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.
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.
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.