Increased Expenses

By | February 10, 2018

It was inevitable.  The low expensive lifestyle that I’ve enjoyed is coming to an end.  It now seems very apparent that my expenses will significantly increase this summer.  It’s not entirely surprising, but it is what it is.  Let’s take a closer look at my increased expenses in just a few months.

Housing Expenses

Well, we all have to live somewhere.  Unfortunately, I’ll be moving to an expensive city where the cost of living is much higher than what it is now.  Of course, I still have to worry about my mortgage, but, as long as that stays rented, the house will mostly pay for itself.

In an effort to keep costs low, I plan on doing what I’ve always done.  That is, I plan on having roommates.  All I need is a bed and for the room to be close to work.  I’m really hoping that I can get something for under $1000 per month.  If that happens, I should be able to come out ahead.  But, I’m really not sure.

What’s even more pertinent is that I’m going to toy with the idea of buying a house in this expensive market.  It may not happen.  But ideally, I would buy a duplex, triplex or fourplex although those are few and far between.  But, whether I rent or buy a house, my housing expenses will definitely increase.

To Lease Or Buy A Car

My transportation expenses are also increasing.  Right now, I have a scooter that I paid $500 for.  I also have a motorcycle that I will have access to once I make the summer move.  However, I’m going to need a car.  The only thing I need to decide is whether I want to lease a car or buy new/used.

The general guidance is that you should not lease a car.  After all, paying that monthly car payment for three years straight and have nothing to show for it at the end doesn’t sound appealing.  But, life is more complicated than that.  The monthly payment on a lease would likely be less than if I bought a new vehicle and I can upgrade the vehicle everything three years.

But buying is a appealing as well.  I could buy new or used, try to pay off the car and then have no car payment for several years.  It’s unrealistic for me to try and purchase the vehicle with cash.  I might have been able to do that if I wasn’t paying off my student loans early. But I’ve already committed to paying off my student loans and nothing is going to change that.  Quite frankly, having this dilemma is exactly the reason I want to get rid of my student loans.  No more will debt get in the way of my future plans.

Granted, they say that one of the first things you should do when getting out of debt is to stop acquiring more debt.  Were I to buy a car, I would likely be borrowing money to do so.  In any case, it’s a temporary solution because as soon as I pay off the student loans, I’m sure I would divert that $2000 per month towards paying off the car.

I just haven’t decided if I’m going to buy used or new, although I will likely buy used.  And then, if so, hopefully no more than 10k total, which should be fine since I have the motorcycle as a back up.  It’s a good thing I’m not fancy, but I do need a reliable (and respectable) car for work.

Increased Income

I am not unmindful that I will also have a pay raise in the summer to accommodate for the increased expenses.  Only time will tell if I can make it out ahead.  If I live with roommates, which I’m used to doing, and buy a cheap but reliable used vehicle, I’m confident I can come out ahead.  I might even be able to increase my minimum contributions to my divided portfolio.  Although I can’t see the future, I can nonetheless plan for its eventuality.


My life is going to dramatically change in the summer.  Part of me is looking forward to it. But part of me is not.  After all, I will have a significant increase in responsibility at my job, which is a very stressful position.  I expect to be stressed out for the foreseeable future.  Hopefully it all works out.  But, regardless of the stressful nature of the job, I want to have my financial house in order.  As the saying goes, life is what happens when you make plans.

What do you think? Would you lease a car, or buy a used or new car?  What about my plans to keep housing costs low?  Any ideas?  Let me know your thoughts by commenting below.


14 thoughts on “Increased Expenses

  1. Tom @ Dividends Diversify

    DP, I would recommend buying a used car. It is usually the most economical choice. I wouldn’t buy real estate unless you know you are settled and will own for at least 5 years. The closing costs and associated costs with home ownership can eat you up. As I have gotten to know you through our blogs, I’m very curious about all of the changes in your life. I’m sure your other readers will be interest to if you choose to share it. Tom
    Tom @ Dividends Diversify recently posted…My Only Regret In Life: Speed To A MillionMy Profile

    1. Dividend Portfolio Post author

      Oh, most of the life changes are just associated with work. I’m still single, unmarried with no kids. in terms of the used car, I’m sort of leaning towards that option, but honestly, leasing is appealing. I didn’t mention this, but I had leased in the past and I swore up and down I would never lease again. It’s kind of funny that I’m seriously giving it some thought. But, I think leasing is a distant third. As for real estate, if I followed that advice, I would never buy anything and that’s inconsistent with my long term plans. If I stay with this job long enough, my goal is to retire from my job and then all I do with my time is manage the property managers who will manage my real estate portfolio. I do plan on owning for at least 5 years, but not necessarily settle (as in live in the house) for that long.

    1. Dividend Portfolio Post author

      I do hope to come out on top and I definitely have a long term view on things. Everyday I come home from work and think about retirement or finance or the like. So, the last thing I want to do is foolishly spend my money today at the cost of a respectable retirement later. I did that way too much in my twenties and most of my thirties. Never again.

  2. Steveark

    Sell the scooter and motorcycle and buy a $4,000 beater car. Nobody needs a “respectable” car for work unless they are being paid a car allowance. If not it is none of their business what you drive. You need to live at a very basic level until you get out of debt. Leasing or buying a new car with student loan debt is very unwise. Leasing is of course far worse than purchasing. Cars last at least 15 years now, leased cars only last 3 years. No brainer.

    1. Dividend Portfolio Post author

      Fair point Steveark. I will be selling the scooter prior to the move, but unwilling to sell the motorcycle. Regarding a respectable car, I care what kind of car I drive, and I disagree that I need to live at a very basic level until I get out of debt. I do agree that if I did that, I will be able to get out of debt faster, but I am willing to take a longer time getting out of debt by upping my standard of living. I know that I have to be careful with lifestyle inflation, but I’m hoping to get to retirement without necessarily have to do LEAN FIRE so to speak.

      Good point about leasing a car. I’m leaning against it, but I haven’t ruled it out. There are other reasons why I might choose to lease a car as opposed to buying one, but I don’t wish to make those known for now. I do think that leasing a car can be the right decision in certain circumstances and I just have to figure out if it’s right for me.

      Thanks for the comment Steveark.

      1. Steveark

        Yeah, I said that advice in the spirit of talking to a younger me, not to you but I didn’t make that clear. The right choice for you is all about your values, not mine. I was way more a car guy when I was younger and bought new cars, now they aren’t as much my thing and I buy used cars but I have a new fishing boat because I had so much trouble with my several used ones over the years. You sound like a smart guy and are weighing cost versus value, and depending on what the value represents to you sometimes it makes complete sense to go first class!

        1. Dividend Portfolio Post author

          Appreciate it Steveark. So, there was a time when I only bought used cars. But then I had a streak of bad luck. When my used car broke down, I bought another one. Then that broke down, and I bought another one, all in a relatively short period. It got to the point where I could either buy another used car and hope that it wouldn’t break down, or lease a car, which was more reliable. I chose to lease a car. This was my younger self.

          Leasing made sense at the time, but I was never 100% comfortable with that decision. What’s more is that I felt like I was stuck in the lease for nearly two lease cycles or about 6 years. I finally was able to get rid of the lease about a year and a half ago. I haven’t had a car since and it’s nice not having a car payment. I’m a bit older and wiser now and very conscientious about money and spending. The last thing I want to do is tie up a lot of money on a depreciating asset such as a vehicle. I do have my standards, but I’m all about saving as much money as I can. At the same time, I don’t want to go through a similar experience as I did with used cars in the past. The one thing I’ll mention is that during those times, I was purchasing used cars by finding them on Craigslist. Now, I’ll go to a much more reputable dealer like Car Max if I decided to buy used.

          The advice you gave was not a bad one and I appreciated it. But, like any advice, I have to tailor it to my specific situation. Until I actually make the decision, I will definitely be weighing the costs versus the value and will try to make the best decision I can. I’ll be sure to let the community know what I decide.

          Always appreciate the comment Steveark.

  3. Dividend Diplomats

    DP –

    Going to keep this brief, and I know you can do it and here goes nothing. Devise that plan to MAKE SURE you come out ahead. You can do this. I believe you in DP.


  4. Mr. Robot

    The people above have made some excellent financial remarks. I would like to put more focus on your future stressful job. Please take your mental wellbeing very serious and put this on priority 1. On the road to FIRE there are a lot of things we think about which 9-5 people don’t worry about. Combine that with a new role in which you have to perform and be accountable and that could lead to a lot of stress.

    Please take good physical en mental care of yourself. You are not your job and you are not your savings rate. Keep things in perspective and enjoy the ride.

    You can do it, no doubts here!
    Mr. Robot recently posted…This is my buy for February 2018My Profile

    1. Dividend Portfolio Post author

      Great point Mr. Robot and I’ve taken it to heart. The new position will be a stressful one, but it’s nothing I haven’t done before – just a little bit more challenging. Plus, I’ve been there done that with stressful positions, so even that gives me some experience for the future. I also know that the people I’ll be working for are great, as I’ve worked for them before, but no one can predict the future. If I do well in this next position, I’ll likely be well on my way to RE in 15 years. If not, then I might as well look for another job, but so be it. It might be stressful, but I believe I have the proper mindset in terms of what to expect and what I need to do to succeed. Fingers crossed.

  5. Dividend Seedling


    You have to make the best choice for you. The younger me spent 14k on a new Toyota Yaris hatchback in 2009. I got a great deal. A few thousand down. 199 a month for 60 months with 0 percent APR. Paid it off nice and slow and I still have the car today. If I had it to do over again I probably would have bought a used Corolla for the same price. I would reduce the temptation to spend on a car. I would definitely buy. I remember reading the average car on the road today is 11 years old. Unless you’re trying to impress people the car is the least important thing you can buy. Though if a family is in your future as in the next 10 years getting something four door could be important. Good luck whatever choice you make.

    1. Dividend Portfolio Post author

      Can’t really argue with any of that Seedling. It’s nice to have a paid for car. I’m also leaning towards buying used and I would only buy a 4-door car. I used to own two-door cars and wow are they annoying.


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