Cars. Most of us need them to get around. When you think about it, the only thing a car does is get us from Point A to Point B. A car is basically four wheels and an engine. If the only thing a car does is get from from place to place, why are they so expensive? Why is it that vehicles expenses are usually the second largest expense in our budget? If cars are only meant for basic transportation, how is it that they have become such a status symbol?

Unfortunately, I got caught up in the car buying frenzy. It seemed like for a period of about 10-12 years, I was buying a new car every two years or so. Even though I had a car that was in perfect working order, I always had to have the newest model with the latest and greatest features.

In my senior year in one of my college business courses, I'll never forget the words of my college professor. Our professor told us that he'd taught us the essentials of business from the book but he also wanted to give us some real world advice. His tip was simply, “Don't buy the car”. He knew that once we got out of college and landed our first real job, the first thing we would want to do is go buy a flashy car. He provided us with detailed calculations of how much money we would throw away by buying a new car and how much money we would potentially end up with if we took the money we were paying each month to the finance company and invested that money in a good mutual fund.

He shared that he had been driving the same car for over 15 years. He knew the car looked bad and he could afford to buy a new car but he chose not to. The car still ran good but it was so old, you could see the ground from inside the car.

As a young 22 year old, I failed to listen to my professors advice. I'd just made a huge accomplishment (getting a college degree) and I was going to celebrate and reward myself. I had a car that was paid for; but it didn't look good. I was getting ready to move to the big city of Atlanta and my old Chevrolet Lumina was not the car for a young college graduate. I “needed” to have a new car. I went to the car dealership and with the help of my grandfather, I drove out in a nice new Nissan Altima.

What cars have I owned in the past?

• 1st car – Nissan Stanza. This car was given to me when I was 16 by my grandfather. I think he paid about $500 for it. I kept this car for about 2 months until the engine blew. The cost to repair the car was much more than it was worth.
• 2nd car – Chevy Cavalier. This car was given to me by my Mom. When she got another car, she gave this one to me. I kept this car for a couple of years until it was totaled in an accident.
• 3rd car – Chevy Lumina. I bought this car after I was in an accident with the Cavalier. I was on a 2 lane road attempting to make a left turn. The car behind me decided to pass me on the left as I was making my left turn and t-boned the Cavalier knocking me into the ditch. My Cavalier was a total loss and with the proceeds from the insurance settlement, I bought the Chevy Lumina. I used the insurance settlement for the down payment and took out a loan. I kept this car for a couple of years and paid off the loan.
• 4th car – Nissan Altima. This was my first new car. As mentioned earlier, I leased it shortly after college. My monthly lease payment was about $290. I gave the paid-off Chevy Lumina to a family member.
• 5th car – Nissan Altima. This one was newer than my other Altima and I wanted to upgrade. I rolled in the negative equity from the first Altima and my monthly payment went up to $345.
• 6th car – Jeep Grand Cherokee. One of my friends had one of these so I wanted one too. I traded in the Nissan Altima and rolled in the negative equity into the new Jeep Loan. My monthly payment went up to $422.
• 7th car – Dodge Durango. – My cousin worked at a Dodge/Chrysler dealership. I went in to say hey to her and ended up driving out in a new Durango. I'd had a pretty major accident with the Jeep and I kept having problems with it so this helped influence my decision to get rid of it. I rolled in the negative equity from the Jeep and my payment jumped to $555.

Thankfully, I had a financial awakening and enough in savings to get rid of this car loan. It was the best feeling ever. I was no longer writing out a large check to the finance company each month and I had $555 to send to my savings account.

It's been over 2 years since I paid off that loan and I can't believe I kept buying new cars and putting myself further in debt with each purchase. I don't want another car loan. My next vehicle will be paid for in cash.

How many cars have you owned? Do you currently have a car loan?

If you are about to purchase your first home, there are several things you need to do. It does not matter if the home is brand new and has never been lived in; get the inspection anyway.

The first and most important thing you need to do is get pre-approved for a mortgage, unless you are fortunate enough to be paying in cash. By getting pre-approved for a mortgage BEFORE you start shopping for a home, you will know how much home you can afford and avoid wasting time looking at homes that are beyond your price range. There is nothing worse than finding the home you like, then applying for the mortgage only to be told you can't afford the house.

The second is to find your perfect home. One piece of advice I can offer here is to look at as many homes as you need to to ensure you get the home that is perfect for you. You are probably making one of the largest purchases of your life so you want to get it right. If you don't like your home after you purchase it, you can't take it back and ask for a refund.

One you find that perfect home, the third and perhaps, the second most important thing to do behind getting a mortgage pre-approval is to get a home inspection. This is one expense in the homebuying process that you do not want to overlook.

A home inspection can help identify those problems that may be hiding deep behind the walls of your potential home. As a buyer, you may be too busy checking out how many bedrooms the home has, how many bathrooms the home has or how large a lot the home is. You may even be too busy thinking about the neighborhood or the school district. You probably aren't looking at the little cracks in the wall or know that there is an electrical issue that could cause your home to burn down.

Spending a few hundred dollars on a home inspection can save you from making a multi-thousand dollar mistake. A home inspection recently saved my over $50,000. I was going to purchase an additional investment property a few weeks ago. Had I not chosen to have a home inspection done before I finalized the purchase, I would have purchased a home with major structural problems.

What are some of the items covered by a home inspection?

Structural: A good inspector will check the foundation of the home to make sure everything is good with the foundation and no major repairs are needed.

Electrical: The home inspector should test of all the electrical outlets to make sure they are properly grounded. He should also check the electrical box and make sure there are no issues there.

Plumbing: The inspector will turn on the faucets and flush the toilets to make sure there are no leaks. He will also check the dishwasher, stove, fridge and garbage disposal to make sure all is working properly. The home inspector can usually estimate the age of the appliance and recommend the remaining useful life.

Roof: A good inspector will get up on the roof of a single family home to check the status of the roofing materials. If your inspector refuses to get on the roof, you may want to find another inspector.

Exterior: The home inspector will check the grading around the home and check the HVAC of the
home.

One the home inspector has completed his assessment of the home, he will provide you with a copy of the report listing all of the things he's found that were issues or could be potential issues. You should received the report as soon as possible since time is of the essence. Once you get the report and review it, you then have to decide which of those items need to be replaced and those that are getting close to the end of their useful life.