About cars 🚗
No, not the Disney movie from 2006, although I can recommend that one. But the question we will answer is: can you live on a tight budget and still drive and own a car?
Should I get a driver’s license?
Most people will during their younger years get their driver’s license. It makes perfect sense. From your 20th till your 80th, there will doubtlessly be moments where having your license is helpful. But won’t self-driving cars become a reality? Good question. As a kid, I would read books, that were published in the 1970s and 1980s and that predicted self-driving and self-flying cars by the year 2000.
But, since our frakking with progress (I will write a separate article about all the things that went horribly wrong since 1914 and quickened since 1971) has stalled the development of self-driving cars, it seems reasonable to say that for the next decade or two you can still get a Return Of Investment from a license.
There are some cautions, however. Getting a license will cost you roughly €2000-€3000. That might be 1/6 (2 months) of salary. This is the kind of expense that you can only take on when you are young, living rent-free at your parent’s place, and have a job or substantial savings.
I think that overall, it is a good investment to get your driver’s license, even if in the end you’ll end up mostly going places on foot, by bike or on public transport. Why? Because part of the process of getting your license is also learning the local traffic and road laws. Even while riding a bike, knowing the laws that the surrounding cars should abide by, is very useful and might one day even be lifesaving.
Should I drive a car?
I, personally, love driving, especially when there are not too many other cars around.
I’ve enjoyed driving through the Canadian Rocky Mountains ️ to the National parks in Banff and Jasper, onwards to Whistler, and all the way to Tofino on Vancouver Island. Likewise, I’ve made road trips, both in my car and in rental cars, all over Europe, from the Azores Island to the Croatian Plitvice Lakes National Park . And recently, I got to enjoy the long and winding scenic seaside road Highway 1 in California, between San Francisco (what a lovely city) into to Los Angeles (what a crowded pump). ️
Once upon a time I owned a classic American car, an Oldsmobile Delta 88 Royal Brougham with a Buick V6 4.8 Liter engine, thanks for asking . I know my fellow European readers will drool, and my American readers will laugh at this car. In the USA it’s an “old ladies’” car and in Europe is a “classic American” car, but I digress.
So, I love driving a nice car and I love the experience of going places in style.
Should I own a car?
Having said all that, I am not convinced that people really need to own and drive a car all that often. And if you only rarely drive a car, then it’s probably a waste of money to own a car that’s mostly standing still anyway.
This is not just an economic sum, but more a lifestyle. The question “do I need a car” might depend on where you live and how long your commute to work is. I would always recommend getting a job near your house. That way, you don’t waste precious time and money on commuting.
I get that many American cities are simply built on the assumption that all people will have a car, but many older (European) cities will be more pedestrian and bike friendly. So, I’m referring here to the situation in many countries, big cities, and city-states nowadays:
Public transport is good and cheap.
Going anywhere on bike is fast, probably just as fast if not faster than by car.
Walking might be practical, enjoyable, and is in any case very cheap.
My personal situation is that I can walk to work in about an hour. It’s a boring road, however, and it would mean that I “waste” two hours a day on commuting. So instead, I go on bike, which costs me ± 35 minutes per workday. Yes, you read that correctly. My total commute, from house to work and back home, is only 35 minutes.
What I hope to make clear to you, dear reader, is that choosing a simple lifestyle with a simple job, opens new possibilities. You see, having a part-time job near your home means that you don’t waste much time on it. Instead, you can focus much more time on what makes you happy and thrive. Walking, for example, is very healthy for the mind and body, but hastily walking to work through a boring economic zone isn’t all that much fun.
What does a car cost?
Let us do some ✨math✨ to figure out what a car costs on a yearly basis. Only when we know all the costs can we quantify if it’s worth it.
I will necessarily use rough and round numbers, everybody’s home country and situation are different.
Let’s assume:
That you work close to home but still drive occasionally. You drive roughly 8000 kilometers or 5000 miles per year.
You don’t have children, and you are not disabled, so driving is a luxury and not a necessity. Therefore, the kind of car you would drive is not very relevant. Anything will do.
situation 1: Buying a small, efficient new car
I once bought a new car, almost the smallest Toyota existing, an Aygo.
It cost me €10.500 in early 2012. The same car now costs €15.000. I drove that car exactly 9 years and then sold it for €5.000. A side note on selling cars: be careful. Read this post, then come back here. Hello again, let’s continue. So, without counting insurance, taxes, fuel, or repairs and maintenance, what did it cost me? €10.500 - €5.000 = €5.500 in 9 years time. That is €611 per year or €51 per month.
Taxes, when the tax-free period expired, were roughly €28 per month.
Insurance began expensive but got gradually cheaper over time. Let’s say it was over these 9 years, roughly €35 per month as well.
All these costs, the depreciation, taxes, and insurance are a total of €114 per month, and we haven’t even moved yet.
Fuel consumption of this car is about 20 km/liter of fuel. And with a fuel price of on average €1.70 over the last 9 years, it would have cost me 8000/20×1.70 = €680 per year or, €57 per month.
Maintenance and repairs are another part of the budget we should not forget. After all, you just bought a new car, and you want to take good care of it, no? So, in the 9 years that I owned that car, I spent about €2.850 (actually more, but I also drove more kilometers, so I try to discount that). That is, 2850/9/12 = €27 per month on maintenance.
Now we know the total cost of a new, tiny and cheap car per month:
Price: €51
Taxes: €28
Insurance: €35
Fuel: €57
Maintenance: €27.
Total: €198 per month or €2.376 per year.
If you are wondering how I know what something cost more than a decade ago (I’ve sold this car two years ago), it’s because I logged every expense in a very neat app called “Road Trip.” I think it is worth the $7 that Darren asks for it.
situation 2: Buying a big gas guzzling used car
As I mentioned already, I sold my Aygo two years ago. But basically, I just swapped it for another car, a Toyota RAV4 this time.
It cost me €5000 in early 2021. I’ve been driving it for two and a half years now. So, if we divide the purchasing price by 30 months, it cost me €167 per month. Assuming that I will drive this car for 4 more years, that would be €65 per month. I know that is a big if. The car is old already, but on the other side, it’s a Toyota, so it will never really break down, just grow more boring to me until I want to get rid of it.
Taxes are now €52 per month because this car is bigger and heavier.
Insurance is cheaper because it’s an old car and I only insure it for damage to others. If I wreck it, then I’ll get €0 from the insurance company. It now costs €31 per month.
All these costs, the depreciation, taxes, and insurance are a total of €148 per month, and again, I haven’t even moved yet.
Fuel consumption of this car is about 10 km/liter of fuel. And with a fuel price of on average €1.90 over the previous 2 years and with 4 more to come, it will cost me 8000/10×1.90 = €1520 per year or, €126 per month.
Maintenance and repairs are a bit tricky on an old car. I spent another €2.500 after buying this old car because apparently the previous owners hadn’t made these expenses. I can’t project these costs forward because I’ve got no idea what will break down tomorrow. Let’s assume the next 4 years will be another conservative €250 a year. So, a total of 6,5 years of driving this car will have cost €3.500 or 3500/78 = €44 per month.
Now we know the total cost of an old, big and gas guzzling car per month:
Price: €65
Taxes: €52
Insurance: €31
Fuel: €126
Maintenance: €44.
Total: €318 per month or €3.816 per year.
Now what?
Seeing that a car costs anywhere between €200-€315 per month means that if I didn’t drive this car, I could work a few days per month less.
But is that really so? A car is more than a stupid status symbol. For me, it’s also a way to get places. Will I lose the will and, don’t pardon me this pun, the drive, to go places and do stuff?
Transportation that is further away than what’s reasonably doable by foot or on bike will always cost you some money (I’ve bought a bike 9 years ago for €50 and had zero costs since). Taking the bus or metro in a city will most likely be quite cheap, taking the train or plane to go further will be pricier.
So, being honest to ourselves and admitting that anything bigger than a Toyota Aygo, a Kia Picanto or a Suzuki Alto is a luxury, is our first step to financial nirvana. How much does that luxury costs? Well, in the ✨math✨ that we just did, we saw that 315-200 = €115 per month.
€115 per month, for driving a 4×4 big car that fits almost my entire ego inside. That’s not such a bad deal, is it?
June 10, 2023 car driving freedom how to choose budgeting 1914 1971
How to have fun on your own, on a budget? Books.
A pitfall for many is thinking that living on less money means automatically, having less fun. This, off course, is bullocks.
What gives a human being the most pleasure? Sure, pretty beached with palm trees and white sand can be very beautiful, but it’s my firm conviction that the best things in life are almost free.
One of the very cheap things that I like to do is read and listen to audio books. Here are some tips for you on how to fill many hours in a pleasurable way, on a budget.
Books I’ve read (and enjoyed) lately.
This book review is a bit different from my previous ones. You see, I signed up for a paid account at Audible, a service with a gigantic catalog of audiobooks.
So, instead of trying to read a book while lying in bed, waiting for that dreaded moment that I will blissfully doze off and nanoseconds later wake up with a painful nose because my Kindle (2019 model) landed on my face, I now just lie in bed, waiting for sleep to come and take me, while I… while away, listening to the soothing voice of the likes of Michael Lewis or John Lee.
About Audible
When I signed up for Audible, I didn’t fully understand how the subscription plan works. I assumed that as soon as I subscribed, I would have unlimited access to all audiobooks. This is not the case.
Basically, every month, a subscriber receives 1 credit. All the books I’ve looked at until now have wildly varying prices, but all cost 1 credit each in Audible. Which I like because having to consider the exact price would defer me from listening to a book, or it would make me think “more expensive = better”, which is a silly thought.
So, every month I receive 1 credit that I can spend to buy one audiobook. Even if I cancel my subscription, the book stays on my shelve in the Audible app. That is, for now, of course, until Jeff Bezos chances his mind.
But as an active subscriber, I also have unlimited access to other books in the “Plus Catalog.”
And so, it happened that the very first book that I listed to didn’t cost me one credit at all.
As always, I try not to give any spoilers while still giving you a feel for the story.
April: Playing to Win by Michael Lewis.
Also Narrated by Michael Lewis, which is good because he has a pleasant voice. This little Also narrated by Michael Lewis, which is good because he has a pleasant voice. This little booklet describes how he (used) to travel all over the USA, almost every weekend, to accompany one of his daughters on training sessions and matches of women’s softball.
He realizes that although very few of these girls, his daughters, and the daughters of thousands of other families, make it into semi- or professional softball, the true money is made by the teams and various leagues that organize these matches. The youth sports industrial complex is a multi-billion dollar market and countless parents are sucked and suckered into it, thinking they are doing their kids a favor.
A little sad to think about, isn’t it? Moreover, this is just softball, but I’ve been told there are other sports out there that people throw money into as well.
- $12.07 / £ 12.07 Recommend 3.5/5, it could have been more understandable for the uninitiated if more jargon had been explain.
April: Pushing ice by Alastair Reynolds
This sci-fi book takes place some decades into the future. This means that human technology is more advanced but very recognizable. Long story short: the crew of the Rockhopper under captain Bella Lind are capturing ice-comets to push them into earth orbit. If you ask me, that is a very uneconomical way to get clean water to earth, but whatever.
At some point, the crew is asked to fly to Janus, one of the moons of Saturn, because this moon by has started to move away from Saturn. Not only is it moving away, it’s speeding up, which is a clear indication that it is not a moon at all but a very ancient spaceship covered in a layer of ice.
The book mostly focuses on the crew, how to deal with living so isolated, away from humanity. And what do you do if you have an opportunity to get wealthy but also have a very slim chance of reaching earth and spending your hard-earned money? Give it to your family? Ignore the fortune you made? Get mad?
I noticed that some people were a bit ‘salty’ about this book, maybe because it focuses more on humans and less on big alien spaceships than Reynold’s usual readers had hoped? I liked this book and would recommend it.
- $16.99 / £2.82 / € 6.49. Recommend 3.5/5. If the storyline had focussed a bit more on the alien contacts and a little less on the interpersonal troubles, I would havel liked it even more.
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What is Independently Poor?
Words have power.
You might have heard that someone, maybe a bit smugly, mentioned that he is “independently wealthy” or “independently rich.”
This is a way of saying said person doesn’t need a job to earn money, they have enough money to live off. Possibly from an inheritance, a past job, or winning the lottery.
Being independently poor is my philosophy that you can live almost as free and wild and spirited and worry-free, but without having the big stash of money tucked away somewhere.
I call this ✨independently poor✨
An anti-FIRE manifest
You might have heard from FIRE. It stands for Financially Independent, Retired Early. It’s a snobbish way of saying you started working at Google or Microsoft as a highly-sought-after (read: overpaid) programmer.
And it’s a way of saying you raked in at least $100.000 per year while living rent-free in your parents basement without a social life (read: without big spendings) and without anything in life worth spending money on.
The Independently Poor lifestyle is quite different, and more attainable to normal people from all walks of life.
To explain how one can live a full life on modest means I’ve decided to keep this blog and share my tips and tricks with you, dear sweet reader.
We will have a blast!