Libsyn Directory

82: Adulting 101 Series: Transportation

Release Date: 08/27/2019

MINISODE: Hurricane Hiatus - An Update on the Wealth by Design Podcast

Wealth by Design

Hello, loyal listeners! We wanted to let you know that we have a quick update on the podcast and a few things that are happening over at Toujours Planning right now. As you may know, we are a Lake Charles-based business and family, and our community, homes, and offices were devastated by Hurricane Laura in August.

MINISODE: Do You Need a Financial Advisor or a Certified Financial Planner™?

Wealth by Design

Do you need a financial planner? A financial advisor? An investment professional? A money coach? And what are those initials after their names?!

MINISODE: Are You Falling into This Stock Market Trap?

Wealth by Design

In this minisode, Dustin breaks down the Sir Templeton’s quote: “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.”. He also discusses timing the stock market, why it’s a bad idea, and what you should do instead.

MINISODE: Should You Have a Joint Account with Your Partner?

Wealth by Design

We’ll keep the intrigue to a minimum. In our opinion, the answer to this question is a resounding yes. Sharing your finances with your partner builds trust. Keeping them separate can breed suspicion and worry.

MINISODE: When Stock Markets Dip and Bounce Back

Wealth by Design

In this minisode, Dustin recaps what a stock actually is and how stocks are bought and sold. He discusses how people’s emotions cause those peaks and valleys in the stock market, and how you can avoid that dangerous herd mentality when it comes to your own investing.

112: Growing a Business & Wealth with Katell and Jon of Reverielane

Wealth by Design

Katell and Jon, a husband and wife design team, are founders of Reverielane, a purpose-driven brand and web design firm.

[Summer Remix] 102: Net Worth is King

Wealth by Design

We talk about fear a lot on our podcast. Fear is natural and, TBH, necessary. But fear can also make you focus on the wrong thing when it comes to your net worth. Paying down debt rather than building up your assets, to be specific. And that’s what we discuss in this week’s episode: where our fear of the “debt boogeyman” comes from, our three-step strategy on how to overcome it, and what part of your finances you should be focusing on instead.

[Summer Remix] 101: Robo-advisors: Your New Best Friend or Your Worst Enemy?

Wealth by Design

The robots have taken over. Just kidding. But, they have taken over a major chunk of the financial industry in the form of robo-advisors. But the truth is, we think robo-advisors are actually pretty useful. Of course, there’s a time and a place to use them, which is exactly what we cover in this episode of Wealth by Design.

[Summer Remix] 100: High Yield Savings vs. Stocks: Who Wins?

Wealth by Design

There are a lot of misconceptions about investing in the stock market, thanks to fear-mongering in the news, horror stories from family and friends, and a lack of education about the stock market in general. Your fears may also be why high yield savings seems like the better option for your money. In this episode, we talked about the differences between high yield savings and stocks. We know you’re probably a big fan of saving because it’s “safe,” right? Well, we’re about to rock your world.

[Summer Remix] 98: Leaving Behind the “Punch Clock” Mindset

Wealth by Design

The concept of a punch clock — punching in to start a shift and punching out when it ends — is ingrained in many of us, even as business owners who write our own checks and make our own schedules. But it doesn’t have to stay that way! On this episode of Wealth By Design, we talk about how you can start changing your mindset and your life right now.

More Episodes

Is it time to buy a new car? Are you wondering what you should be spending (or not spending) on your new wheels? We know that it’s tempting to buy the newest model hot off the lot, but this week’s episode offers some guidance on what to consider when it’s time to buy a car, how much you should spend, and what to look out for in your payments.

WHAT YOU’LL LEARN

5:20 The role luxury and status have in our purchase decisions

7:45 Why it’s important to consider why you’re buying a car

8:15 Why buying luxury car is not a problem — as long as you can afford it

10:00 Things to keep in mind with a car purchase, including additional costs

12:05 The risks of unexpected maintenance

13:50 How to break down the true cost of a vehicle

15:05 Deciding if you even need a car

15:25 What percent of income should be allocated to transportation, but only if you’re saving enough money

16:20 How everyone’s values will affect how they spend on transportation

18:25 How to pick a car that aligns with your values

23:45 What to do if you and your partner both have cars/car payments

26:00 When you might need to just buy a hooptie

27:10 The trick to get those dents fixed ;)

28:00 Whether or not you should pay off your car when you come into cash

29:45 Tips and tricks for saving money on vehicles and loans

CARS ARE CRAZY EXPENSIVE

If there’s one universal truth to take away from this episode, it’s that cars are a luxury at this point — especially new cars. The average cost of a new vehicle is $37,285, according to Kelley Blue Book, and the average used-car price was $20,200 according to Edmunds — and we think that’s on the low end. But those averages also don’t account for supplementary (or additional) costs associated with vehicle ownership. Costs like:

Insurance
Parking costs (garages, meters, etc.)
Tickets
Tolls
Maintenance
Gas
Car washes/upkeep

With all that in mind, it’s time to dig into what kind of vehicle you can actually afford.

HOW TO FIGURE OUT WHAT KIND OF WHEELS YOU CAN AFFORD

The first question we think you should always ask yourself when you think about vehicle ownership is: Should you actually buy a car? We don’t care what the answer is, but it’s important that you ask it. And from there, we have a follow-up question: Can you afford it?

Here’s a general rule of thumb (meaning that it’s not a strict rule, so much as a guideline): About 15-20% of your income should be spent on transportation. Our one caveat to that? Only spend that if you’re already saving 20-25% of your income. If you’re not able to save right now in the double digit percents, you may reconsider your ability to buy a higher-end car — or a car at all. Instead, you might want to find a car that fits into the lower percent of that 15-20% range or get real comfortable with not having a car until you can pump up those numbers.

What if you can’t afford a car right now? Well, do you live in a city with transportation, do you live close to where you live and work, or do you have easy access to other modes of transportation (bumming a ride from a coworker, borrowing a car from a family member, etc.)? Uber and Lyft are also great options, but they can add up, so be careful with that. Considering all of these factors may help you find ways to go without a car until you’re more ready.

If you’re in a situation where you don’t have your personal finances in order, you may need to buy a hooptie. You know, a real junker car. Nobody loves having one, but they serve a purpose: saving you money so you can get your finances right.

Of course, if you decide you do want to buy a vehicle — and can afford it — the next question is: what kind?

CHOOSING YOUR WHEELS

The first question, when you’re in the market to buy a new car, is: “What matters most?” Comfort, amenities, luxury, environmental impact, etc. are all acceptable factors when considering a new (to you) car. There’s also another factor: status. If status is important to you, and you have the money to back it up, go for it. But admitting that to yourself first is key.

However, we think status comes with a price tag that a lot of people don’t really want to pay, so dig a bit deeper on what “status” means to you. Is it having all the bells and whistles of a higher-end car, but you don’t want the price tag or care about the brand name? Sometimes even the cheaper brands have the same amenities as higher-end brands, and you can spend a lot less on a Toyota than you can a Tesla.

If things like better gas mileage, electric power, or space enough for friends and family are important to you, decide how much that’s worth. And don’t be afraid to shop around. Buying a certified preowned vehicle is also a great way to get all the bells and whistles without losing a ton of money as soon as you drive a brand new car off the lot.

MANAGING DOUBLE PAYMENTS IN A RELATIONSHIP

If you’re in a relationship, the question is likely: How do we manage two car payments? Because, the way the universe works, you will both need a new car at approximately the same time. It’s just a fact of life. But if you have a spouse or partner who can hold on to their car a little longer (or your ride is still going, albeit with less enthusiasm than before), you can stagger payments that way.

Alternating your car purchases is a good way to keep costs down, and to not pay double car payments. Of course, it might be possible to share a car between the two of you (depending on your situation) if you’re in a pinch, want to save the environment, or just save a few hundo a month.

PAYING INTEREST ON YOUR VEHICLE

One of the biggest questions we get is: “Should I pay off my car note if I’ve got extra cash?” As a general rule of thumb (remember, not a strict rule), we say: If your interest rate is 6% or lower, you don’t have pay it off before the term is up. We say that because your money is likely put to better use being invested and saved, because you can get high rates of return.

However, if your interest rate is over that percent, or you’ve been swindled by a bank or dealer, you may want to pay off your car loan or refinance. Refinancing your car with your bank or credit union can save you a ton of money on interest. But if you already have a really low percent — like 3% or lower — you’re sitting pretty.

TIPS TO SAVE MONEY ON YOUR NEXT VEHICLE

We’ve purchased a few cars in our day, and so have our friends. In this episode, we pass on some of the wisdom we’ve learned from our own experiences, as well as theirs. These include:

Always ask for the invoice amount.

The vehicle invoice is the dealer’s cost on the car, and we’ve heard that you should only pay about $1,000 over their invoice amount. You’d be surprised how much dealers make just by adding thousands of dollars to the top of their invoice amount, so don’t be afraid to ask to see the invoice.

Ask a dealer what their buy rate is.

Most of the time, dealers offer to finance your vehicle for you. Before you go with their rate, though, ask what the buy rate is. The buy rate is the interest rate the bank charges them, and the dealership charges more on top of that. This can lead to you pay 2% and more on your loan! We think half a percentage or more is all you should be paying.

KNOWING WHAT’S RIGHT FOR YOU

At the end of the day, nobody can tell you which car, interest rate, or monthly payment is right for you. If you decide you’re ready for a new car, truck, or SUV, we hope this has provided some guidelines to help. Of course, if you’re looking for financial advice specific to your situation, you can always take our Toujours Planning Quiz below to see if we can help.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.