I drive a 14-year-old car and I’m proud of it. My current ride is a 2004 Lexus ES 330 that has almost 250,000 miles on it. Lexi, as I call her, has served me well over the years.
I bought Lexi back in 2007 when she was 3 years old. The car was a great deal, costing just under $25,000 and roughly having about 30,000 miles at the time of purchase.
Although it was a great deal, the problem was that I couldn’t actually afford the car. As evidenced by the fact that I had no money for a downpayment.
Just three months before I purchased the car I started a new job, making approximately $72,000 per year. And would receive a $10,000 sign-on bonus within the year as long as I stayed employed for the full year.
I felt like I had hit the jackpot! So naturally, I had to celebrate by getting a new ride. I could afford the payments based on my new salary, so I thought I could afford the car.
I searched online for a few days, applied for financing through the credit union at work, and shortly after became the proud owner of a gold Lexus with heated seats, wood grain kit, and multi-CD changer.
I was sitting on top of the world…for about 5 minutes. Ok, maybe it was about 3 months. Just enough time for the ‘like-new’ smell to wear off and the reality of 5 years worth of $492 payments (and interest) to set in.
The only thing I did right was to purchase the car used and to buy a good quality vehicle. I thank God for the quality. It’s the only reason I am still rolling around in Lexi 11 years later. The ride isn’t as smooth and she’s a little banged up, but it gets the job done.
And you know what…The best thing about my car is that it is paid for. I haven’t had a car payment in about 4 years and I don’t ever plan to have another one.
A quick look back at my ‘checkered past’ with cars
- 2002: My first car- A sea-green Geo Metro (Free! gifted to me by my grandfather)
- 2004: My new husband and I shared his Ford Focus (Free! gifted by hubby’s parents)
- 2005: Newly married and living on one income, we decided to buy a used Chevy Blazer to contend with the winter weather in Michigan while Eric attended graduate school. We had no money for a downpayment so we got a cash advance on our one credit card to use as a down payment. We financed over 5 years and the payments were less than $300 per month. We paid off the cash advance two months later and eventually paid the truck off early in 2008.
- 2007: Purchased Lexi with no money down, financed over 5 years with a $492 payment. Hubby continued to drive the Chevy Blazer and we gifted the Ford Focus to my mother.
- 2010: Hubby purchased a 2008 Cadillac CTS. We put down $6,000 and financed over 5 years. I don’t recall the exact payment but it was less than $300 and we made the final payment in 2014.
- Present (2018): Hubby still drives the Cadillac CTS but it has needed a LOT of repairs over the past 2 years. And I’m still driving the Lexus which has required basic maintenance and some minor repairs over the years. We have been car-payment-free for over 4 years.
Now here is the thing that some people may find surprising. For the first time in my life, I actually have enough cash saved to pay for a car outright! And I don’t have to drain the emergency fund to purchase it. I’ve come a long way.
Over the past 2.5 years, I have saved up just under $20,000 towards the purchase of my next car. But I continue to drive my dusty 14-year-old car anyway. And I plan to continue to do so for the foreseeable future. Cars are just not that important to me anymore.
I would much rather be investing my money or using it to purchase some other appreciable asset, like a rental property that generates passive income. For the Nicole of today, cars are strictly about getting from Point A to Point B reliably. As long as my car can continue to hold up that part of the bargain, I will hold onto the cash that I have designated for my next ride.
More than 10 years ago when I first signed on the dotted line for that $492 monthly car payment, I couldn’t imagine that I would one day be able to pay for a car outright in cash.
Everything has changed because of a few key mindset shifts and a lot of intentionality with my money.
Here are a few things that helped me arrive to this point with my mindset and my money.
1. Creating a plan of attack for my debt.
It is super important to stay uncomfortable with debt. Everything around us, from friends to social media, is telling us to spend, spend, and spend some more and these messages are not easy to ignore.
Often we use debt to fake our way to living the life that we feel that we should be living. I choose to focus on living the life that I actually am living, not a fictitious one in which I can afford everything that my heart desires.
By doing so I maintain a general sense of discomfort with debt that helps me stay focused on ridding it from my life completely.
2. Redefining my definition of success.
In my early years, I had a particular picture in my mind about what success looked like. Big house in the suburbs, high-paying job, titles and letters behind my name, and a luxury vehicle in the driveway.
Guess what? I achieved all of that and still wasn’t happy. Real success for me is living a life where I don’t have to worry about having enough. A life where I’m content, healthy, spending quality time with my family, and having the freedom to really enjoy life.
After years of being in the rat race, I realized that my prior vision of a successful life was not conducive to any of the things that I value most.
Maintaining the image of success is stressful, anxiety-ridden, and defined by material possessions. Don’t get me wrong. Money is important. But I don’t feel the need to define my life or my personal value by it.
3. Keeping my eye on my ‘why’.
Your financial ‘why’ is the big reason for pursuing this whole financial freedom thing in the first place. Trust me…Budgeting for the sake of budgeting gets old really quickly. Nowadays, I look at all financial decisions through the lens of ‘will this get me closer to my goal’?
And my big goal is financial independence. My definition of financial independence is the point at which I have enough financial resources to sustain my lifestyle without having to actively work or trade hours for dollars.
My current goal is to reach financial independence by age 45 (in 2025) with a $1.2 million dollar net worth. Whenever I get the urge to uplevel my lifestyle I ask myself…Does this purchase align with my goals and values? If the purchase doesn’t align with my values and financial goals then I let it go and remember why I’m on this journey in the first place. And that is why I will continue to drive my 14-year-old car until the wheels fall off.