Posted by Tim Stobbs on November 28, 2007
Well Ram over at the Canadian Capitalist is celebrating his blog’s third birthday and in order to help him celebrate I’m going to take up his challenge to write on my money mistake and how to avoid it.
In my case I feel one of my bigger mistakes was leasing a new car just out of university. You see I thought I’ve got a good job and frankly after all those years of living on the cheap I deserved it. I just didn’t realize I had signed a four year contract to flush money down the drain. In total the car cost me almost $24,000 in payments and the buy out of which it was only worth around $7000 today.
Now I realized the major problem that caused me to get the car in the first place. I had mistaken my parent’s standard of living as my own. I didn’t realize that when you just get out of university you are suppose to be poor and still have nothing. I had a negative net worth of -$25,000 and then I added to it with a car lease. What the hell was I thinking?!?! So in the end I have to put that decision on the wall of shame. I didn’t need a new car. I actually just needed a car. I could have borrowed some money from my parents to make a down payment and then got a bank loan for the rest and got a used car.
Yet shortly after getting the car I realized how much it was eating up of my monthly income. I started to hate that payment and this it turns out was a good thing. Because I hated that payment it made me want to learn more about my own money. In some regards this started me on my path to where I am today.
In the end I won’t recommend leasing a new car to anyone, but it did serve a purpose. It reminds me that regardless of how much I learn there is still more I don’t know about money. So I keep reading and writing hoping if nothing else I can help just one person not make some of the mistakes I have.