I’ve got to admit, I enjoyed this series, Trent. It was very well-done. My only complaint was that you completely avoided any mention of what many readers would consder to be your biggest mistake: Financing a brand-new status-symbol car, instead of paying cash for a practical used car.

You listed your “Ten Big Mistakes” as:

1) Student loans as lifestyle support
2) Career choice based solely on earnings
3) Lifestyle funded by credit cards
4) Blaming others for challenges
5) Worrying about what others think
6) Children have huge financial ramifications
7) Stuff without the time to enjoy it
8) Credit card as emergency fund
9) Bad influences
10) Poor goal setting

I think that since #3 and #8 are the same thing, you should have ditched one and included the Prius on the list.

But I’ll admit, you kept my attention and I read every article – which I suppose is really all that matters for a blogger, isn’t it. :)

@Kevin:

for Trent to include the Prius, he’d have to consider that purchase a mistake in the first place. And he doesn’t, no matter what some of the readers may think of it. ;) Either way, the Prius is paid off now.

I enjoyed the series too, and I think the Prius was far from a mistake. It’s not a status-symbol car, especially in the Midwest. It’s almost a counterculture vehicle in much of the U.S. It’s not the cheapest car out there, but it’s well made and economical (and fun) to drive, and certainly a higher value for the money than your average BMW/Mercedes/Audi/Lexus/Infiniti.

If Trent had, after writing on frugality, gone out and purchased a Porsche Cayenne instead of a Honda Pilot, or whatever it was, then I think the car criticism would be on point. But he didn’t.

Chacha, even if you don’t agree that the Prius is a status symbol car (and counter-culture status symbols are still status symbols), the point is they have plenty of USED Priuses out there he could have bought, and avoided the depreciation hit. That was just wasted money.

Also, he financed it and paid interest on a car loan. We know he paid the loan off early, but he still paid some amount of interest on the loan. That’s more wasted money.

Finally, he sacrificed a great deal of credibility. The whole situation smacked of “do as I say, not as I do.” After writing numerous posts advising readers to save money by paying cash for a practical used car, Trent went against his own advice. Then rather than admitting that he got caught up in the excitement of the Shiny New Thing, he first tried to justify the purchase, then buried the decision, refusing to even mention it since then. As if we’re so stupid that we’ll forget, or just let it slide.

Kevin, Trent said two things regarding the Prius purchase:

1. that he was earning more money in interest on a CD than he was wasting on the loan interest;

2. that, while he was doing his research, he found out that the price difference between an used Prius and a new one was negligible.

Look, I think cars are generally a big waste of money, and Trent’s posts during the Prius debacle smacked of justification. But I think those two points can’t be completely ignored.

Marta,

I can’t find the original post, but I don’t believe he was earning more interest in the CD than he was paying on the loan. I believe his justification was that he didn’t want to drain his emergency fund – meaning he didn’t have enough money set aside specifically for vehicle replacement, and he’d instead have to tap his emergency fund. He didn’t want to sacrifice that liquidity, so instead he financed the car.

It’s exactly the same as if he’d paid cash for the car, then borrowed $15,000 (or whatever) at 1.9% (or whatever) to be his emergency fund.

Also, I know he *claimed* the price difference was negligible, but I believe the market is efficient. Nobody’s going to pay $25,000 for a used Prius when new ones are $25,500. Instead, I believe he simply didn’t look very hard, because he wanted the new car. He dug up a bit of anecdotal data that supported his want, and leaned on that to justify his purchase.

Personally, I don’t care what Trent does with his own advice. I come for the advice, not to be a spectator on someone else’s life.

8sml:

Would you take diet advice from a fat person?

Would you take health advice from a smoker?

Would you take parenting advice from someone who doesn’t have kids?

Then why would you take finance advice from someone whose actions contradict their own advice?

@Kevin: Even if all of that’s true, so what? If he paid more than he had to, but he could afford it and it still left plenty of money for his other goals and things he values, how is that a mistake?

The only thing I take issue with here is how Trent sometimes doesn’t seem to realize that buying shiny new things for reasons other than having something shiny and new is something that other people do too, not just him.

Kevin:
Yes
Yes
and
Yes

moving on . . .

I really like the post. This, more than any other post in this series, hits home for me. I’m financially secure despite not making much, and I’m good with money. What I am bad with is goal setting (and I didn’t realize that until I read this post!). I have a lot of someday dreams. A few years ago, I put several things into motion, accomplished a few dreams, and was really happy (for example, I took an extra job to save up money for a New Zealand trip, and I sold a lot of things to buy a new laptop). Since then, I’ve let life/work/my relationship get in the way of making and achieving my *big* dreams.

My boyfriend gets back into town tomorrow. I think next week would be a great time for us to talk through both our future goals AND how to start acting on them.

@ Kevin-Trent had the money to pay off the car if he chose to, and he also had the money to pay the loan off early-I’d take his advice cause I know I’m not in a postion to make that kinda choice….

I agree with setting goals, I have a tendency to just got into a holding pattern in my life when I dont set goals.

Goals can be a double edged sword. If you set them (too high) and don’t hit them, you run the risk of getting side tracked and losing focus.

If you can stay focused on your long term goals, short term goals may not be a necessity

#13 David— Since the “something you can do today to move towards that goal.” If you are still making progress, you aren’t focused. If there’s not a way to make progress, you don’t have a good goal and need to revise.

Where I teach, use the SMART goals paradigm:

Specific
Measurable
Achievable
Realistic
Timely

It’s similar to what Trent is saying, but a little more detailed. I like it.

You know, I would take health advice from a fat person, etc. Here’s why:

Nobody’s perfect. We all make mistakes. I’d rather take advice from someone that’s tried several methods and can say how easy/hard they hard it is and know exactly what they should be doing to get out of that situation.

I’d much rather take health advice from someone who’s fat than someone who’s skinny and never had to think about their weight but preach “just start running” or “just watch what you eat” like it’s easy, or you’re too dumb to know that.

So, I wasn’t there for the prius debate but as long as Trent is not feeling guilty for it and has paid off the debt since, who cares? People make mistakes (or not, depending on who’s point of view it is).

You know, I’m sick and tired of hearing people find fault in others who are trying to do the right thing. My mother in law critized us for having a $100 a month emergency fund! Or for carpooling to the west coat to see my family cuz I haven’t seen them for over a year! (A trip that will cost less than $300, that is saved up for, and that is the very well deserved holidays of someone that works 12 hour days 7 days a week!)

If he was giving advice and not following ANY of it, then there’s a serious problem. If he’s following 90% of it, then he’s human, no?

sorry that was “my mother in law critized us for having a $100 a month ENTERTAINMENT fund!” for 2 people. I think that if it’s not there, that we’re never going to get out of debt cuz we’ll feel too deprived