Not a success story, but a hopefully submitted success snippet; after all, can't the wholly successful folks buy a Wii themselves?
I'm young still to have a personal finance "success story," but I can share a small component of what's getting me back on track so far. One that, for me, virtually eliminates what for most Americans is 7.0% of consumer expenditures annually, according to the BLS. It's not only a big (and rising) piece of the purchasing pie, it's getting easier by the day to eliminate as a cost. It's the car.
It's true that, in many parts of the US, it's difficult to live without a car. The reality of the built environment of the 2000s grew up around the car, and almost every daily activity is speeded by the use of an auto whether or not one lives a suburban lifestyle. And kids? I don't have them, and I'd never claim cars don't make it easier. But, more and more, it's possible to have one's cake and eat it too.
By not having a car, I save an average of $3,544 on the iron horse itself, $2,013 on gas, and $2,339 on other expenses including maintenance and insurance for a total of $7,896 (BLS 2005 figures, US average consumer unit figures). Let's figure that someone drives seven days per week, two trips per day. That works out to a total cost of almost $11 per trip. Seems high, no? Don't forget that it would be much, much higher if that person hadn't already paid, in tax dollars, for the cost of roads and bridges and other infrastructure. Experts widely agree that the failure of consumers to observe, on a regular and continuing basis, the true cost of driving is the fact that fixed costs (purchase price, and even annual costs such as insurance) represent such a large portion of the cost of a car. If one works it out, it seems awfully steep. But, what about the argument that one "needs" a car in this age?
I "need" a car too. I needed it for Ikea, which I couldn't possibly get to without one. I needed it for moving, when we got all of our worldly belongings from Philadelphia to Boston in a single van. I'll need it when we get a dog and need to take it to the vet. For those occasions, I'll just whip out my ZipCard and hop in a car at the pod nearest to my apartment, about a block down. That's a closer spot than I can find circling around in my neighborhood! There are also rental cars and taxis, if one lives in the areas that still don't have such a program.
Carsharing is something that even those with much different situations can consider. For about $10/hour or $60/day, would-be drivers can get access to a car -- and that price includes gas, insurance, and a fair chunk of mileage. Carsharing has been a huge success for families looking at a two-car situation -- particularly if it's only needed occasionally. It's now found in cities across the US, and in some places, hundreds of cars are speckled across the city in convenient, transit-friendly locations.
Not owning a car cuts down my housing+transportation total by about a third. Not only is it a huge cost reduction for me, it eliminates a huge portion of my personal risk: I needn't worry about the dropping coverage I get from medical insurance or, god forbid, the potential every driver has to cause gross harm to another. Think about that, and try it as an exercise: housing and transportation go hand in hand. Is a family able to afford more house in the suburbs, or would you be able to get the same in town if you could give up the car?
Have you paid off your debt? Managed to save for your dream home? Had an awesome investment pan out? Share your personal finance success stories here.
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