Almost exactly two years ago, our car lease expired, and my family decided to embark on a “one month” experiment of living without owning or leasing a car. At the time our daughter was attending an elementary school just a few blocks away (easily walkable), and Kia was willing to do the bulk of the grocery shopping on her Xtracycle cargo bike. In terms of commuting, Kia and I both work from home. Otherwise we planned to use car sharing services and Lyft/Uber as needed. Our #1 rule for the experiment was that we would never turn down social invitations for lack of transportation. Also, we would not depend too much on family and friends for rides.
Category: Money/Personal Finance (Page 1 of 6)
So we gave up. Or gave in. After more than a year without a car, we decided to get one.
We knew we wanted a hatchback. You can fit anything in a hatchback. One time we purchased a bunch of furniture at IKEA, pulled our Fiat 500 into the loading zone next to a guy in a Ford F-150 (that’s a biggish pickup truck, for you European readers). He gave us a dubious look until we popped the hatch, folded down the back seat, and loaded in those flat-packs no problem. I think we got a tiny nod of appreciation.
After reading too many reviews and watching too many YouTube video reviews, I narrowed it down to the Yaris, the Prius c (both Toyota), the VW Golf or eGolf, and the Honda Fit. I created an account on TrueCar to get some estimates. I also called a few dealerships directly to get some lease quotes.
That’s when things started going south.
An analogy: each hour of your life is a casino chip. You can cash in (relax and enjoy life) or place bets (expend effort and willpower in an attempt to get more rewards).
What are the rewards? Whatever you value. Health, wealth, love, admiration, respect, fame. Or, if you’re Conan: crush your enemies, see them driven before you, and hear the lamentations of the women.
Odds aren’t the same in every casino. In some casinos, no matter how you place your bets, you’ll lose. Some casinos even cheat. But if you’re fortunate enough to live in a country with low rates of corruption and a thriving economy, the odds are probably decent. If you make good bets (expending effort in reasonably smart ways), you’ll get rewards.
But even good casinos favor some patrons over others. Certain combinations of gender, ethnicity, age, physical attractiveness, sexual orientation, etc. may convey better or worse odds.
So how do you bet? What’s the best betting strategy? How do you get the most chips?
Back in February when Kia and I turned in our leased Fiat 500 and decided to do a “one-month experiment” of living without a car, I suspected that the experiment might last longer than one month. But eight months? No way. I was sure we’d have another car by now. But it turns out there are a few advantages to not having an expensive hunk of metal to care for, including:
- On average, it’s cheaper (about $150/month less).
- It’s great to not worry about your car (will it break down or get stolen/scratched/dented/broken into/ticketed).
- We save time on car maintenance and paperwork.
- All three of us are fitter, stronger, and leaner (details below).
- I feel more physically and socially connected to my neighborhood.
- Our carbon footprint is reduced (though still high — we sometimes fly on airplanes).
- I get to use my phone like a magic wand to summon friendly drivers to my house who arrive within minutes and take me wherever I want for a reasonable price and I don’t need cash not even to tip (thank you Lyft).
- Local grandparents have been great sports about having to drive a bit more (thank you!)
- Given our situation (we both work from home, our kid goes to school three blocks away, our neighborhood has a Walk Score of 91/100, local car-sharing options), we’re pretty much the ideal family to NOT own a car.
Back in February I calculated our average cost of car ownership at $440/month, as follows:
Recently something clicked for me, a reconciliation of the personal finance philosophies of Mr. Money Mustache and Ramit Sethi, two “rich life” bloggers I follow. The former retired in his thirties via ultra-aggressive savings and a serious no-frills lifestyle (drying clothes on the line, buying cheap staple foods in bulk, bicycle as main mode of transportation, etc.). Ramit, on the other hand, loves to ridicule budgeting (few really do it) and advises his readers that they are better off putting their attention and energy into earning more money (via starting online businesses, freelance work, side jobs, and/or negotiating higher salaries). Superficially it would seem that these two approaches are diametrically opposed, but a unifying principle revealed itself to me after a recent transportation experience. Don’t waste money. I’ll get into what that means (at least what it means to me) a little later.