As you can imagine, we are very careful about spending money. We clip coupons from the Sunday paper, buy necessities in bulk when they are on sale, brown bag our lunches, find ways to save on recurring expenses and avoid a daily latte habit. Sounds great, right? But then, I go out and buy a van that sat in our driveway most of the year.
The story begins last year. We already had a more-than-a-decade-old Honda Accord that I used to commute and my wife used to take the bus to work. When our twins were born, I bought a van (pre-owned, gently used, at a fair price) to ferry around the babies and their visiting grand parents. My wife was on parental leave for most of the past year and thinking back, we rarely used the van (mainly for visits to the paediatrician, we could have just as easily used the car). I can think of only a handful of times, when we actually needed the van.
I bring this up because I saw an ad for the same model van with similar mileage selling for $7,000 less than our purchase price in the local paper. Add in the insurance and oil changes, I figure that we had spent roughly $8,000 on a van parked in our driveway most of the year. In hindsight, I should have rented a van for the few times we really needed it and purchased one a year later, just before my wife went back to work.
Many personal finance books advise you to cut the small expenses to get ahead financially. While the little expenses left unchecked slowly drip away your savings, the big ones like automobiles and homes tend to drain it in an instant.