Where I am from my salery is quite okay to be honest. I get about 3700 € after taxes (state insurances, health care etc.) each month but I don’t see me affording a car anytime soon.
I pay about 1200 € a month on my debt for my house, so I have about 2500 € left. Another 600 € go away for electricity, water, trash, internet, phone provider etc…
Leaves me with 1900 € left for the month. I’d say I spend about 900 € for food and household supply a month.
1000 € I save 500 € for my house for later. 250 € for vacation (3000 € in total a year) And 250 € for car.
It is going to take me about 5 years to save for a 15.000 € car. I don’t know how people buy BMWs, etc. I know I don’t earn that much but I need a car somehow my current car is breaking down and I got no money saved yet. Only about 1500 € cause I spent all my money on paving (had to be done) and my emergency saving wasn’t enough for the bill of the paving and other work on that area around my house.
I only save since 3 years cause I wasnt able to before.
I am not even ranting about the joke of a car I might get with 15.000 €. In my country I can’t even get the smallest Toyota with that. It’s a friggin’ joke that a Toyota Aigo or whatever it is called is going for 19.000 € (new) but whatever.
Two options:
Most people choose the second option.
Did it though? I’m not saying it’s not the case, but I’ve seen a lot of people do things because “it had to be done” when it really didn’t.
For example, my furnace stopped working. So I called an HVAC company, and they said I could either repair it or replace it, and they obviously preferred replacement since that nets more money. I opted for repair after calculating that it would only need to survive another 2 years for me to save money vs the expected life of a new furnace, and the repair was subsidized a little by the manufacturer’s warranty (and they said nothing else looked bad). Another one was my car had an expensive problem, and no mechanics would touch it, and they basically said I should just replace it. I did some research and found a much cheaper solution (just a bit of soldering, so I sent it to a repair service; but I did have to rip the dashboard apart to get to the board), and it’s been working reasonably well since.
Contractors will tell you the more expensive option “needs to be done,” so be very careful about trusting everything they say. The more expensive something is, the more you should seek a second or third opinion, and most things that “need to be done” can wait a bit.
That said, don’t put off real emergencies. A leaking roof, for example, can do a ton of damage if not repaired quickly. But do be vigilant about what is and is not an emergency.
Well, you’re on the right track!
Also note that buying used cars is absolutely reasonable. I have never purchased a new car, and I don’t intend to start now. If you do some research, you can find a really solid car that’ll last 10-15 years for that 15.000 €. The fact that you’re able to save that in just five years means the other 5-10 years will just go to extra savings.
Starting out w/ saving sucks, but the longer you do it, the better off you’ll be. Don’t fall into the debt trap, since that’ll suck all of your spending.
You don’t have to buy everything in cash, but I do recommend having a short-term plan for paying off anything you finance. Check out The Money Guy for advice about this type of thing. For cars specifically (this page on their website breaks it down, they have a rule called 20-3-8:
In general, you want to avoid debt for depreciating assets like cars, and keep debt for appreciating assets like houses until you have the means to pay it off.