid off,and so far has not given me any trouble that wasn't normal wear and tear,it's got 160K+ miles and counting........
I've gotten rather used to not having a car payment,however,I still choose to keep full coverage on it,just in case.......
But,nope,can not do without a car.......
Michael32170
02-20-2009, 05:22 AM
That is a nonsensical article. Completely mis-applies financial analsys.
Classic liberal Gibberish. Take this paragraph as an example:
"You'll be lucky if you're spending less than about $4,000 a year. Most people will pay a lot more. If you buy the vehicle with a loan, you'll have to pay interest. If you pay cash, you have to factor in the interest you would have made on that money if you had saved it instead. That's a real cost too, and a substantial one, though most people forget about it. "
If you paid cash for the car (as I do) you have the advantage of the interest gained from the savings account to reduce the actual cost of the car.
If you paid cash for the car (as I do) you have the advantage of the interest gained from the savings account to reduce the actual cost of the car.
But how to avoid all the "other" cost of owning a car. You know...those little
expenses called insurance, depreciation, maintance, and state fees. None of
which are a cost for the car free.
All vehicles run to zero in cost savings.
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