The last bit of my former, pre-parenthood life will be driving away today. With a second child on the way my husband and I are taking the plunge into minivan territory. Ugh! We’ve both cringed at the thought of a minivan ever since we were able to drive, vowing never to be “those” parents.
Unfortunately, the little sporty hatchback, good enough for one child, won’t fit the bill for two. Hubby’s a bit too tall with the car seats taking up the bulk of the room in the back. So to make everyone happy, including our egos we elected to replace my way-too-expensive, luxury single girl car with a cross-over instead.
And here’s where my money lessons begin. Beware parents or even single gals; if you’re thinking of having a child in the future, or have one and plan to have another, think through very carefully how much you want to spend on your vehicle. In just three short years you could go from no kids to two children, a loving spouse, plus a dog.
In no particular order, money lessons I learned buying a car for my family:
- Think through big purchases like a car. First of all, cars depreciate in value, a lot, which means the minute you drive off the lot it loses value. My old car I spent over $37,000 on just three years ago is worth only $13,000. Consider buying a used vehicle that’s in good shape instead. You may need to do more homework up front but the financial payoff could be worth it for you and your soon-to-be large family. In the end we decided to get a vehicle that had enough space to fit our growing family as opposed to the high end SUV that may have looked terrific but would have created undue financial stress.
- Every little bit counts. It’s easy to get lured into getting a bunch of fancy features in a new vehicle. But remember – every little bit counts. What you save on resisting that sun roof you can spend on other more important things, like an RESP for your kids. I’m big on making sure all the lights are off in the house, or having a timer on my thermostat to keep electricity and heating costs down; the same principles should apply when purchasing a vehicle.
- Spend only what you have. I got my first credit card when I went to university, back when I could still hear my mom saying “credit card money isn’t money that you have.” She always stressed the importance of paying off your credit card balance each and every month. Admittedly, it was hard for me to do that in my 20s when I was making only $20,000 a year. I was young – wanted to travel the world, go out to the latest and greatest restaurant that just opened up in town with my friends, buy all the newest fashions and live on my own. So I spent money I didn’t have. The lesson finally kicked in when I got married and had a child and realized that my debt was no longer my own. Since then we’ve decided to put the credit cards away and concentrate on paying the money owed, including the debt leftover from the fancy single girl car with all the bells and whistles. I still kick myself for all the spending I did back then and now have a new mantra: if we can’t afford it with the money we have right now, then we don’t get it.
- Save! I opened my first personal savings account when I was still in grade school. My school had a drawing contest sponsored by the local credit union; the winner would receive $50 to put into a bank account. I didn’t pull any money out of that account until I was 17! Since then I’ve always put money aside, even if it’s a little bit at a time. You never know when you or your family could hit hard times.
- Talk about money with your spouse, out loud and in front of your kids. Money shouldn’t be a taboo subject around the house. You’d be amazed at how much your child will learn from it. My husband and I openly discuss our finances; because of that we rarely argue about money and even our toddler knows to buy things you need (like a bigger car or a new toy) you have to have money in your piggy bank.
Edyta McKay is a working mom with two amazing kids; Jack who is 4.5, emphasis on half and Kaia who isn’t even two, yet insists on doing everything her older brother does. She lives in the big city of Toronto, Ontario with her very energetic family spending her days working as the Corporate Communications Manager for CST and a full time blogger for Parentwise. She’s dished out parenting advice on CTV and Global News where Jack has made some appearances as her side-kick.