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The Best Way To Pay For Your Next Vehicle

The Best Way to Pay for Your Next Vehicle

You took our advice and narrowed down your search for your next vehicle.  You’ve honed in on the perfect used car. Great job! Now you don’t have to worry about the depreciation problem we talked about in this post. But you’re not out of the woods yet. The dealer still has a few tricks up their sleeve too. You didn’t think you were gonna get away that easy, did you?


Let’s set up the scenario. The car you chose costs $20,000. The dealer comes back with what they claim is a more than generous offer of 4.5% APR over a 72 month term. The monthly payment is “only” $317. Now that’s a great deal! Or so they’ll ATTEMPT to lead you to believe. Little do they know, you’ve been honing your skills in The Money Dojo lately. Don’t sign that dotted line just yet.


While I’m sure most of us in the market for a new vehicle could afford that $317 monthly payment, we like to get the most out of every dollar we spend here in the Dojo. The fact of the matter is (tax, title, and license aside) if you finance your car under the parameters listed above, you will actually pay $22,858.60 by the time it’s paid in full. That’s over 14% more than the original $20,000 price tag.


There is only one way to combat this problem. Don’t finance. Pay Cash. It may seem scary to drop such a large amount of money at one time, but in my opinion, it beats the brakes off of paying an extra 14% for the exact same vehicle. Now, this route will require a little discipline. To pay cash for a $20,000 vehicle, it requires you to have $20,000. This is where a budget comes into play. Every month, you need to be paying yourself a car note. But, instead of overpaying a finance company or dealership for your current vehicle, you will now be saving up for your future vehicle. In fact, if you were paying yourself a car note for that 72 month period, instead of the dealership, you would only have to put away $278 a month! 


It’s really a simple concept; it just takes the dedication and discipline to set it into action. Obviously, this method of payment will take some planning, but it will save you thousands upon thousands of dollars in the long run. Ditch the “normal” approach of wasting your hard earned money on interest, and start doing things the Dojo Way today!

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The Most Important Tool in Finance

Most Important Tool in Finance

Millions and millions of Americans are living paycheck to paycheck, trying to make ends meet. Trust me, I realize that breaking that cycle can seem like a tall order. Whatever your monetary goals may be, there is one simple tool you can start using today that will help you finally take control of your financial destiny. The best thing about this tool is that it will cost you nothing, aside from a little time every month to set it up and track it. If you haven’t quite been picking up what I’ve been putting down up to this point, get ready to squirm (that is most people’s almost instinctual reaction to this subject, after all) I’m referring to a budget. I’m not talking about a vague idea of how much money you have, and how much you think you’ll need to survive this month. I’m talking about an honest to goodness budget; that you stick to, that you keep track of, and that you update when need be. Budgets take away the guesswork on how much money you THINK you have, and starts allowing you to make decisions based on the money you KNOW you have. Keep these steps in mind whenever building your budget:


  1. Do Your Research: Look at your bank statements from the past few months. Calculate how much you have been spending on things like food, fuel, rent, car notes, etc. Make note of how many of those purchases were things you needed vs things that you wanted at the time. You’ll have to make some short-term sacrifices to reap the long-term benefits.
  2. Be Realistic: Use the calculations you made on your previous few months’ spending habits and create a realistic budget that you believe you’ll be able to adhere to. If you have been spending $500 a month on food, don’t expect to slash your costs in half. It’s always better to give yourself a little bit more wiggle room and not spend everything, then to aim low and be disappointed right off the bat.
  3. Zero-sum game: When you receive your paycheck, you need to assign a destination for every last penny. You shouldn’t have any loose cash floating around. If you don’t spend all the money you expected to this month, you can always find a spot for it in next month’s budget. Also, it’s perfectly acceptable to create a small “miscellaneous expenses budget” each month, for any unforeseen purchases.
  4. Cater To Your Strengths: If you are technologically savvy and would like to build your budget into a spreadsheet, by all means do it. If you would rather pull out the old legal pad and a pencil, do it. If chisel and stone is more your thing, be my guest. Don’t let the relatively small task of tracking your spending turn into a big pain.
  5. Be Consistent: Set aside a time of day, everyday, to review that day’s spending. Update your budget with the new numbers. Even when you don’t feel like updating that day, make yourself do it. This lifestyle will become a lot easier if you can turn it into a habit instead of an imposition.


Once you begin to budget your money, you will discover that your bank account is no longer in charge, you are. Eventually, you’ll be able to not only budget for the things you need, but also a few things you want!

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Save your first $1,000

Save your first $1,000

Saving is one of the biggest hurdles anyone can face in their personal finance journey. Often times, it seems like you need every last cent in order to just scrape by. After all, 78% of Americans live paycheck to paycheck at certain points just to make ends meet. So how can you break this vicious cycle, and save your first $1,000? The answer is simpler than you might think.


My philosophy on saving is simple, but I’m not going to promise you it will be easy. In life, there are things you want, and then there are things you need. Food, fuel, and a roof over your head. These are things that we need. That 65” 4K television you saw at Best Buy last week? That is a want.


Track what you purchase for a month. Take a note of all the things that you could’ve lived without. For instance, that morning coffee stop. This is the key to getting the savings ball rolling. Instead of making those same “want” purchases next month, put that money away. Think of it as an investment in yourself.


As the saying goes, you eat an elephant one bite at a time. The same principle works for saving. Put away a little bit every month, and see how fast it starts to add up. Before you know it, you’ll look in your bank account and see $1,000 looking back at you!


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Improve your Financial Future Today… For Free!

Improve your Financial Future Today… For Free!

Just about all of us have one thing or another we would love to change or improve upon in our lives. After all, there is always something we can get better at regardless of our current circumstances. I’m assuming, given the fact that you found your way to this post, that you are looking to make some financial strides in the near future. Well, you’re in luck! There is something that every single person reading this post can do TODAY that will improve their current financial outlook. Now, there are as many different facets of personal finance as their are choices at Subway… but we’re not going to dwell on specifics (Always go with the Italian Herbs and Cheese… who am I kidding). So, right now, I’m going to ask you to imagine what part of your current financial situation you would like to change…

Once you have answered that question, give yourself a pat on the back, because you’ve just completed the most important step of this entire process: identifying your very own financial goal. Goal-setting is a fantastic financial tool for many reasons, but allow me to state the most obvious (as well as my personal favorite). IT’S FREE! It doesn’t cost us anything to identify a current weakness that we would like to improve upon. I don’t know about you, but that’s the kind of bang I like to get for my buck. That’s not all, here are a few tips you can use to further optimize the goal-setting process:

  • Write it down– Setting the goal itself is important, but studies show that you can really unleash the power of goal-setting by putting pen to paper and writing it down. Just the simple task of writing down your goals can make them up to 42% more attainable.
  • Make it mobile– Carry your goals around with you in your wallet. Maybe save them as the background on your phone. At the very least post them somewhere that you will see them several times a day.
  • Tell a friend– Don’t keep your goals a secret. Having a confidante will bring some much needed accountability into the situation. Think of them like a workout partner… but for your wallet.
  • Be real- Set a realistically attainable goal. When you start off in the goal-setting process, start small, and work your way up. A little bit of momentum will go a long way.
  • Set the time- Accompany your realistic goals with a realistic time frame. It’s fine to be ambitious, but make sure you’re not setting yourself up for failure before you even begin.

  • Break it down- Divide your big goal into smaller ones. These mini goals will not only serve as stepping stones on the path to the ultimate prize, but they will also allow you to win some small victories along the way to help bolster your confidence. Attaching dates to these smaller goals can also be very helpful.

We all have financial goals we can start working towards. Sometimes you just need a little kick in the pants… well lucky for you…. You entered the right dojo. Follow these simple steps, and make your financial goals your financial reality. Take control of your future, today!

Be sure to subscribe to our greenbelts newsletter so you get all of our insight here at The Money Dojo!