Millionaire Challenge

lessonlearned

Buffy - Sorry to hear about the car - they can gobble up money can't they. Unfortunately we can't really do without them. At least you had reserves you could use and didn't have to take out further debt.

It's never to late to take a grip and improve you financial situation - even if that magic £1m is unachievable - just by taking control you will improve your financial health.

Just keep at it.

Buffythedebtslayer

lessonlearned wrote: »

Buffy - Sorry to hear about the car - they can gobble up money can't they. Unfortunately we can't really do without them. At least you had reserves you could use and didn't have to take out further debt.

It's never to late to take a grip and improve you financial situation - even if that magic £1m is unachievable - just by taking control you will improve your financial health.

Just keep at it.

thanks Lessonlearned


Have woken up with a stunning headache, the result I think of yesterday being a bit stressful. I loathe driving and I especially loathe driving on Saturday, plus spending money on something I don't like is a bit galling!


I have to work the plan.


xx

Karmacat

Oh Buffy! Sorry to hear you feel so bad about it all and I absolutely understand feeling gutted about using the savings - and the stress headache the next day Just get through, get through today, this next week, this month, it'll come around :kisses3: Its never, ever too late to change things - I'm working at changing stuff again, and I'd have been getting my Old Age Pension this year, under the old retirement system :eek:

LL - sorting out access could cost a mint, makes sense to walk away I was thinking of you the other day, looking at junk I'd recorded on the DVD recorder, "just in case I feel ill again" - so I deleted it all :D and it felt good.

I've been out the last couple of days testing my new camera for the website - I'm going to have to scan the instruction leaflet, annoyingly - can't read it and the online one just gets stuck, and won't download

I've also managed to start maintenance on the garden again - the aim is definitely to grow food this year, to offset food costs and give me some useful exercise instead of "empty" exercise, so to speak. And this house, now that I know I'm not staying here permanently - its a sweet house, but I'm not terribly affectionate towards it, and I don't like the surrounds - they're okay, I simply wouldn't choose them if all else were equal. Still, its a good house in a safe area in a town thats retained and even gained value - must just safeguard my investment in it now, so that when I move, its a help, not a drain.

usa1

Buffythedebtslayer. its so gutting spending money on cars, mine is being such a money-pit ATM.


Try and see it as `not dead money` as you need to travel about in a safe & reliable car.

lessonlearned

Cars…….

I don't know if the following will help anyone but I thought you might find it interesting. It's about how we have financed cars in the past.

DS1 needed to change his car this month.

His first car was a lease car. Having no money when he first graduated and got his first job and having a long commute which would have taken 4 hours a day by train he decided to lease his first car. The lease expires this week.

His original intention was to use savings to buy the lease car from the company at the end of the 3 year lease period.

About a year ago I funded an ISA for him - maximum amount. My intention was that he use this money for the renovation work on his house.

He asked me if he could use it to pay off his car and although I didn't think it very wise I didn't want to force the issue. It had to be his decision so I merely said "yes you can do that if you think it will work out best for you, however, be aware you will be using all your capital on a depreciating asset (i.e. liability). In addition you will then have to borrow the money to fund the renovations and interest on loans is not cheap.

He mulled it over and also sounded out some friends for advice.
They agreed with my suggestion to take out another lease, thus saving his capital to fund the renovations.

As they pointed out his car had done a very high mileage for its age - he had to commute a lot at one point. Also if he bought the car he would now be liable for MOT's repairs etc. In addition, because of the high mileage, in another couple of years the car would be worth little, whereas the money spent on his house is really an investment which would pay dividends in the long run.

So that is what he has done. His new lease package is fantastic and he reckons he will be saving over £200 a month, less fuel, cheaper running costs, no road tax to pay, full 3 year warranty so no repair bills, servicing and insurance included etc.

When OH and I ran our own businesses we decided not to purchase cars through the businesses because company cars are not as tax efficient as they used to be. Instead, after taking advice from our accountant, we decided to own them privately and charge mileage to our respective companies.

How it works is that you claim your business mileage as part of your legitimate business expenditure which your pay yourself out of your gross profits, it's not taxable.

In 2006-2007 the last year we had our businesses, the maximum allowance you could claim and offset against tax was £0-44p a mile. I don't know what the current figure is.

I already had a runabout that was sufficient for my needs so financing a car purchase was not an issue, however at one point OH needed to replace his car. He did a lot of driving and he also had to present a certain "image" to demonstrate his "worth" iyswim - he needed to inspire his clients with confidence, so driving an unreliable clapped out car was not appropriate.

So he decided to treat himself to a prestige car. There was no way I wanted to shell out over £20K for a car so we went the lease route. The mileage allowance that he put through his company more than paid for the monthly lease payments.

Whilst it is very nice to be able to own a car outright and we instinctively tend to think that "renting" a car is a waste of money it can sometimes be worth considering, especially if you can claim mileage costs through your business accounts.

gallygirl

LL, what sensible friends your son has :T.

The 44p a mile is still 44p :eek:. Must have been a nice little earner then but not so much now!

I've looked at lease cars but as my mileage is around 25,000 a year it's prohibitively expensive due to extra mileage costs . There are some great deals around though. I'll stick with my lovely little car that I've had from new, now 4 years old and will keep another 2 or 3 years till I naff off to Spain :cool:. I got such a good deal on it, it was cheaper than a 1 year old one and I need a reliable car due to mileage. Or I may look at the company scheme in 18m time and if there's a nice sporty job on it I may ask my boss if I can rejoin the company car scheme so I can have a red sports car at least once in my life :rotfl:.

lessonlearned

A red sports car sounds fab!!!

Yes I thought it was still £0-44p per mile but didn't like to quote because I wasn't sure. You're right not nearly as attractive as it was.

You are also right about keeping your car for now. If you do a very high mileage then leasing can be very expensive.

I talked about leasing because sometimes it can be your best bet in the short term. Of course in the longer term then buying and owning will probably work out cheaper.

My best deal ever was a lovely little Renault 5 - I bought it brand new on a 0% finance deal over 4 years because I couldn't afford to buy a decent second hand car.

Now we all know that buying from new can incur heavy depreciation costs but in my case the payments at 0% on a new car were less than the 12% they wanted on a second hand car.

In the event I kept my little car for 17 years because it was so reliable so depreciation was not an issue.;) I gave it to my sister in the end, however a few months later a co-op milk float ran into our little Renault and killed it. That car was a firm family friend and we missed it very much.

Although DS1 is not self employed and cannot take advantage of the mileage in his case we felt it better to retain his capital for other purposes. His new lease package is very good - as you say there are some fantastic deals at the moment.

OH needed a really good car to help sell his business and we really didn't want to commit to over £20K to purchase one so leasing was the best way for him, especially as the mileage allowance more than covered his lease payments.

DS2 currently drives a very old but so far reliable Golf. He doesn't have a high mileage and he could manage to get to work on public transport if necessary. He also has access to my car, so for him leasing would be an unnecessary expense.

My car is a wheelchair accessible vehicle which I need for OH but I don't really like it very much. However it's reliable and serves it's purpose. I would really like a convertible - at least once in my lifetime.:rotfl:

One day…...

Karmacat

Very interesting discussion about financing cars - its not an issue for me right now (though I want it to be!) but I'm taking notes

droopsnoot

On the whole "charging use of own car to business" thing, HMRC says that from 2011-2012 tax year on, you can charge 45p per mile for a car or van for the first 10000 miles per annum, after that it's 25p per mile. Makes a difference if you intend to do a lot of miles. You can charge more, of course, but you have to declare the excess as income.

Source: http://www.hmrc.gov.uk/rates/travel.htm

Karmacat

I've finally embedded the Amazon store! I think I have to have a celebratory cup of coffee.

Just had a cold call from the French bank where I have my cheque account, and heard a few bits of good news:

- they'll start up a savings account for me, to store my money in until its needed for payments - only 1.25% per annum, but at least it partly offsets inflation, and I often have quite a lot of money over there, to make the best use of the fees that I get charged for sending money over.

- they no longer charge for whats called a "virement" in France - which is simply making an online payment. I used to have to scan a letter (signed in felt tip pen so they could see the signature!) and then they'd charge me 3 euros for the privilege!

- they've now taken my chequebook ordering off from "automatic" - last time I still had 20 or so cheques left, and since I get charged for secure postage, its a real waste of money. It still has to be sent securely, of course, since its an international thing, but at least it'll only be when I order it, and that will be much less frequent if I can do the virements - sending a cheque used to be cheaper than a virement, it was crazy. It'll take me the rest of the mortgage to use up this cheque book now