Thursday, 25 April 2013

Used Cars As Part of Debt Free Living

Used cars can be a part of a frugal lifestyle. In fact, some financial experts who specialize in helping their followers become debt free advocates only buy pre-owned vehicles for cash. Being in debt is like having an anchor attached to your ankle and dragging it around. One false move, and you could fall into the ocean of bills and sink.

One of the first steps in becoming free of debt is to build up an emergency fund. This rainy day account is put into place to pay for unexpected car repairs, broken appliances, a doctor bill, lost job, or anything else that might send you running to your credit cards for help. Some motorists are afraid that buying used cars might lead to more repairs than they can afford and so stick with new vehicles. With a rainy day fund in place, unexpected repairs aren't problems.

A recommendation that frugal zealots recommend is to start out buying used cars that can be paid for in cash. If you can only afford a clunker to start with, that's okay. The goal is to save up enough money to move up to the next tier of quality in pre-owned vehicles. Trading in the clunker with some more saved cash will buy a nicer pre-owned vehicle. The goal is to keep upping the ante until you are driving the pre-owned vehicle of your dreams without any monthly payments. Does this seem like an impossible dream? It's a tactic that many drivers have been successful with.

Along with driving a pre-owned vehicle that's been paid for in greenbacks, it's also important to progress on the path toward a more solid financial life. Other debts such as credit cards, personal loans, and overdraft-protection-gone-wild should be whittled away as well. It's often recommended that the smallest balances should be paid off first. Why? Because it will allow you to feel successful when you are able to cut up a credit card. This won't happen overnight, of course. It's a one-day-at-a-time plan that may take years but will build momentum the longer you stick to the plan. It's also important to add some dollars to the emergency fund each month so you could survive for 3 to 6 months if you lost your job.

Driving used cars can help you build a stronger financial house on a solid foundation. By starting small and paying off one debt at a time while saving a few bucks each paycheck, everyone with willpower can be debt-free eventually. Where there's a will, there's a way.

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