Progression and Regression [August 2014]
Category : Uncategorized
This month I pulled the trigger and traded in my precious Mazda3. The car had about 130k miles on it, and I was plagued with both front and rear suspension problems. Already having sunk about $1k in ‘fixing’ the shocks & struts over the last year, I decided to run some numbers.
$14k – price paid with taxes and registration
$2k – trade in value
77 months – timeframe of ownership
Averaged out, the price per month of the car was $156 per month. Insurance over those 77 months was an average of $70 per month. Totaling the two together, I drove that car for $226 per month. It gets pricier though. In the last 18 months, I’ve been plagued with repair after repair on that Mazda3. The monthly repair costs on the Mazda3 have been around $128 per month. Excluding maintenance, my total cost to drive that car was $354 per month.
The Chevy Cruze I’m leasing is $179 a month for the lease payment and $135 per month for insurance. This totals $314 a month.
A no-brainer right? Drive a brand new car for $40 less a month… Not exactly. I derived these monthly numbers by more of an accrual accounting method. I owned that Mazda3 outright, so my monthly cash expenses are actually going to go up significantly. It’s an interesting lesson in cash versus accrual accounting: looking at the amortization of a piece of property helps you figure out what you actually paid per month for it, but not what you are dishing out each month in cash. The monthly expenses that I track are essentially all cash outlays.
August was the strongest dividend month I’ve ever had. I spent a couple hundred more on food than I wanted, but I guess eating is necessary.
Dividend Income: $266.42
Percentage of expenses paid by dividend income: 26.3%
Over a quarter of my expenses were paid by dividends this month, however, I’ve missed my $25 a day budget for several months now, and it’s going to get inherently harder with spending more cash each month on the leased car. I’m upping the goal to spend $30 a day. Progression and regression.