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Recently, I’ve talked about my first investment, which turned out to be a great investment. Then I talked about my worst investment decision. Today, I am going to talk about my dumbest money move ever.
Everything I write about here on Money Smart Guides is to help you be smarter with your money. I’ve made a ton of money mistakes in my life, getting into a mountain of credit card debt was just one. Today I want to talk about another dumb money mistake I made: not buying a bike rack.
You may be thinking, “how is not buying a bike rack a dumb money mistake”? Well, instead of buying a bike rack, I bought a second car.
Biking and Driving
I love to mountain bike. Most summers, by best friend from college and I head up to his parents house in New York and spend a weekend mountain biking though the Adirondacks. It’s always an awesome time. Since I am on the tall side, I have a large mountain bike. This wasn’t an issue until I bought my Subaru WRX. My bike couldn’t fit into the trunk (even with the front wheel removed). It wouldn’t even fit in the back seat without some modification – removing the front wheel and the handlebars!
I didn’t like having to do this work all of the time, so my brother-in-law told me to get a bike rack. I quickly shot that idea down. To understand why, you have to understand me. I love cars and this car was my baby. I didn’t want a scratch on it. I feared that the bike rack would scratch the car or leave marks. Then there was the possibility of the bike scratching the car too. I just couldn’t deal with it. I needed another solution.
Buying A Second Car
My solution was to buy a second car. I ended up buying a 2001 VW Golf with over 140,000 for $5,000. I justified this (somehow) by saying that this would be my daily driver. I would keep miles off my Subaru, which I wanted to keep long-term and as a result of not driving it as much, my insurance would drop. Plus, the Golf got better gas mileage.
Of course, when one does the math, it still shows that buying another car was a dumb financial move. As I drove the car, it needed repairs. The water pump went. Then the turbo started leaking oil. Then the transmission started to slip. All told, I think I put another $1,500 into the car during the 4 years I owned it.
It got to a point where the transmission was going to go at any minute. With it being in such bad shape, I knew I wasn’t going to get much for it selling it privately, so I traded it in when I bought my new car. The following summer, I was able to sell the Subaru as well.
Now I have one car and my mountain bike fits into it and I only have to remove the front wheel.
I learned a lot about this experience. At the time, I wasn’t thinking long-term. I only wanted a solution for my bike and for whatever reason, I was fixated on the answer being a new car. My brother-in-law tried talking me out of it many times, but it simply went in one ear, and out the other.
Had I been looking at the situation more long-term, I would have realized that buying a new car made zero financial sense. But again, I was too caught up in the moment.
I am curious to try to figure out what could have changed my mind. I talk about waiting a few days or weeks before buying something to see if you truly want it. That didn’t work for me in this case. I was too focused on another car being the solution.
Readers, what tips or tricks can you offer that might work in a situation when simply delaying a purchase doesn’t work?
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.