Some of you may know my story, some of you may not. I am really not bashful about sharing it because I want people to learn from my mistakes. I recently realized that I want to share with all of you the same things I want to share with my three boys. If I can teach you something before it happens, I will save you from the same pain and frustration I went through. For a year and a half now, I have been driving around a really cute little Camry. Yes, I have had three boys and three car seats squeezed into the back of this little Toyota Camry for the last 20 months. Although I love this car, it has not really been a cup of tea. Let me go back and explain a Cliff Notes version of my story.

In June of 2004, I had a little Honda Accord very similar to my Camry in the picture. I gave birth to my second son that same month. I quickly realized (like on the way home from the hospital) that a 2 year old and a newborn with a rear facing car seat do not fit well in a Honda Accord. My husband and I went out and purchased a used Ford Expedition. While it served us well in size for three years, being raised with Honda’s I was disappointed in the repairs I had to perform in those three years with such low miles on the Ford. In August of 2007 I had had it with the Ford and its repair costs so I went and bought a fully loaded 2007 Toyota Sequoia Limited brand new…for $55,000. What was I thinking? Don’t ask me because I don’t know. I went home so excited that night. However, the proof is in the pudding (as they say). I was up all night that night, sick to my stomach trying to figure out how I was going to pay the $726 a month car payments for the next five years.

Long story short, this was the same time the gas prices decided to jump up over $4 per gallon. I was spending about $1,000 per month on my car alone. Holy cow! I started to panic in August of 2008, the economy was starting to go down and my husband’s electrical work was starting to slow down significantly. I called my friend who is an auto broker and she found me this beautiful Toyota Camry for a great price…but it was still brand new. I was $7,000 upside down in my Sequoia and I had to fully finance the Camry. My kids barely fit in the back seat, but I had to make it work because we were going to sink if we kept the Sequoia. So, I have been driving around this cute, sporty and fun Camry for the last 20 months. However, when my children were in the car, I was pulling my hair out.

“Mom, Shawn keeps looking at me!”

“Mom, Nathan is touching me!”

“Mom, Derek is punching me!”

“Mom, he is breathing in my space!”

I just couldn’t take it any more! For the safety of my children and my sanity my husband and I started to look around for USED full size SUV’s. My instinct is to make a decision and make it happen…quickly. However, when I mentioned this to Lindsay, my Tax and Accounting Manager, she advised me her Dad was an auto broker and did this for a living. Between her and her dad, they gave me some insanely good advice on buying a car. Here are some of the nuggets of information that saved me these last couple of weeks.

1. Patience, Patience, Patience – Wait for the right car to come to you. Take your time, there is absolutely no need to rush this. You are going to be driving this car for years. Be patient and everything will fall into place.
2. Do your homework – Look around on the internet, go to Carmax, look at other dealers for exactly what you want. Test drive all of the cars you are even considering purchasing. Find out everything you can about the different cars, resale value, maintenance and repair records, Carfax reports, Consumer Reports. This is one of the largest buying decisions you will be making throughout your life, don’t take it lightly.
3. Buy used over new – I have always purchased new cars (except for the Expedition), but honestly, I have learned that it makes a lot more sense to buy something used. You lose an enormous amount of value the moment you drive off the lot with a new car. Even if it has 10,000 miles, you can get a screaming deal with a used car and you won’t take such a hit driving off the lot.
4. Know your price point – Figure out what your budget is and don’t let someone persuade you to go over that. You have to stand firm. On the other side, don’t set it too low and then jump all over the place. Do your homework up front and stick to it.
5. Start looking when you feel the urge, don’t wait for it to be urgent - I clearly waited too long to start looking for a new car. I was so anxious about it I was tearing my self up every time I got in the car with my boys. Once you start to feel the need for a new car, start your search with patience and clarity.

I ended up getting a great deal on a used 2007 Toyota Sequoia this weekend. Half the price of the last one with almost the same options. This was the picture I took of my little Camry before we left for the dealership. I was sad to see her go. She was a beautiful and fun car to drive, just not with three little boys in the back seat. :0)

Have you ever thought about where your money goes?  I am sure you have some kind of idea when it comes to what bills are due at what time, etc.  However, I am talking on a deeper level. It is pretty easy to split your spending into two categories:  Money that is spent on assets (things that increase in value) and money that is spent on expenses (things that will decrease in value).  Do you ever wonder how the rich get rich?  They spend more of their money on assets than they do on expenses. 

I know it is impossible to not spend your money on things that decrease in value.  However, it is possible to limit it to things that are necessary.  I also know that the housing market here in California (and across America) has taken a bite out of our confidence in home ownership. 

But, do not let that sway you.  I remember watching a national morning news show one weekend morning and they had a guest on that said something that really resonated with me.  He said if you want to be rich, start with owning a home. 

With all that said, here are a few steps I recommend to start heading in that direction.

• Pay attention to how you spend your money.  Limit your expenses to the necessities.
• Try to live below your means.  By doing this, you will find you have more money in the bank (which always feels good).
• I realize home ownership may not be in the cards for everyone right now, but that does not mean it is out of the picture forever.  If you have the dream of owning a home again, make it a priority now by saving money for a down payment and/or rebuilding your credit.
• Before you spend your money, think about how it will affect you or your family in the future.  Does it have an effect at all?  If you feel the effect will be negligible or  negative, you may want to rethink the purchase.

Think before you spend…

In this economy, I have found that the littlest things can make a big difference. They are:

Have you ever thought about how you feel when you buy something?  I never used to.  I walked around wearing Coach shoes and driving a $55,000 SUV (that I really couldn’t afford), thinking I had it all together…or at least that I looked like I had it all together. 

I have been going through a primal shift over the last several months.  This shift really began the day I realized that the SUV I was driving was really a very large anchor pulling me down in the sea of life.   MORE