Comments on: Setting and Reaching Intermediate Term Personal Finance Goals

By: Cheeseburger

Cheeseburger — Thu, 03 May 2007 11:51:23 +0000

1five9,
I am starting with the “savings accounts for specific things route” and I agree that a seperate one for each goal would be a bit much. I have a few thoughts on this:
1) Set up, like Trent has done, a “big item” account. Then if you have multiple purchases in the future determine how much for each per week you need to set aside ($125 for car, $50 for stove, $80 for bathroom upgrade, etc…) and have that total amount automatically withdrawn each week (or another time period). To keep track of your progress, I suggest a simple spreadsheet with columns for each item.

2) Or you can make 3 seperate accounts, one for each of short, intermediate, and long term goals. If multiple items fall in each account then a spreadsheet could be useful too.

3) I haven’t used Microsoft Money yet (it is one if my short term goals) but dig a bit deeper to see if you can categorize things within accounts.

Hope those suggestions prove useful.

By: mike

mike — Thu, 03 May 2007 11:40:07 +0000

I love simple dollar and read it daily.

I don’t believe for one moment you are the type of guy to drop 30k cash on cars. To have that amount of money, disposable, opens up a world of investment opportunities you wouldn’t pass up.
My take on this (and I have had a modicum of financial success) would be to drive junk and put the 30k down on a duplex home that needs some work and would rent well, perhaps it could be triplexed with a few changes (a for instance).

Please, please don’t spend it on cars!

Mike

By: 1five9

1five9 — Thu, 03 May 2007 02:48:22 +0000

Trent, how do you track these goals? A savings account for each seems excessive and, maybe I am missing it, but I haven’t been able to make Quicken or Money handle these types of goals within 1 account. It’s just an issue that I’ve been struggling with, so I appreciate the time of your articles.

By: Trent

Trent — Wed, 02 May 2007 23:34:45 +0000

laura: Vincent is right, it’s a total cost of ownership issue. Buying the cheapest car is often not the cheapest option over the long run.

By: Vincent

Vincent — Wed, 02 May 2007 23:20:43 +0000

Laura,

Lexus had three sedans in the top seven most reliable sedans of 2006, according to CNN (based on predictions from Consumer Reports). Those cars are exceptionally reliable and of high quality and their reliability inherently cuts down on maintenance costs.

Most late cars you buy are expensive to maintain regardless of brand because so much is computer controlled–it’s not easy anymore to repair or maintain a car yourself beyond the occasional oil change or tune-up. If something goes wrong on a modern car, it’s usually pretty expensive. But from what I’ve read, Lexus has the fewest problems.

Lexus is a good choice. In fact, if I don’t get another older Volvo, Lexus is next in line!

By: laura k

laura k — Wed, 02 May 2007 21:24:45 +0000

Of course you can’t be sure when either of your cars will give out, but do you plan to replace both of them at (about) the same time? Wouldn’t it make more sense to stagger the purchases, if possible, so you’re not always trying to replace both at once?

Also, why a Lexus? (I don’t think you’ve discussed this before.) It seems it would be more expensive to maintain than, say, a Toyota Camry or equivalent Subaru. (Then again, I don’t have a car, so I also don’t have a clue!) I know you will do your homework re: safety, reliability, etc., but a Lexus seems counter to your unpretentious philosophy.

Finally, something that relates a little to this post: When I was buying my first brand new car, my parents balked at the fact that the cost was, as you noted, nearly as much as my yearly salary. When they bought their first new car, it cost less than 1/3 of their annual income.