This is number one of a series of “How Do We Do It?” blogs. In these I will share actual, real life information that covers just about every aspect of our daily lives. It is an attempt to help those of you who browse the internet looking for information, as I did, only to find that what is out there is so far over your head that you need 12 college credits to understand the basics, or you end up going in circles without ever reaching the central truth. In some cases, such as this first category, I found a lot of theory but no one was ever really sharing actual, hard, realistic figures and when they went to balance their end of month I always wondered where they got the extra money that they spent. Here, I will show you the truth, period. Real numbers and facts. Shall we get started?
Okay, I am giving you the projected budget for November 2019 because that is when we will be hitting the road again. Right now we are busy working on our “Plus One” which I will cover in a future post. That means that we don’t have a realistic budget to share for the next two months. The funds for the “Plus One” build came directly from the sale of a house that we inherited so the budget for September and October will not do any good to follow.
I know there will be a lot of questions regarding the categories here and I hope I can answer some of them here. So, the first one is “If you pay for everything cash, why do you have a car payment.” Well, our last vehicle was a 2006 Toyota Tundra that we purchased outright in Florida, before our move to Tennessee. We literally wore that truck out because we used it for our retail business as well as personal. Even after putting over 130k miles on that old gal she was still going strong. We actually sold her to a very dear friend when we purchased our new car.
So, we had to decide what vehicle would be best suited to our needs and we had some specific requirements to meet. The first was our income and budget. We live well below the 138% standard figures used by the US government in determining poverty, as you can see by our monthly income. (For 2019 that figure would be $23,336 per year.) There are a number of factors which contribute to this but the long and short of it is that retirement before the age of 67 is difficult at best. Unless, of course, you have developed or inherited a financial dynasty. We didn’t. We are average, white collar workers who have both been in serious accidents which required we leave work at an earlier than planned age.
That aside, we also had to consider our health because getting into and out of a vehicle can be a challenge for me. Add to this the fact that we are looking at this being the final vehicle purchase for us, it would need to last the remainder of our driving years. Thus, the manufacturer had to be reliable and dependable. They needed a stellar reputation. We looked and looked and looked. About 6 months in all we spent comparing makes and models, going on so many test drives it made our heads spin. Reading so many reviews that I swear I almost went blind. Our brains were in definite overload.
Finally, we settled on the BMW x1 28i as the best we could find for our needs. We also found it aesthetically pleasing and comfortable for the long trips we knew we had ahead of us. Trips in the car, not the Skoolie. Now, we had a defined budget for a vehicle and it did not matter which make or model we looked at, across the board our budget just wasn’t sufficient for any auto that met our needs. Thus, we had to finance a small portion for a short term and, as much as we hated it, we were forced into the situation.
I will note, however, that we were able to add a couple of additional warranties to our purchase which will counterbalance the fact that we have to make a payment. For instance, we purchased a warranty that covers our tires for nearly every event you can imagine. These tires are low profile, run flat tires so to replace one would cost $300+/-. With the warranty our cost will be $0. On a recent trip to Tennessee we found out just how valuable that warranty is. Because of the pitiful condition of our nations interstate highways we had to replace 2 of those tires. That would have been out-of-pocket $600+ for the tires and an additional $420 for the tow. Our actual out-of-pocket was $0. If you take a second look at our budget, it isn’t hard to see that $1,020+ out of a months budget would have been devastating.
The second warranty we were able to obtain was one that covers the car itself, bumper to bumper, for an additional 3 years beyond the manufacturer’s extensive warranty. The actual car we ended up purchasing was a 2016 certified pre-owned vehicle so it still had 2 years on the original warranty. We now have 5 years on this car and it is awesome. Twice now we have had the car in for work that was strictly interior cosmetics. Both times the work was covered 100%. When they say bumper to bumper, honey they do mean it at BMW.
Now, I have to say, I loved our Tundra. That was the most dependable, comfortable, ecological truck we could have had at the time we purchased it. She served us well for the entire 8+ years that we had her. It was time for something more convenient though. This BMW is a better fit for the life we have now. We don’t like having a payment that eats up so much of our budget. It is a necessity with the ridiculous price of cars in the USA now, though. It is also the only payment we have and we intend to keep it that way.
Next time we will cover answers on the rest of our budget line items. Until then God Bless!
Can’t wait to see you out there on the Byways!