Moving Out Of Beaterville
Matt has a beater car that just died. He has $3,000 in his emergency fund so far. Does he fix the beater or send it to the junkyard and buy something better?
QUESTION: Matt in Las Vegas has a beater car that just died. He has $3,000 in his emergency fund so far. Does he fix the beater or send it to the junkyard and buy something better?
ANSWER: You could be in a better beater than that one patched up. If you shop around for $3,000 and you know what you're looking for, you look for something that's ugly but very, very reliable. Here's the thing I had to remember: I have figured out that I had this mentality that there was something extremely permanent about buying a car. If you're paying cash for them and moving up as your financial world is changing, you don't have to keep one but a month and trade it again. As long as you're not buying a new car every time and losing your butt every time you drive it off the lot, there's nothing wrong with trading cars all the time. But we have this weird thing—like buying a car is like adopting a kid and you have to keep it. You don't have to keep it.
You do need to be wise. You need to be smart about it. But by this time next year, you're not driving that car anyway because you're going to finish the emergency fund, and then the first thing you're going to do is move up out of Beaterville. Save up and buy you a $10,000 car. You're not that far from doing that. It's not like this is a five-year decision. This is a five-month decision.