You may have heard the advice not to buy more house than you need because you will pay more in so many areas—larger mortgage, utilities, furnishings, property taxes, maintenance.  Buying a house that is large enough to meet your needs, but not too large, will save you thousands of dollars over the life of your mortgage.

The same holds true for automobiles.

My husband and I decided, just a few months after having our first child, that we should just go ahead and buy a minivan because we planned to have more children in the future.  We traded in our $12,500 Toyota Echo that was just a few thousand dollars from being paid off for a $25,500 Toyota Sienna minivan.  We traded in $250 a month car payments for $473 a month car payments.  We traded in 35 to 40 miles per gallon for 20 to 25 mile per gallon.

Within a year of buying the minivan, gas prices spiked.

Because we were impatient, we saddle ourselves with 5 years of car loan debt (though we did make extra payments and paid it off in 4 years and 4 months), extra gas expenses, higher repair and maintenance costs (because it was a larger vehicle), and higher insurance premiums.

While we did go on to have other children, our second one did not arrive until 4.5 years later.

Simply put, we bought too much car, and we paid for our mistake.  We would have been in a much better financial position if we would have waited to buy the minivan until we had our second child.  We would have saved thousands of dollars simply by waiting until we truly needed a larger vehicle rather than buying it for some future need we knew we would eventually have without knowing when.

If you are looking at buying a car, ask yourself what your day-to-day needs are.  If you occasionally need a larger car but most of the time can make do with a smaller vehicle, are there other ways you can still have a larger car when you need it without buying it for daily use?

If there are times that you think you may need a bigger automobile such as a family vacation when friends are coming along, why not rent a vehicle during that time rather than having a larger vehicle just in case to drive every day?  If you have a truck that you use to haul wood during some months of the year, can you borrow a truck from a friend or rent one for your hauling expeditions?  Is a large truck with poor gas mileage necessary on a daily basis?

One of the tenants of frugality is to buy just enough when you need it.  This is true both of home and automobile purchases.  You may find your bottom line improving dramatically if you just buy as much as you need now without being swayed by future needs.

Melissa Batai

Melissa Batai

Melissa, a mom to three little ones (ages 7, 3 and 1), blogs at both Mom’s Plans where she writes about living a fulfilling life on less and paying down debt, and Fiscal Phoenix where she writes about rising from the ashes of your financial mistakes.