Is debt really ‘Tricky”?

A recent blog post I was reading at SmartMoney.com called auto debt “tricky”.

Saying that financial planners agree that you shouldn’t borrow money to buy things that go down in value, BUT…it just can’t be avoided.  After all who can afford to pay cash for a new car?

Yes new cars are expensive.  And you don’t need a new car.  A good used car will do just fine and they don’t depreciate like new cars.

Here is my advice as a personal finance coach: Pay cash for your car.  Even if it means driving a POS for awhile. My wife and I bought a Toyota Camry with about 100,000 miles on it for $6,000.

Better yet, if available, use a car sharing service like Zipcar so that you don’t have to pay for car insurance and maintenance. When you need to go on a long road trip rent a car. Put the miles on the rental car.

Some day when you are financially independent you can buy the new car of your dreams.  Till them, be like the Millionaire Next Door and drive a used car.

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