Want to Save Money? Think Big! (Part 2 of 2)

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How to Save BIG MONEY

How to Save BIG MONEY

In part 1 of this series, we looked at ways to save big money by re-evaluating some of life’s biggest expenses – housing. Today, we’ll look at ideas to save big money on cars and education.

Cars: Buy Used, Drive Forever

That “new car smell” might be great, but in many ways, buying a new car is the worst financial decision you can make. The reason? A new car loses a huge percentage of its value the moment you drive it off the lot. A $35,000 new car might only sell for $15,000 two years later – that means you’ve lost $10,000 a year in the depreciation of the car’s value – in addition to your monthly payments.

Instead of buying a new car, you can save a bundle of money by buying used. This way, you’ve effectively allowed the car’s prior owner to take the loss that comes from the depreciation of the vehicle. Isn’t that worth missing out on the “new car smell?”

Just like you should consider buying one house and staying in it for the long-term, “thinking big” about savings also means you should stick with your car rather than constantly “trading up.” It’s usually cheaper to keep fixing an old (paid-for) clunker than it is to buy a new (or “new to you”) car.

If you want to buy a car, consider buying a certified pre-owned vehicle from a dealership. The sticker price might be higher than you would pay through a private party transaction, but these certified used cars come with warranties, ensuring that you won’t get stuck with big car repair bills anytime soon.

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Do you really need private school?

Many families make big sacrifices to send their kids to private school or a private college – whether it’s for religious reasons, or because they want their kids to have a certain kind of educational experience. Parents often want to give their kids the best, and education is a noble endeavor. The problem is, unless you have plenty of money in the bank, these private schools are hugely expensive; you could save thousands of dollars a year by sending your kids to the neighborhood public school, which you also are already paying for, via your tax dollars.

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Some parents object, saying that private schools are worth the cost because their kids get smaller class sizes, more stimulating classmates, or a better quality of curriculum. This may be true, but the ultimate measure of an investment is the results – the “end,” not the process. And research is inconclusive as to whether private schools actually create better outcomes than public schools.

Some studies suggest that graduates of elite private colleges earn more than public college alumni, but no one knows if this is “causation” (private colleges impart more wisdom or better skills) or “correlation” (the kinds of people who go to private colleges were already the kinds of people who were likely to earn more money).

If you want to send your kids to private schools or private colleges, make sure it’s for the right reasons. Every family needs to make the decision that’s right for them, but don’t bankrupt your family’s future because you’re expecting a private school to work wonders for your kids. Chances are, your kids’ character and self-motivation will be bigger determining factors in their success in life, rather than where they went to school.

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Whether you’re a state school graduate or a private school alum, Quizzle.com offers great tools and resources to help you manage your personal finances. With Quizzle’s financial tools, you can get out of debt once and for all, improve your credit, and create a more secure foundation to reach your financial goals.

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