Objective: Replace Car by 3Q 2008

Posted by Analyse at 9:15 PM

Tuesday, November 20, 2007

Moolah management at home has always been a hot topic. Frenchguy is the kind who would look at his finances closely - I mean, looking at his bank account almost every night, afraid that Alibaba might discover his hidden euros. On the contrary, I hate talking about money matters to the point that I leave Frenchguy manage our finances.

Here's our trick. We have separate and common accounts at home. A certain portion of our salary would be transferred monthly to our common account - destined to pay mortgages, taxes, groceries, nanny and househelp salaries, vacation expenses - everything. Then another portion would be destined to buy company stock options - a good investment as long as the company is in good health. The graph shows the value of our stock options when I started to buy till today. Not a bad progression, right? That makes me virtually rich.

The remaining amount of our salary is considered as our pocket money. And mind you, my finance manager computed up to the last cents that I only have enough to pay the canteen and gas for my car. A bit exaggerated, okay. But reality is almost close to that, lol. So don't even try to borrow money from me. When I say I have no cash, I mean, no cash!

Frenchguy sent me a message this afternoon (he's in the US) saying: You have to start looking closer on your finances now if you want to change your car next year. Huwatt?!!?? Is that some kind of a joke or what? How in the world could I save for a car next year from the few euros left in my wallet every end of the month? And hello, haven't you seen oil prices? It's soaring high but my pocket money remained the same, blahblah here and blahblah there! And why should I pay it alone, aber? I swear, if I pay it with my own moolah, you will never touch it, except for car washing and changing tires. Mokong na 'to, hmp.

So after negociations and another negociation, we settled for a common accord that I contribute less in our account and buy less stock options. It's no way that we borrow money from the bank and pay interest for a product which depreciates its value the moment I turn the key. Anyway, it will be a small, not-so-expensive, most-probably-second-hand car* which I will use to go to work, do the groceries and shopping. No big deal.

P.S.: He still agrees to wash my car and change tires.

*Concessionnaire cars, mostly 3-6 months old, with very few km could be bought at a very interesting rate here in France. It's a widely responded market that, at a certain point, constructors started to offer a large discount for a purchase of a brand new car to compete with this market.

Graph from this site.


ScroochChronicles said...

Galing ng graph na yan ah. I should do that so we can track our expenses. Pero sayang naman if you have to let go of some of your stock options. Pag-isipan mo yang mabuti. We botched a real good deal on a stock option given by a dwindling company tapos early this year their price went 2x par. Peste talaga!! Pagsisi ay nasa huli....

gracita said...

the arrangement in our house is just like yours. harvey does the finances (he loves investing in stocks too!), while i do the spending. i don't have the skills to do our finances...if it were all up to me, we'd be broke, hehe. pansin ko lang ha, don't know if it's true for all, pero bakit ang kuripot ng mga europeans? parang parati silang walang pera samantalang haller, ang laki kaya ng sueldo nila! :)

dito naman sa ME, sobrang mura ng mga kotse, because of the lack of tax. mga officemates kong swedes would buy their cars here tapos after a year, would ship it to their home country. sabi nila, cheaper parin daw kahit ganon.

Francesca said...

pareho tayo ana, at the end of the month, centimes na lang naiiwan,sa sahod haha,kababayad dito, bili don. Buti na lang wala kami anak ni Lolo, kundi, nakupo, dagdag pa pampers and milk, patay na.
Mgastos na nga food and literie ni cheeky, eh, hihihi.

Talaga, bili ka another car?
Oks na oks!

raqgold said...

napansin mo rin, super mahal na ng bilihin, arrrgh. and watch out, we just visited our meat shop yesterday and he told me that the prices of meat would go up early this year... grabe. you cant buy anything from one euro. we also need a new car, esp since may bagong rules na naman about pollution here in germany. gastos... i need to learn to budget too.

Mitch said...

You're tagged > http://www.mitchteryosa.com/2007/11/21/my-husband/

Anonymous said...

Re: cars, my protocol is always let the company buy me the car – cheaper but we here in the Netherlands are taxed by this as this is seen as income by the tax department.

As for buying a car from my own pocket – I never buy on a mortgage deal. I always prefer to buy in cash. With the gasoline price skyrocketing (stats say NL is the most expensive per liter in the world), my objective is to buy a car that consume less fuel. So for me, I always go for economics versus aesthetics and image, because as you said the value of the car depreciates (the moment it gets out of the car garage dealer). We don’t profit from it and car maintenance costs are the highest in the world in Europe due to taxes – road tax, tax on oil, tax on environment, etc.

Have a look on brand new fuel efficient cheap cars. If you have €8K - €15K you can buy the car cash. No mortgage –interest headache, and definitely no maintenance cost for the first few years (as opposed to buying second hand).

I can relate well to your French guy. I look very closely at my finances and I rarely splurge. I guess my vices are mostly travel related but even then I plan them ahead of time so as to get the most value of my purchases.

Its also best to move all your savings to internet banks as they offer more interest rates. Here in NL we pay 1.2% tax over our savings if we reach XXX amount, so if we don’t pay careful attention to this, we end up losing money to the government since most big banks have 2+% interest rate.

One thing for sure, many people spend way too much than they earn. There are in fact ways to spend wisely. I am quite kuripot even back in the Philippines but I learned to maximize my money’s worth with the help of the Dutch ‘tight’ mentality on finances.


Lucille said...

we also check boursorama everyday, wow the progression of your company's stock options is quite good huh, kay hubs is not so good lately, hopefully will go up again soon.
as to our financial management, si hubs ko rin ang namamahala, as a financial analyst he can manage it very good than me, specialty nya kaya i let him manage all our finances.
hey! for your new car...go for a brandnew one! hehe

geri said...

I laughed at the Alibaba line :)

Rhada said...

sa bahay namin, ako naman ang taga-handle ng pera...kasi nga, mayroon akong bulsa sa balat hahaha.

MegaMom said...

Analyse, I like buying 2nd hand cars too as long as well maintained. I never think of them as assets: they are truly liabilities, considering the expense in maintaining them, insurance, gasoline, AND most importantly, depreciation costs.

As for stocks, good on you, nababantayan mo. I invest and forget. :) Am mostly looking at long-term returns anyway.

I do go into short-term HY investments it if I want a "luho" pretty badly. Like the time I wanted a hi tech gadget, as soon as I got my year-end incentive, I used it to go into a short-term investment and cashed in right away as soon as I earned the dividends to buy my Treo. I never get too greedy. Besides, it's a gamble too. :)

Kuripot mga European kasi mataas and taxes, di ba? At least you see where the money goes. Dito sa Pinas, haaaaay buhay! After paying so much on taxes, I still have to put up with potholes on the roads, and still have to send my kids to private school. Where, oh, where does it all go????!!!!

Dhanggit said...

second hand cars are not that bad! specially here in france its not such a big task to find one thats in good condition and affordable..i hate money matters too!! but nevertheless i always have the last word in all decision making..anyway our money are invested in stocks (that's been like a roller coaster ride these past few days) and we rarely have big expenses....only when we travel, we love to spend our money there :-)

Analyse said...

ScroochChronicles, the graph shows the progression of our company stock options the moment I started buying (2004) till now. Got that from the net lol. And nope, I won't touch the stock options to buy the car, anyway, stock options are blocked for 5-7 years so mine are not yet available. And once they're available, they willl be directed right away to the bank to pay our house mortgages. Para matapos ng maaga ang bayaran.

And yes, stock options are somewhat synonymns of risks. So better not put all your investments in only one company.

Gracita, nope, not really. I'm not a big spender, I hate shopping e.

re: Europeans as being kuripot - better check DP's comment, I think she's resumed it quite well. Europeans are not consumers by nature. Like they would rather repare broken appliances than buy a new one. They would prefer to keep lola's clock than buy a modern one. And they're wise spenders and they're environment conscious generally. So it's a cycle, the less they consume, the less they pollute mother earth..

on being walang pera all the time, i think it's because their money are invested directly, so no cash.. and they're not show off, they don't really care on what brand of clothing they wear or what kind of car they drive.. and when they buy something, they integrate at once the consummables behind.. like if i buy a car, i have to make sure that it doesn't consume a lot, otherwise, with the price of gas right now, i'll surely be broke!

Francesca, buti na lang di na gumagamit ng pampers si cheeky hahaha..

nope, not another one, i'll just replace the old one..

Raqgold, naku, france will follow germany in the implementation of CO2 limit for cars, so i need to take that into account.. and anyways, i won't buy a high-consumption car no, mahal kaya ng gasolina hahaha..

Mitch, naku, dami ko ng utang sayo ha...

DP, if only I could ask the company to buy me a car no haha.. but no, I don't have this privilege.

I'll look on brand new cars too, as I said, they give big discounts lately, so why not.. but concessionnaire cars are almost brand new and still on guarantee.. but like you, i'll never buy a car on a mortgage deal either.

re: internet banks. i've heard that they indeed offer higher interest rates.. but anyway, I don't keep a lot of moolahs in my savings account, just enough for monthly consumption, so it's ok.

and yes, i cannot agree more. there are a lot of ways to spend wisely..

Analyse said...

Lucille, lol, boursorama addict ka rin pala.. oh yeah, the value has more than doubled since i was hired.. hope it will continue.

geri, lol.

Rhada, lol, bulsa sa balat ba?...

MegaMom, you could buy 2nd hand cars here with less than 6000 km, 3 months old and 30% off. The concessionnaires are employees of car companies, it's their way too to increase their sales.

On stocks, I don't really follow it closely. Anyway, as long as I don't sell, I don't touch anything. I'm just virtually rich.. but people here check stock options every minute yata.. so I'm updated too..

Year-end incentives, dividends etc are mostly invested into stock options, that's our way to skip taxes too.. it's a gamble, yes, but since it's a company stock option, we have all mouth-watering advantages that even if the stock drops down to 50% of it's value, it's still a steal.

Oh yes, taxes here are really high. But as you said, we see where our money goes.. but I still have a lot to complain here hehe..i'll never be happy.

Dhanggit, same here... it's only when we travel that we don't really count hehe..

Christianne said...

Wow, a new car! What models are you looking at? We're thinking of buying our first car next year. Any tips for choosing a family-friendly, environment-friendly, and wallet-friendly car?

Nagsisi ako that I encashed all the stock I've bought since 2003 when we moved here, dumoble na kasi ang stock price ng kumpanya namin since then!!! But we needed the money to get started on our life here, and since then we've been saving about 20% of our income so I think makakabawi naman kami eventually :)

mitsuru said...

buti ka pa walang utang. ako marami. haha.

seriously, it's better to buy a brand new car. in the long run it will be more economical kahit pa dealer certified yan.

if you're new here in the states, you need a "credit score" esp if you haven't established a credit history, walang magtitiwala sayo if ever you apply for a loan/mortgage.

In the Phil, mas may tiwala pag wla kng utang, dito bliktad. kaya, lahat dito me utang. ha-ha.

Darlene said...

Blog hopping bumped here in your very interesting site. God bless!

Analyse said...

Hi Christianne, we have a Renault Scenic and we're really happy with it and don't regret the purchase. I've written why we have chosen this car here. Check it out.

20% is not bad a saving already. put it back into stock options and make it profitable ;)

Mitsuru, haha, i know about the credit history ek ek there in the US and you just cannot beat that because it's the system which is like that... here, mahirap mangutang, they will have to dissect your 'credit history' and if the bank finds out that you're already spending 70% of your salary to pay rent, other utangs etc.. then, they will not grant your request.. because you need available cash to live..

Darlene, thanks for visiting ;).

haze said...

If your budget permits you to have a new car then go! But if you are a practical person then second hand car will do, anyway, in France 2nd hand are not bad especially if you know who have used the car (like if the car belongs to friend, family or neighbor).

As for us we bought 2nd hand cars (twice already) from family or friends just to make sure that car were in good hands :D!

Speaking of money matters, we have this table he made from Excel. We are good both in budgeting ! Both opinion are important but when it comes to buying expensive things at home I always hesitate and he's not! I always go for less expensive kasi lalo na pag sale ;)! Sayang din yung less 50% di ba !

ann said...

Kung pwede nga lang dito ka bumili ng car dahil very affordable.

Ok naman pala si hubby mo at least tipid ka na sa bayad sa carwash...hehehe.

dangkin said...

wala ba dyang '60 months no pay no interest'? kasi at least with these terms, parang cash na rin ang pagbabayad mo... just like what we did ;)

Analyse said...

Haze, i have an excel file too lol, but im quite lazy to update it now..

Ann, pwede bang padala mo na lang sa kin hehe.. xmas gift ;)

Dangkin, nope, i dont think so.. 60 months? that's not bad, hmm..

chase said...

Hahaha we are planning the same arrangement as well at home. We are keeping our own accounts but we are planning to open a third account which is a joint account and place some money everymonth like 30 percent of our salaries for example

julie said...

Ana, good for you to have stock options. Ako wala, hehehe. That is why I am planning a risky career move that would give me a better options. If I am successful doing that move.

Go for the car that suits your budget and needs. Second hand would be ideal too since you buys always travel a lot.

auee said...

nag-tumbling ako sa post mo ha... am glad you came to an amicable settlement with your hubby... my my and I thought hubby was strict!