That’s it. That’s the secret. Budgeting works.

Through the magic of budgeting you can achieve some pretty amazing financial goals… like paying off about $90 thousand of student loans over an intense, focused three year period. However, we all know that life is a fluid adventure and sometimes the tides change. And when the tides change, sometimes financial goals are forced to change along with them. And thus we have the meat of today’s entry…

I bought a brand new car yesterday!

Actually, I didn’t buy a brand new “car” yesterday; I bought a brand new SUV. It was a 2012 Ford Escape Limited Edition, to be exact. And although the picture above isn’t exactly the Escape that I bought, it is the closest thing that I can find online to the model and color of the Escape that I purchased. In fact, my new SUV looks very similar to the one in that picture.

And yes, there is a larger, longer story about why I needed to buy a new car. I won’t go into the details of that decision right now, but I definitely will tell you the story in an upcoming entry on the blog… so stay tuned!

Purchasing this Escape a pretty big event for me for three reasons. First, it’s the first brand new car that I’ve ever purchased. Second, it dramatically alters my strict budget. And third, there is a new level of certainty in what used to be a very expensive part of my financial life. Before I woke up this morning, I woke up every other morning of the 13+ years that I’ve been driving and had a bit of an apprehension about the car I was driving. Sure, that apprehension was much less pronounced when I lived at home with my parents and right after I purchased my 1999 Chevrolet Blazer, but for the majority of the time that I’ve been driving I’ve been driving a beat up old car that just made it between trips to the service station.

If you’ve never been in that type of position with your primary method of transportation, then take it from me – it sucks. There’s nothing that makes a driver of a beat up car’s stomach sink faster than driving along and hearing a weird noise out of nowhere. Whenever that happened to me, I didn’t get frustrated with the machine (because that’s just crazy), but I did get annoyed because I saw money just flying out the proverbial window.

But along with my new car, I made sure to get a 5 year/100,000 mile extended warranty that covers pretty much anything that could go wrong in the car. It also provides an incredible amount of “other” stuff that comes in handy like free towing, free roadside assistance, free gas fill-ups if you run out of gas, free rental cars when the Escape is being worked on, and so on and so on. I know most people say to stay away from these types of warranties, but I’ve had my cars breakdown too many times and been left between a rock and a hard place that I knew purchasing this extended coverage was the right thing to do.

Oh, and last week I became a member of AAA at the “Plus” membership level. I think I’m about as covered as I can be!

Like the picture above, this one is not a direct image of the inside of my Escape. Instead, it’s a standard picture of the interior of an Escape Limited Edition that I found online. This is pretty much what the inside of my SUV looks like – including the nice touchscreen display in the center. There are a lot of buttons and functions on that touchscreen – I have to sit down to figure them all out. One thing that I know for sure is that there are a lot more functions available with this Escape than are available with the Ford Fusion. And that’s not a knock on the Fusion, but when I sat down in both machines – I knew that I wanted the Escape.

And that was an odd realization, too. You see, when I was negotiating to buy a new car yesterday, I was negotiating with the salesman to buy a brand new Fusion. It wasn’t quite the color that I wanted and it wasn’t quite the model that I wanted, but the price was reasonable (just north of $20 thousand). However, as I sat there waiting for the salesman to come back from the owner of the dealership I realized that I was negotiating for the wrong car! So when the salesman came back I told him to forget about the Fusion and get me a price for the Escape.

After owning the car for about 24 hours, I’m glad I made that game time decision. It was absolutely the right thing to do.

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The reason that I wrote this entry, though, was to let my readers know that this purchase alters my student loan repayment plans. By sticking to an aggressive repayment plan, I hoped to have my student loans fully repaid by December 2012. However, now that I have this machine to pay for, that timetable changes. I owe a little bit less on the truck than I still owe on my student loans so it is an easier debt for me to get my mind around and conquer. Once I receive the final financing papers, set up my online payment account through the finance company, and make my first payment I’ll have a better idea of how much I have left to repay on the car. Suffice to say, it’ll be slightly over $25 thousand for sure.

I have no intention of stopping my student loan repayments (which I could do because of how much I’ve overpaid to date). Instead, I intend to readjust my budget and pay off both the student loan and the car in a reasonable, quick, efficient fashion. A good budget is able to change with the tide.

Again, I won’t go into the gory details of how I was left with no choice but to buy a new car. That brief story will be released on the blog in an upcoming entry. However, I’m glad that I purchased the car that I wanted and didn’t just “settle” for any car on the lot.

Smashed down to $49 thousand

For example, let’s say that for some reason one of my roommates has to move out. That would bump my portion of the rent an additional $300 per month or $3,600 per year. Well, before I begin to send thousands of dollars down to Washington, DC to repay my student loan debt, I want to be sure that I’m in a position to be able to pay for any increased costs that may come my way. A more likely example of an increased expense is having to purchase a new car. As I wrote about on here a few years ago, my Chevy Blazer died in August 2008. Since then, I’ve been driving my Mom’s old Honda Civic. I’ve managed to run up the mileage on the Civic to about 140,000. And while I understand that Civics are built to last a long time, 140,000 miles is still a lot of mileage for a car. In the event that I need to buy a new car, I want to be sure that I can put a substantial down payment on the purchase instead of just a few thousand bucks.

So I’ve been spending a lot of time and effort bolstering my cash reserves. Thus far (and without going into any detail), it’s been a pretty successful enterprise. The end result of this success is my being able to slowly shift my focus from building up the reserves to decimating the remaining student loan debt… and that’s what I’m beginning to do.

Stick around at JerseySmarts.com because I’m going to start kicking the balance of this student loan’s ass really soon!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. After completely repaying over $61 thousand in student loans (not counting interest) from the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank, I currently owe $49 thousand to the United States Department of Education’s Direct Loans program. Follow my student loan repayment story on JerseySmarts.com.

As if this wasn’t bad enough, last night’s deep freeze has rendered those snow covered roads to be ice covered. Great…

When you put all of this together with the fact that I’m now driving a Honda Civic instead of a Chevrolet Blazer, you can see why I’m more restrained about making the hour long trek across New Jersey from Tinton Falls to Trenton. Ain’t happening today.

And let’s be real – I definitely do not get paid enough to put my safety on the line to get to an office where my work is more “appreciated” than valued. Seriously. If I had a dollar for every time someone said thank you or that they appreciated my work, I’d double my salary! I don’t want to start down that path right now, though…

So I’ll be working from home again today while the folks in this development try to dislodge their heads from their asses and figure out how to make the main road drivable!

It was a very pleasant experience and the Kars 4 Kids people were very nice to speak with on the phone. If anyone has a car or a truck that they are looking to get rid of, then they should consider donating it to a charity like Kars 4 Kids. Not only do you get a tax deduction, but I also got a three-day, two-night stay at a hotel of my choice. Pretty sweet, huh? I’ll be putting that to good use this summer when I go down to Nashville.

Kars 4 Kids seems to be an organization that provides “for the physical, emotional, and spiritual needs of distressed and at-risk Jewish youth.” There’s a whole page of stuff that this organization does to help young people. I admit that I had no idea that Kars 4 Kids was a front for this organization when I made the donation, but it doesn’t matter. As long as someone who is less privileged is getting some type of benefit from my old truck, then all is well!

This indicates that if the Big Three go bust it is their bosses, insular and stuck in their ways, who should be held most responsible. Put simply, for too long they had built bad cars, which were inefficient, unreliable and unattractive and Americans did not want to buy them.

The man makes a point. Everyone knows that foreign cars are much more fuel efficient, definitely more reliable, and usually more stylish than their American counterparts. Let’s put it this way, Ford didn’t earn the nickname of “Found On Road Dead” out of nowhere.

A few years ago (2002) I purchased a 1999 Chevy Blazer. The price was around $15,000 – give or take a few hundred bucks. First of all, the price was way too high for a three year old automobile. Second, since I purchased this machine, I’ve probably put an additional $15,000 into it in repairs. And of those repairs, about half of that expense was to pay for labor!

But the thing is, I’m one of many drivers who have had a financially negative experience with the American automakers. On the flip side, though, I’ve been borrowing my Mother’s spare 2000 Honda Civic for a few months now and not only does it get 31 – 33 miles to the gallon where the Blazer got 18 miles to the gallon, but I’ve not had one problem with it. I drive a lot for my job and since I borrowed the Civic I’ve put about 5,000 miles on it – no problems. With the Blazer, though, traveling that much almost certainly meant that I needed to stop at the shop one weekend for minor repairs.

American made cars are poor quality, energy inefficient, and cost way too much to manufacture. Unless these core problems change, they’ll never reclaim their former dominance in the market.

Is this stuff really that hard? Couldn’t any high school student educated in basic economics come up with a solution to the “problem” that the major automakers are facing? Hey, we can even get more in-depth about a solution and tell the automakers to cut expenses – a novel idea! Or how about this one? The automakers should be making more products that the consumers want to buy. Eureka! We’ve figured it out!!!

Seriously, it is a disgrace that the big three automakers are facing the problems that they are today. These companies deserve what they’re getting – they didn’t produce fuel efficient cars in mass quantities when the consumers demanded them as far back as ten years ago and are currently doing nothing to sell the excess quantities of their product. There are a lot of people out there (like me) who would LOVE to buy a new car. In fact, you could say that someone like me is constantly in the market to buy a new car.

But most of the people in my situation are realists. We know that we can buy a good used car that is only one or two years old for 60% – 75% of the price of the same model if it was brand new. Why would anyone pay the premium to purchase the new car in this economy? With all of the executives driving the buses at these companies (pardon the pun) can it be that none of them realize that they need to cut prices in order to stimulate sales? I’m a big fan of Chevrolet (and I have no idea why since I’ve paid more to have my Blazer fixed than the thing could ever be worth). I’d love to buy a 2009 Chevy Impala. Yahoo! Autos suggests that the model I would like to buy starts at $28,000 and that the 5-year cost to own this car is $52,000.

Why would I ever buy that car in today’s grim economy? Is there no one at Chevrolet who is looking at this and saying, “Hmmm… We need to fix this problem.” Better yet – do the people at Chevrolet even see this as a problem? Here’s why they should.

I can go to Enterprise Rent-a-Car and get a certified pre-owned (used) 2008 Chevy Impala for $15,000. Read that again. I can get a one-year old Impala for about HALF of what a new one costs.

How can you fix the problem that today’s automakers are facing? Simple. Cut prices and move product. If this doesn’t happen, then you and I better get ready to pay a little bit more in taxes because you know another government bailout won’t be too far behind.