How many people here live frugally?

Mommyg8

Sun, Dec 30 2018, 11:09 pm

ectomorph wrote:

Re buy vs lease. If you lease you're always driving a new car. And after 3 years you paid 48% off the value. No way that's cheaper than buying a used car.

That said I understand that owning a car can be stressful for someone who struggles w budgeting. It seems more predictable and less risky.

When we were researching our options a few years ago we were told by those who know that it might be cheaper to lease than to buy. We ultimately decided to buy a used car but as I mentioned earlier, that was more of an emotional decision than a financial one.

I just did some googling and it seems as if that person who advised us was right. The ultimate difference in price between leasing and buying is really not clear cut, and for some it may be cheaper to lease. This is why: Leasing prices take into consideration the car's value when the lease is up, and they build this information into the lease price. So since they know that they can get a guaranteed amount by selling the car when the lease is up, they are not taking too much of a risk by leasing you a relatively new car. When you buy (and finance) you are essentially taking much more of a risk. The risk is that the car will not last as long as you think it will, and/or that the cost of repairs towards the end of the car's lifespan will be higher than estimated. Risk always costs more.

For someone who is in a precarious financial situation, this is a no brainer - leasing always wins. Your monthly payments are lower. The cost of maintenance is covered by the lease. And there is less risk.

What the articles do not mention, though, is that there is a third option. Leasing a relatively new car is cheaper than financing a relatively new car, but buying - and financing - an older car can be cheaper both in the short run and the long run. There is an element of risk, because you are buying the car, but the monthlies are usually lower than leasing a relatively new car.

The downside of buying an older used car, and this is a real and serious downside, is the risk of frequent repairs needed. It's not only the money, it's the time wasted at the car mechanic, time taken off from work (and money lost), and the risk that the car will break down during an important trip (or in the middle of the night, as happened to me when my older car broke down at 11:30 at night in northern New Jersey) causing loss of time, money, and definite agmas nefesh. If you only use the car to drive back and forth to the grocery you can risk it, but driving to work or anything else that is important may not be worth the risk.

My dh drives a car that he paid $400 for. But he drives it only sporadically and very locally. If he would need to drive it any more, this option would not be feasible for him at all.

So, basically, it does seem that for most, leasing is a better choice. And especially if you are poor, the monthly payments are lower, the car is more reliable, and the maintenance is covered in the leasing agreement. Which makes it a win-win for many.

amother

Maroon

Sun, Dec 30 2018, 11:17 pm

Mommyg8 wrote:

Financially, leasing a car means cheaper monthly payments than financing a new car. However, monthly payments financing a used car are almost always lower. Leasing is definitely the most convenient option, but for someone who is trying make a budget conscious decision, convenience is generally not something that it going to factor in as strongly. Even with repairs, your payout over 5 years is lower with a financed used car than any other option. Then you sell it if you want, and make some money back toward the next car. A car that's 8 years old doesn't break down if it's maintained normally. A car that's 15 years probably will, but there's no reason to push it that long. A car of any age can get a flat tire or blow a tire and leave you stranded.

Mommyg8

Sun, Dec 30 2018, 11:30 pm

amother wrote:

It depends how old, and it depends how used. Since you are paying for the full value of the car as opposed to the value of only the time you are using the car, your monthlies may be higher. And you may not be left with anything at all by the time you finish paying - that's a risk you are taking.

A car that's eight years old doesn't break down... are you willing to stand behind that statement? My last car lasted about 10 years, and my mechanic said that that was basically on par for the course.

A flat tire is not the same as a transmission going, or brakes going Smile

. Your car has a donut that you can drive to safety. I blew out my last car's transmission because I was stranded, like I said, in Northern New Jersey and I drove the car home anyway.

Also, why do you think that convenience doesn't factor into a budget conscious decision? Lost time from work often translates into loss of income, and that is the last thing that a poor person can afford. Or if you are driving with a bunch of little kids in the car, breaking down is the last thing you want to be doing, anywhere.

amother

Orchid

Mon, Dec 31 2018, 12:05 am

Thanks all for the responses here( even if some are sarcastic). It's hard being a two income family working really hard but unfortunately we both don't have high paying careers but do well for what we do. Trying to live frugally is the only way to do it when you don't get help from the government or family. The small things we do that some people may think is crazy or ridiculous is really the only way we make it . My kids are not cold in the winter Bec they learn to dress warm there's nothing wrong with putting on a hoodie instead of short sleeves.I teach them the value of each dollar and they get it without being " cheap" we have done vacations on points and find ways to do fun things with them. They are happy shoe shopping in stores the shoes are not $80 they don't even know to ask for that. My child hopes to be a smart shopper like me when they are older. But I am always looking for small ways to save. all the little things add up and help in the long run.

southernbubby

Mon, Dec 31 2018, 3:22 am

Mommyg8 wrote:

I drive a 2001 Lexus with 160,000 miles on it and it was a demo with 8000 miles on it when we bought it.

amother

Aubergine

Mon, Dec 31 2018, 4:34 am

I spend way too much money. I am not good at budgeting.

Mostly, I spend too much on food. Not really so much meat and chicken (although we do eat that 2 or 3 times a week plus shabbos) but fresh fruit and veggies, snacks, etc.

But things I do that are frugal:

I almost never take taxis. I also walk a lot instead of taking our car, which cuts down on gas (and gym!) bills.
We buy second hand books or use the library
We are not into designer clothing. We do buy mostly new clothing but from very inexpensive shops. And we try and pass on from kid to kid, and if a friend offers me suitable clothing, I will take it.
I rarely get take out or eat out (except when travelling)
Most of my food is made from scratch. I don't buy a lot of ready made pizza, etc. (partly this is due to living out of town)
We buy a lot of second hand stuff eg bikes, furniture.
We do travel a lot to see our family who all live in different cities. Our parents live quite close but siblings live quite long distances. So we might go for family simchos. Not all, since bh there are so many but I just went to a wedding recently.
Since we are out of town most of our money goes on tuition. Our kids need to board as well as regular tuition and we fly them home as often as we can. They are not too far away so tickets rarely cost more then a couple of hundred $ but taxis etc all add up.

I live in Europe and I don't know anyone who leases a car. Our car is a 10 year old toyota and rarely needs work but I guess we are lucky in that neither of us needs to commute each day, so if there is an issue, we are not stuck.

mandr

Mon, Dec 31 2018, 8:35 am

amother wrote:

That’s not called being frugal. It’s common sense to wear a hoodie in the winter and silly to wear short sleeves. In the winter you wear winter attire. I still would not feel right having my children be chilly unless they’re wearing hoodies because I want to save a few dollars on heat.

dankbar

Mon, Dec 31 2018, 8:49 am

Ectomorph.
I'm not understanding. You are contradicting yourself. Your husband put together a car from scratch- then you go on to say you don't own a car.

You say you use your cooked up water that you used for cooking to bathe then you say you don't have water. You use the water from public bathrooms.
I hope you are not taking water out of toilet bowl to cook.

If you don't have water, do you have outhouse or every time one of your 12 kids needs the bathroom they are running out to a public bathroom on the other end of town.

Every time someone is hot in summer all of you are running into a store to cool off. Do you not think that the store next to you minds that 12 kids are running into their store for no reason just t run around & mess up their stuff, every day. Are they allowing that?

Even a restaurant only allows usage of their facilities if you are customer that buts food there. Some even charge you.

Not getting it!

Israeli_C

Mon, Dec 31 2018, 10:27 am

I wouldn't have considered myself different or 'frugal' if it wasn't for this thread. Most of the stuff I read here I thought "well, of course!" but then again I'm not American and never became accustomed to a materialistic lifestyle to begin with. Some basic points off the top of my head;
- I am a SAHM (which is currently a money saver, since I've 4 kids aged 3 years old and less). The newborn twins I mind by myself, the 1.5 year old is in daycare til 1.30pm and my 3 year old is in a regular chabad gan, which is free.
- No cleaners, babysitters or any other kinds of domestic help.
- We eat 'cheaply' - no takeout, hardly anything store bought. Only fruit and veg in season. No dairy products or processed foods. Meat, fish, wine and soft drinks are for shabbat only.
- Almost all of my kids' clothes and toys are second hand or gifts.
- We bulk buy staples in large supermarkets like Osher Ad. We order meat from Of Anash. Our food bill would be a lot lower if were less makpid on kashrut, but you gotta do what you gotta do.
- My husband cycles 10 mins to work (on a second hand bike) and I take buses.
- I wash and style my own sheitel. I also cut my husband's hair. I only buy cheap drugstore cosmetics and use them sparingly.
- Entertainment for everyone is mainly books, probably one of our biggest expenditures because local libraries don't have appropriate reading material.
- No trips abroad (if family want to see me, they can visit Israel!) and rarely have trips within Israel (only about once a year to Jerusalem or up north in a zimmer or on a religious moshav)
- All of our furniture is second hand or free, ditto for baby gear. I always rent a pump and crib from Yad Sarah after giving birth. I also only breastfeed and have never bought formula. It has saved me a tonne of money.
Our only major purchase was the apartment we're living in now, and we have a hefty mortgage (although it's still cheaper than when we were renting).

ectomorph

Mon, Dec 31 2018, 10:38 am

amother wrote:

We are BH wealthy but live very frugally. (I.e. my neighbor's O&R bill is always around $400+ mine is never above $250 in the same size house). We do not leave lights on, use candles, keep the heat low, barely use a/c in the summer, we have 4 kids and I've only purchased 5 new pieces of clothing for them, buy everything second hand and have a pretty cheap car lease. That being said, I do have a live in housekeeper and a nanny 9:00-3:00 because without that we would not be able to work. I haven't bought myself more than 3 items in the last year, etc. and I have a budget which I don't exceed.

Several things disturb me about this:

you have a live in housekeeper and a nanny but never buy your kids new clothing? How do your kids feel about that??

Candles cost more money then using electricity. It takes a lot of candles to make usable light.

I hope you at least save the wax and melt it into new candles.