I must have had been in touch with reality at least at one point in my life. At least for a few brief moments in college. Too bad it wore off fairly quickly.

By 19, I had saved up $10,000 for a car. I did so by working 40 hours a week through winter breaks and summers. Two months of the summer I actually worked 14 hour days for 6 days a week. I researched exactly what I wanted, went into the dealership with my check, and left with a reliable car with only 15,000 miles on it. My intention was to keep the car until it started to need significant repairs. I expected it should easily last 3 years into my first job. Giving me 3 years of extra money to pay down my student loans and get on my feet.

Well, I should have written that down, framed it, and hung it on the wall. Because I didn’t listen.

Flash forward 2 years: I just graduated and landed a job with a salary overwhelmingly high salary. Pulling into the parking lot at work everyday was like a luxury car dealership. Even all the other entry level workers were buying into it. Only difference is, their student loans were miniscule in comparison to mine. Or even better, most were non-existent.

Needless to say, I fell into this non-reality dream world pretty quickly. I just thought this was the way it was. Everyone had nice new cars and money for anything wasn’t really a worry. Three months later spring came. I noticed lots of convertibles on the road. I just had to have one. In less then a week I found a model I had to have and calculated all the ‘necessary’ options.

Hungover, from a late night at poker the night before, (Mistake #1) I dragged B out of bed for an appointment at the car dealership. I left a few hours later in a brand new car. With that came a loan for $30,000 and a payment of $670 a month for the next 5 years (Mistake #2). But you wouldn’t know that if you saw the smile on my face. I remember the guy calling me “hot” in my new car as I drove away. I agree that is odd but I shrugged it off.

Without going into all the details I can summarize my time in the dealership all by mistakes. The only thing I did “right” was research the invoice pricing and options I wanted ahead of time.

 

1. I left behind my paid in full car for a trade-in $3,600. It was 4 years old with 60,000 miles on it (Mistake #3).

2. I thought it was a good idea to leave it as it was. It had a severely overdue oil change (obvious by the sticker on the windshield), no maintenance records, and had not beeen cleaned since our 20hrs of road trips from going back and forth before moving to DC. Undoubtedly showing them my car was not worth anything (Mistake #4).

3. I did not check my credit report or look for financing from outside sources. I thought my interest rate of 8% was a good deal! I realized a few months later that one of my student loans never received my updated address and was reporting me as 180 days delinquent for several months prior (Mistake #5).

A quick calculation shows that I could have saved at least $7,121 of interest (just in the past 3 years alone) if instead I had applied this money to my student loans. Giving me a total less debt of $37,000 when including the cost of the car. Even if I were to sell now and buy a clunker, I would still be out $14,121 through extra interest paid to loans and a loss in value of the car. This all happened from a few months of bad judgment. I am embarrassed to say the absolute least.

 Remember, it usually is the momentary lapses that can affect your bottom line the most.

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