SPENDING ON NECESSITIES

When thinking in terms of spending money, the vast majority of money should be spent on essentials. After meeting all necessities, any left over is discretionary and can be spent in accord with one’s desires. The key to spending on necessities is first to determine what is essential to maintaining living. Immediately, food and shelter come to mind. We need food to eat and we need a place to live. Note: homes are not investments. They are a necessity.

Work is therefore paramount that the necessities of life can be met. Part of this process of work is transportation to get to work and back home. This means having reliable transportation. As with all machinery, there will be maintenance expenses. Parts on vehicles eventually wear out and need replacing. What happens if you only have one car and your car needs repairs? This puts you in a bind, as our lives are dependent upon the use of the automobile.

The obvious solution is to have two cars. With two cars, if one need repairs, you have a back up. Renting cars can be an expensive proposition. It may be an alternative in the short run, but owning two cars gives you more flexibility and less hassles. The frugal, almost to a man, will buy used cars. Why used cars? Over the course of time, it will be less expensive than purchasing a new car. Remember, even new cars will need maintenance. With used cars, it is easy to justify carrying the minimum liability insurance. Insurance is something that must be factored into maintenance expense of a vehicle. The newer the car, the more insurance premiums you will pay.

Having two cars had its advantage for me this week. My wife was walking home from work, when she noticed that the front left tire of our Buick that was parked by the curb in front of our house was flat. That day, it had rained all day and it was too late to put on an alibi tire and go get a new tire. Because I had another car, I could wait two days before I had to put the alibi tire on and go to the tire store.

The place where I go to get tires has a business arrangement with the VA employees for $5 off for each tire and 10% off for labor. The associate at the tire store noticed that the other front tire was beginning to dry rot, so the flat tire was a blessing in disguise. I replaced both front tires and got $10 off. It is an advantage to have two cars. This example is illustrative of this point.