99 problems and money is definitely one of them.

I’ve made many great purchases. I’ve also made many bad purchases. But I could tell you this, I don’t spend a great deal of time in remembering those great purchases as much as I spend on dwelling on some of those bad purchases, and some of those bad purchases still haunts me to this day. I don’t know about Jay -Z, but out of my 99 problems, money is definitely one of them. 

As promised from the last update post, I wanted to share about my own financial journey. So this post is about two bad financial decisions that have left a mark in my checking account ever since: it has to do with buying and leasing two cars within two years and life lessons that were gleaned from those incidents. 

I was twenty at the time. That year I was working two jobs, one was paying $15 an hour and the other $10 hour. Both were part-time jobs while I was going to Culinary school. I was driving a reliable Infiniti. The car ran great. It had a powerful engine, I could zip in and out from lane to lane easily. it was replaced with a new transmission and it had a few scratches on the bumper.  Day-after-day I looked at the bumper scratches with contempt and after a while,  I declared that I needed a new car. But not just any car or a new used car but a brand new-off-the-lot car. 

So the next thing you know, I walked into to a local Hyundai dealership, like a sheep walking into a territory of wolves. I knew I wanted a black Elantra and had no idea how financing a car actually worked. At the time, I remembered how easy it was for my friend to drive a brand new-off-the-lot car for only putting $1000 down and commitment to paying $300 monthly. I later learned that agreement was called a lease. 

If I could have given my twenty-year-old self some sound advice then, it would have been to not wear all my excitement on my face. I was like a kid in a candy store. I could not contain the excitement and the enthusiasm to finally drive off with a brand new car. I am sure that the salesman was chuckling in his mind as he repeatedly told me when showing me the car, signing for the car and handing me the keys to the car that the dealership was doing their absolute best to get me “the best deal possible.”

With no negotiating skills at all, I quickly agreed to the terms and I bought my first Elantra.I learned later that there are plenty of dealer, manufacturer and local discounts that you have to research ahead of time to get “the best deal possible.” In the end, I put $5000 as a down payment and the agreement was that I paid $298 a month for five years, and then the car was mine. 

A year later after making all the payments in on time, I convinced my dad to also purchase a Hyundai. On New Year’s Eve, I went with him to purchase his car. As he was finishing up his paperwork for his car purchase, one of the salesman asked me how I liked my own black Hyundai. He entertained the idea that he could trade my current car for the limited model for only $25 more, but the catch was  for me to agree to trade in my current car that I was intending to buy for a lease agreement. In other words, when the lease agreement was over in three years, I had to return the car. Had I known, that new years eve was one of the last days to make a quota before the New Years, maybe I would not have agreed to the salesman proposal. But I couldn’t see through the B.S. I completely flirted with the idea of leather seats and having the option of having a sunroof. 

My dad sitting right next to me saw me beaming with new excitement. He tried to persuade me that it was a bad idea, attempting to roughly show me the figures. When he realized that his advice was going through one ear and out the other, he knew there was no one who would convince me otherwise. 

I left that dealership excited just like the last year not realizing that I had unknowingly given the $5000 down payment and all the monthly payments from the previous year away- all for the sake of driving a limited model with a sunroof that I barely used and leather seats that I never cherished. 

In hindsight, I was not in a position to buy a new car. I was a student who worked hard in my part-time job, but just because I worked hard did not justify both those purchases. With all the money I used to pay for the first car and the lease car, all that could have been money used elsewhere. 

By this year, if I had not leased the car and paid an extra year for the first car purchase while I was away abroad, I would have been able to drive a car that was paid off by the time I got home. 

It might be disappointing to hear me repeat the same mistake twice but nevertheless, it was a powerful lesson- a lesson that was financially painful and necessary for me to learn the power of contentment and recognizing the power of greed. Because contentment is about enjoying and appreciating what I have and with contentment I have a more accurate idea of what it means to live within my means while greed has a way of distorting someone’s ability to discern the differences between needs and wants. 

When I’ve brought up the incident to my dad and among other bad decisions I’ve made in the past, he graciously quotes that it’s better to learn earlier than later and I agree with that. So although I wish I had a car that was payment free waiting for me at home, it is what it is, and now I have these experiences reminding me to strive to do better in this problem called money. 

Thanks again for reading,

Sam

cars-in-a-shopping-cart

Photo By : Business People

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s