When I started this blog, I was trying to get out of my rut of living in auto-pilot. I wanted to be more aware of, not only my finances, but my life in general. I wanted to live with intention.
I definitely feel like I have made strides in the right direction over the last year and a half, but when I was reading a recent post on the Frugalwoods blog about their recent car purchases, I was reminded of the time I bought my car… with a car loan… and then just left it on auto-pilot…
Ru-Ru is my first car. I bought her a few months after I moved out of my parents’ place and in to my first condo, and I’ve had her ever since. For the first couple months of living in my new condo, my work had a spare truck that they let me use while the normal driver went back to school for a few months to finish up.
So, of course, the moment the he got back from school, I was all of a sudden without the vehicle I had become accustomed to using… Which meant it was time to go buy one.
That Saturday I went to the Subaru dealership and test drove a single car and bought her on the spot with help from my bank. In other words, I got a car loan.
All my major savings had been used up with my condo purchase a few months before, so if I wanted that little Subaru hatchback, I needed a loan. And yes, it all happened that fast. Very little research went in to it. I had always wanted a Subaru, and so I went and bought one.
At least I bought a used one…
As for my loan, I don’t remember what the rate was, but I know I didn’t shop around for a better one. I took the first loan that came to me… I set up my monthly automatic payment and began driving my car. I’m sure I could look back through some records and find out the specific details, but we’ll just go with my rough memories… I think the loan period was 5 years.
Probably about a year in to it I went to the bank for another reason… not sure what the reason was… I don’t often actually physically go to the bank… especially not during regular business hours when you talk to an actual person, not just the ATM. (…and yes, sometimes I do actually talk to the ATM…)
Anyway, the nice young man at the teller was looking through my accounts and then asked me, “do you want to pay off your car loan? You have more than enough cash sitting in your chequing account and it would save you a bunch of interest.”
That’s right folks, apparently my auto-pilot lifestyle had been costing me months of interest because instead of attacking that car loan, I was letting my money accumulate in my chequing account… And it wasn’t even like I was holding that money in an account that would at least generate interest itself… Nope, I was sitting there with cash doing absolutely nothing in my chequing account.
So, I told the teller to go ahead and pay off the loan. Yay! No more car loan and unnecessary interest payments!
At that point, you would have hoped that I would have woken up to the fact that I wasn’t managing my finances in a way that was most efficient or smart. (To be completely honest, I just wasn’t managing my finances. Period.) But no… That was probably about 7 or 8 years ago now… Lifestyle inflation and a lot of spendy years are between the me of back then and the current me…
There is no point dwelling on the past, but remembering it all does make me chuckle. I know the error of my ways now and am attempting to make up for lost time.
Do you have a similar story of some financial “auto-pilot” tendencies that have ended up costing you? I want to hear it!