Your financial role model?

Did you ever have a financial role model growing up? I did not. I had “learn-from-my-mistakes” role models, in that I decided I never wanted to live in the way that I grew up and made a voracious effort to work my ass off and live frugally in order for that to never happen. Some days Chris asks me if I am still on that road and if I will ever slow down and realize I can chill a bit.

It is an interesting conversation (well maybe to me). Who impacted how you view money? Did you ever have a financial role model? Did you grow up watching Suze Orman on TV telling you when you might be DENIED? Were you given everything, and never taught that money does not grow on trees, and that there are consequences to racking up a crazy amount of credit card debt in the tune of never freeing yourself from the monthly payments? Or, did you learn how to know about your net worth, an emergency fund, and the importance of your credit score? Additionally, that your credit score can also be a causing factor in getting a job or not?

Money and finances are a reoccurring blog topic for me. Somehow over time money and sex seem to be taboo topics. No one really wants to talk about either. And, yet “Fifty Shades of Grey” became a mainstream movie (not without some backlash) what will be the movie about money that potentially starts the conversation amongst us? Somehow I think that movie will not be of much interest to the masses. Yet, how do we actually shift the world to start taking care of itself?

This recent Daily Worth article shares one woman’s experience and what she learned from her dad, or…like me what she learned not to do. Her dad is now retired and has to live on a fixed income. The potential for many who do not plan accordingly for the future, save, and approach retirement in a way that allows you to really “retire.” Chris and I look at today and what we save as a way to prepare for our future. For a time when we hope to have been savvy enough to find a point in time when we can make the choice for ourselves rather than be forced to work past relevancy. That way we can pamper our family and truly enjoy life.

We all have to start somewhere, but somehow I think many just never start. Or maybe it starts with who our financial role models are and what they teach us about today, tomorrow, and the future.

A 7 Year Car Loan?

I saw this recent article about how having a car loan for 7 years. I like the poll at the end of the article: “Would you pay $1,600 more over a seven-year period to get a 50% lower monthly payment now?” The chart shows that for a 3 year loan you would pay $588 a month, and for a 7 year loan it would be $271 a month. The seven-year loan means that you are only paying an additional $1600 in interest. I am never one to pay interest if I do not have to, but it is nice to know that you could have a more affordable payment for a longer term.

The question that they bring up at the end, which I think is also worth thinking about, is if you wanted to sell your car in 5 years, and had a 7 year loan, then likely you will owe more than the car is worth. That is definitely something to think about and research. I like that it is possible in their more financial tight times. Having said that, I like it with one caveat. If the car you are purchasing is to ritzy and expensive that you have to go for the 7 year loan. To me then it is not worth it. If you are stretching yourself for the visibility of a luxury car, then you should buy a less expensive car.

I guess it depends on how you choose to spend your money, your interest rate, how long you drive your car (in years), how long you drive your car each day, and your thoughts on putting your income into your car. Suze Orman would tell you to get rid of the car payment completely. She would likely say if you are making less on the money you are putting away (separate from 401ks, 403bs, and IRAs) than you are paying for a car loan, then pay off your car loan. If you can make more on the money you invest than the car loan interest rate, then keep your car loan. Look to where you make more for your money.

What do you think?