Buying a New(ish) Car, Saving $500,000

Some months ago, the driver’s side window of our minivan stopped working and wouldn’t go down.  Next, as it got warmer, we noticed that the air conditioning wasn’t able to do much to cool the air if was much over 75° outside.  And there was that self-inflicted damage to the car’s front grill panel, which occurred years ago, that I had fixed (literally) with duct tape and coat-hanger wire.

Then, a few days ago, came the straw that broke the minivan’s back, so to speak: the annual safety inspection.  The news wasn’t good.  The car wouldn’t pass inspection with a non-functioning window.  The inspection also showed that the headlight lenses were fogged up with road-wear scratches and needed restoration and one headlight had water inside the housing assembly.  All in all, it looked as if the car needed at least at least several hundred dollars worth of work to make it pass inspection (the window, the headlights) and more hundreds of dollars to make it comfortable (the air conditioning) and hundreds more to make it less of an embarrassment to drive (the front end grill).  It was a 2004 model, so it seemed reasonable to use it for a trade-in and buy another car.

Given that our time with this particular 2004 Honda Odyssey (“Redrock Pearl” a.k.a. “Burgundy” with “Ivory” interior, evidently) has come to an end, it seems a good time to get an idea what it cost.

car_invoiceWe bought our 2004 Honda Odyssey for $16,551 on March 9, 2010.  That price included a 2-year warranty (which was probably not worth what we paid for it).  It was a remarkably dependable car.  We had only two completely unexpected repair expenses, which totaled about $1,700.  (Of course, we did have the usual driving and maintenance expenses for gasoline, oil, coolant, transmission fluid, brake jobs, a couple batteries, and a serpentine belt.  But those would have been more-or-less the same regardless of which minivan we purchased.)  Let’s say that the cost of the car itself was about $18,250.

We drove the car regularly from March 2010 to May 2017, over 86 months total.

Considering the cost of the car and the time we used it, we spent about $210 per month or about $7 per day.  (Again: this is only the cost of the car itself plus major repairs, and not the total cost of driving, which would have to include operating expenses.)  Incidentally, the odometer was showing about 60,000 miles when we bought it and had reached 180,000 when we traded it in, so the cost of the car for 120,000 miles of driving was about 15¢ per mile.

Looking back, I am pleased that we purchased a used — ahem, “pre-owned” — car.  Had we purchased a new car in 2010, it would have cost about twice as much, meaning we would have spent about $400 each month on just the cost of the car itself.  In other words, over the past 7 years, we’ve been able to save and invest roughly $15,000 (which is, coincidentally, approximately the cost of the car itself.)

This method of saving money — buying used cars, paying for them as fast as possible, keeping them for a long time — allows us to save and invest over $2,000 each and every year.  This can easily amount to perhaps $100,000 ($2,000 per year for 50 years) worth of investments over a lifetime.  An extra $2,000 per year, with compounded earnings, for 50 years might grow to $500,000 or more.  A half-million dollars for driving used cars?  Sounds good to me!  Remember: In order to have at least $1,000,000 in your retirement account by the time you need it, you need to save several hundred dollars each month (more or less, depending on when you start investing and the returns you get on your retirement investments).  The savings you get from buying used cars can go a long way towards the amount you need to save each month.

We were so happy with our old car — the Honda Odyssey — that we decided to get another one.  And guess what?  It’s the new car that we could have bought 7 years ago!  Yep, we now own a 2010 Honda Odyssey that will probably be saving us money for the next 7 years.

Removal Salt, Avoid Rust

In much of North America the last snow of the winter usually occurs sometime in February or March, which is also the time of the last road salting.  Once the salt is gone — and it’s good to wait until there’s been a heavy rain that gives the roads a good rinsing — you will want to get the road salt off your car.  You could go to the local car wash and spend money … or you could avoid convenience and save money by doing it yourself.  I’ve always gotten good results with a bucket of warm water mixed with a little dish-washing detergent.  Apply with a large sponge, scrub, dump the remaining detergent-water mix over the car, and rinse well.

auto_rustHowever, removing the road salt from your car’s unpainted undercarriage is even more critical than washing the car’s body.  It’s the metal parts under the car that can be damaged by salt’s corrosive powers.  The painted body can usually withstand contact with road salt pretty well.  Also, the top of the car gets rinsed by the rain.  The underside of the car isn’t exposed to rain.  Most people know this, which is why commercial car washes offer an “undercarriage wash” and why they do such a good business after the end of the snowy season.

But you don’t need to pay $$$ (not to mention, wait in a long line) to give your car’s undercarriage a good washing.  You can just use a garden hose and a sprinkler.  When I wash the car for the first time after the last of the winter snow, I attach a lawn sprinkler to the garden hose, turn on the water, and use the hose to slowly push the sprinkler back and forth under the car.  It’s a good idea to avoid spraying too much water into the engine compartment.  You might need to get down on your hands and knees to make sure the water is directed at the wheels and suspension.  There are actually special tools that attach to a hose to perform the undercarriage washing.  Some clever people have made their own.  In my honest opinion, it seems that a lawn sprinkler works just as well. The whole point is to get the salt off your car, and because salt is water-soluble, all you really need to do is get water into contact with the underside of the car.

It takes a little time, but … as usual, avoiding convenience means you’re paying yourself instead of paying someone else.

(However, if you search the internet you can find lots of people saying that you need to use some kind of special salt-removing product to really do a good job.  All I can say is that the sprinkler method has worked for me, but as the saying goes, your mileage may vary.  What’s happened to me is anecdotal.  I haven’t owned enough cars to do a scientific study.  It might be that my car is less susceptible to rust or maybe I reduce my driving when roads are icy and salty.  (The second part is true.  I really do try to avoid driving when there’s ice and snow on the roads.)

Inspiration From Youtube

As I’ve mentioned elsewhere, your thoughts become you deeds.  Thus, if you control your thoughts, you end up controlling your deeds.  That’s called self-control and it’s essential if you want to reduce your spending and thus be able to increase your saving.  One way to control your thoughts is by listening, reading, and watching media on the subject of personal finance.  You can find podcasts and radio shows, books, and (of course) videos.  Here’s an example.

Maybe not everything mentioned in this video is applicable to your situation.  Okay.  So find another video.  You know how to work the internet don’t you?  Then you can find books at the library or among the used books at your local thrift shop.

Finally, I’ll mention that as you get lots of personal finance advice from a variety of sources, some of what you’ll hear or read might be not only not applicable to your situation … it might also be downright incorrect or untrue.  But that’s okay.  If something isn’t true, remember that free advice is sometimes worth what you pay for it.  And it isn’t just the actual factual content that you’re looking for.  It’s also the inspiration that comes from seeing and hearing someone else talk about doing what you want to do.  Just knowing that other people have done it should show you that you can do it too.  That’s one reason why The Richest Man in Babylon is still one of the best books about personal finance, despite the fact that it’s almost 100 years old.  So get inspired and save money!

Tightening the Newel Post

The newel post (the large vertical post at the bottom of the handrail on the stairs) at my house had gotten loose in recent years  Tightening a newel post is certainly an easy do-it-yourself job for anyone who has an electric drill and knows their way around a hardware store.  What I did was basically the same as what Tom Silva does in this video — except I used two screws, one in a tread and one in a riser.  Good tip, using a carpenter’s square to make sure the drill stays level.

Cutting the Cheese

cut_the_cheese“You don’t mind if I cut the cheese?”, I asked my colleagues eating lunch with me at our workplace cafeteria.  As I said it, I held up the table knife I keep at my desk and the block of cheese I was eating that week (and probably the next week too).  It was a good cheddar I got at Costo.  As in most everything, it pays to avoid convenience and do the work yourself.  In this case, I was cutting the cheese to have with the crackers and salami I was having for lunch that day.  Just like the way I pay myself to carry a box of snacks to work (instead of paying the man that stocks the vending machine), just like I pay myself to bring my own iced tea to work, I can also pay myself to not only bring the cheese to work, but to also to cut it into slices.

Make Your Own Soap

The basic principle of avoiding convenience applies to soap.  You can make your own soap and save money in the process — and probably get better soap.  Exact soap-making instructions are a bit beyond the scope of this blog (you can find plenty on the internet and there are lots of instructional videos on youtube), but I’ll give an overview of the basics.

All you need are three ingredients:

  • Fat (such as lard, coconut oil, or olive oil)
  • Lye
  • Distilled water

You can also add some other ingredients for scents or added effects (such as lavender, peppermint, honey, oatmeal, and various coloring).

The preparation method for basic soap-making is

  • C-a-r-e-f-u-l-l-y add the lye to the water (rubber gloves and eye protection are mandatory)
  • Warm the fat over low heat
  • Get both the fat and lye-water to the correct temperature (which usually means warming the fat while waiting for the lye water to cool)
  • C-a-r-e-f-u-l-l-y blend them together
  • Mix until thickened
  • Add any optional ingredients
  • Pour into molds and cover
  • Allow to cool slowly
  • Remove from molds
  • Allow to cure in the air for several weeks

That’s all.

homemade_soapYou can get very creative with the scents, colors, molds, and packaging.  You might be inspired by the soap-makers in your family tree.  (“Your great-grandmother used to make her own lard soap in the backyard.”)  You might explore the soap-making traditions of your ancestors.  (“This is the kind of soap they made in the old country.”)  Once you’re a skilled soap-maker, you have an excellent and one-of-a-kind unique gift for all-purpose giving.

You’ve probably heard that lye is dangerous.  It is dangerous.  That’s why you wear gloves and safety glasses.  You should also wear long sleeves and pants.  It’s also a very good idea to work with the lye outside, as combining lye and water creates toxic fumes.  But, in my opinion, the danger level isn’t so inordinately high that soap-making must be left only to professionals working on an industrial scale.  I’d say it’s not too far from the danger level of making using hot oil on a stove to make a large batch of french-fries.  Of course, you do need to be careful and, to repeat for emphasis: wear safety glasses.

Do some research and if it interests you, procure the ingredients and make a batch.  You should find a tried-and-true recipe and follow it exactly.  Measuring quantities and temperatures precisely is absolutely essential when you’re making soap.  It’s not like making a stew or soup that you can easily vary by adding more of one ingredient or less of another.  The fat, lye, and water must be combined in the correct amounts and at the right temperature for saponification to occur.

Depending on what fat you use and how you obtain it, I think there’s a good chance that you’ll find the money savings and the high quality of the product are worth the effort.  You might come to see, as we have in my household, that making your own soap isn’t much different than making your own breakfast, lunch, and dinner.

Finally Got a Smartphone

galaxy_lunaIn an earlier post I wrote that I didn’t have a smartphone and was getting along fine using my dumbphone that did nothing but make calls and play MP3 files.  It finally stopped working.  So I bought a smartphone, mainly because the cheapest ones cost about the same as the dumbphone I bought a few years ago.  It’s cool being able to use wi-fi to look at websites and read Wikipedia (on an app that uses the text stored in the phone’s memory).  I still mostly use it as an MP3 player.  I still use a prepaid plan and my cost will still be around $10 per month over the life of the phone.

Replacing Fluorescent Tubes With LEDs

It’s well known that LED lights are much more efficient than incandescent or fluorescent lights.  They use less electricity and last much longer, making them well worth the initial cost.  For me, the long life is the real advantage because it means I’ll spend far less time buying and changing bulbs.  Swapping screw-in incandescents led_tubefor screw-in LEDs couldn’t be easier and everyone should do it.  I did that years ago.

Recently, the fluorescent tubes in my basement laundry area (which date from the time before household LED lights became available) stopped working.  Because they both stopped at the same time, I suspected the ballast might need to be replaced.  While researching ballast replacements, I became aware that LED tubes for replacing fluorescent tubes are now available.  The advantages of LEDs make swapping them for fluorescents the obvious thing to do — but doing it isn’t as easy as unscrewing one bulb and screwing in another.

It’s the ballast (which is “used in fluorescent lamps to limit the current through the tube, which would otherwise rise to a destructive level due to the negative differential resistance artifact in the tube’s voltage-current characteristic” according to Wikipedia) that’s the issue.  “What to do with the ballast?” is the question

Keeping the Ballast.  The easiest way to convert fluorescent fixtures to LED is to replace the old fluorescent tubes with LED tubes that are specially made to work in fixtures with ballast.  Just take out the fluorescent tubes and put in the new LED tubes.  However, that’s probably not the best way.  In general, LED lights don’t require ballast, so you’re buying an LED light that is made to work with ballast.  In fact, because it’s made to work with ballast, you shouldn’t use it in a fixture that doesn’t have ballast.  There are two problems with keeping the ballast: (1) it will eventually fail (which will leave you in the dark) and need to be replaced, (2) it uses electricity, so keeping the ballast partially offsets the savings you get from using LED lights.  To avoid spending money for ballast replacements in the future (the life of the LED might be 4 or 5 times the life of the ballast), and to avoid spending money for electricity consumed by a ballast that isn’t even necessary, I decided to remove the ballast from my basement fixture.

Removing the Ballast.  It’s fairly easy to remove or at least bypass the electrical ballast in a fluorescent fixture, thus converting it to use LED.  You just need to open the light fixture, cut a few wires, and make a few connections with wire nuts.  There are lots of directions online.  However, there are two ways of doing the re-wiring.  (See, I told you this wasn’t as easy as replacing screw-in incandescents …).  You have the choice of either (1) running the live wire to one end of the fixture and the neutral wire to the other end, which is the standard way fluorescent fixtures are wired, … or … (2) running both the live and neutral wires to the same end of the fixture.  Method (1) requires LED tubes that are called “double ended” or “dual end powered”  Method (2) requires LED tubes that are “single end powered”.  It’s probably best to buy the LED tubes and do the re-wiring accordingly, because “single end” tubes require a different kind of lamp holder (a.k.a. “tombstone”).  However, note well: The wiring job has to match the tube type or your light won’t work.

To review, the choices are:

  1. Use an LED tube designed to work with a ballast (easy, but you have the cost of ballast replacement and electricity consumption).
  2.  Use an LED tube designed for use without a ballast (requires re-wiring the fixture, but eliminates cost of ballast), either
    • doubled-end LED tube, or
    • single-end LED tube

Also, LED tubes are available with either clear or frosted plastic covers.  The clear tubes are a bit brighter, but are harsh if you happen to look directly at them because you can see the actual LEDs.  I wouldn’t use them in any location where the tube itself is visible.  They might be good for recessed lighting or maybe in a fixture that has its own light diffuser.  The frosted tubes are more like traditional fluorescent tubes, bright but not harsh on the eyes.

Almost-Free Iced Coffee

iced_coffeeAt a church meeting I recently attended, someone made a pot of coffee.  When the pot was empty, another pot was made.  After the meeting was over, the coffee pot was still about 1/3 full.  No one wanted another cup.  I don’t normally drink the stuff.  (What kind of person, I wonder, would take beans from some plant, roast them until they’re nearly burnt, grind them into powder, pour boiling water onto that powder, then drink that water?)   I had my own water-bottle, filled with iced tea, which I had finished.  Before someone could dump the unwanted coffee down the drain, which was about to happen, I quickly rinsed my water-bottle and poured the coffee into it.  As soon as I got the coffee home, I put it in another container and refrigerated it.  I wanted to minimize the risk of the water-bottle I use for iced tea being ruined by the coffee taste, so I washed it as soon as it was empty.  The next day I had all the iced coffee I wanted, for nothing more than the cost of some ice and milk.

The moral of the story is that if you look around you can always find things that people are getting rid of that can be of benefit to you if you do the work of obtaining them and re-purposing them.  Get in the habit and you can get lots of things for free.

Using $-Off Promo Codes

amazon_862A couple weeks ago, Amazon announced a special deal: $8 and some change off any order of $50 or more.  Pretty good — over 16% off.  But be careful.  If you’re trying to use money efficiently, then you need to remember that when you use a coupon you only save money if you buy something you were going to buy anyway (and of course, the Amazon price has to be as good as or better than price you normally pay).

I used the promo deal to buy the same kind of snacks I usually buy by the box to keep at work, thus avoiding buying anything from a vending machine.  Because the Amazon price was comparable to the usual price, I’ll save 16% over the time it takes me to consume the snacks.  Given that “a penny saved is a penny earned”, I’ve earned over $8.  Is there any other way to earn $8 on a $50 investment in just a few weeks, with 100% certainty?  No, there isn’t.

But what if I had used the promo code to buy something I just wanted, but didn’t really need.  Say, a fancy new shirt … when I have already have plenty of shirts, probably all I need for the next few years.  (And, I often get new ones for birthday or Christmas.)  If I had bought a new shirt for $50 and used the promo code coupon to reduce the price to $42, wouldn’t I have saved $8?  No.  Using the promo to buy a new shirt I didn’t need would not have been a savings of $8 — it would have been an expenditure of $42.