Mary,
Allow me to suggest the unthinkable here. You're paying $328 a month for car payments, $175 a month for car insurance = $503 per month. Then you spend about $100+ a month on gas, and these days gas prices are going nowhere but up. So now, at $600+ a month, you're looking at over $7,200 a year. In 10 years that adds up to $72,000+.
I don't know what your annual income situation is, but you are probably paying around 25% in personal income taxes as an Ontario taxpayer. The money you are paying for transportation is being paid with "after tax" dollars, which means the you have to earn at least $9,600 a year to pay for your $7,200 in transportation costs. In 10 years that's $96,000 in earnings to pay for the $72,000. No wonder you can't win! It's because you are playing the game of "Lose". The system is calculated and legislated that way. Time to rebel, and quit being victimized!
The system is not going to change because there are too many vested interests at stake.
So you and I have some choices to make. Remain a victim of the system, or else do something about it to change your lot in life. It's all about choices
WHAT IF YOU:
1) Sold your car and used the sale proceeds to pay off your car loan. You most likely would even have some money left over.
2) At that point, you no longer would have insurance payments or gas expenses.
3) Now, what to do with that extra $7,200 a year.
4) Suppose you set yourself a goal, say for a period of 10 years out of your life. During this time, you going to deliberately make some sacrifices for the good of the longer term goal. That goal is to earn and save a little "nest egg". (You want to be able to control your own financial destiny, instead of always coming from behind, and the only light you see at the end of the tunnel seems to be a freight train.)
5) Ask yourself, "What alternatives are there with regards to my transportaition needs?" Can I take the bus (or subway if you are in the Metro-Toronto area)? If I am close to work, is it practical enough to walk? If so, think about the health benefits? If not,what else can I do? What about using a bicycle? Out here in the Vancouver Lower Mainland, there are/have been a number of women who go to and from work on Razor Scooters. Some of them actually had little motors installed on the back, so they could putt-putt down the sidewalk, coasting along with little or no effort. None of this is subject to car insurance. In terms of emergencies along the way, take a cab. Yes, it costs money, so you can't do that all the time. But you do this in only the most serious situations. Monthly bus passes would likely cost you in the neighborhood of $100 a month or so. Finally, in terms of lifestyle, when you really want to get away, you can always do a Car Rental for a weekend here and there. You can do this for under $200 on a weekend. The thing about your own car is that car insurance ticks along 24 hours a day, seven days a week, whether you're using the car or not. The car payments aren't going to quit any time soon. In fact, by the time you pay off the car, you are already thinking about trading in your car for a better, newer model, and back you go on the financial treadmill.
So now, if you can rearrange your affairs, keeping in mind your long-term gains for short-term sacrifices, can you not see that you could get your transportation budget down to say $200 a month for bus, taxis and occasional car rentals? This then would free up a good $400 a month, which is about $5,000 a year. Wow! Now if you invested that $5,000 a year, collecting interest on that money, compounded monthly, at the end of 10 years you could have saved $50,000, and probably have earned another $50,000 return on your investment = $100,000. There would be some taxes payable on the $50,000 Interest Income, say at 25% or $12,500, but that still leaves $37,500 after tax dollars, together with your $50,000 invested capital = $87,500 tax paid dollars.
Now who's the victim? Not you anymore! You are ahead of the game, instead of behind. Now you are in a better position to set yourself up with a car, which you can afford to buy outright for cash. By the way, cash buyers can save thousands in discounts on purchases. Cash is KING. Afterwards, you would have no car loan payments to worry about, which again, puts you ahead of the game. And ten years from now, alternative fuel cars will be a big factor in the marketplace- electric cars, hydrogen fuel, and some other alternatives on the horizon, etc.
So there you go, Mary. Think about it!
Incidentally, I do not own a car, by design. I take the bus and use sky train (equivalent to subway) and it works just fine. Sure, I miss a car sometimes, but I know I can make do without it. I just think about all the money I have saved, and I realize it is all worth it.
Good luck! Nahh! Luck has nothing to do with it. Planning and decisions have everything to do with it.
Rod P.
