My father traded in his 134,000 mile van for a 39,000 2005 model. His out-of-pocket expense was zero dollars, and he bought the used van for well under its blue book value. I started thinking that many people may want to take advantage of this economic downturn to upgrade their vehicle. While I don’t recommend buying a new car, a quality used car can be the next best thing.

Pros for Buying a Used Car as Opposed to a New Car

• We might call it a new car, but a used car is only new to us. The difference comes in the value the car loses when you drive it off the lot. A new car can lose a lot of value simply for having one owner, even if you only put ten miles on it. This is why they sell Gap insurance for new cars, so if its totalled you can actually get back what you paid for the car.
• A low mileage used car can save you money on the sticker price.
• Many used cars come with a dealership warranty, at least if they’re certified.
• The models have been road tested and consumer reports among other information organizations can guide you towards the safest model of used car to buy.
• Insurance on a used car is likely less than a new model.

Cons of buying a Used Car

• There’s likely something wrong with it, even if its small.
• A used car has some risk involved with the maintenance and mechanical issues. If it’s a high mileage used car then those risk factors go up exponentially.
• You have to be more vigilant when you purchase the car, like getting an upfront mechanical check so as to determine if anything might go wrong in the near future.
• Used car dealerships sometimes don’t have warranties or anything other than a 30 day guarantee. Be sure to look at the fine print before signing up for something you might regret.

Tips to Save You Money when You Buy a Used Car

It’s imperative to always ask to have a mechanical check done on the car, outside of the dealership. Many dealers might try to smooth talk you, but for the few hundred dollars it costs to have a mechanic look at the car, you can’t go wrong. When my dad bought his van, he worked on the salesman for over a week. He didn’t buy it that night. He had a price in mind after the first visit to the dealership and he just kept at the negotiation process until he was able to receive the figure he wanted. Car salespeople need to do business nowadays, just like the rest of us. It’s ok to ask for a deal and wait until you you feel financially comfortable.

The government recently introduced a bill that would make a nationwide database of titles a reality. This would show you if the used car you’re looking at had been totalled in the past. Of course, totalled cars have salvaged titles if they’ve been repaired. Stay away from these used cars, as they’ll likely be a pain to resell in the future. Not only that, but they’ve been put back together after being completely wrecked — it’s just not a good idea to buy something of this nature.

If you’re still not sure about a car’s history, like if you’re buying from a private owner, then you could run a check of the car’s history through CarFax.com or another service. These services give you information related to even tiny fender-benders.

When you approach a used car dealership or a private owner, be sure you have your budget in mind, a fixed price you can afford, and the willingness to walk away and try again another day. Again, saving money in this situation boils down to being able to see the purchase in a different light. If we need to be frugal, then we should practice our negotiations skills. Keep the right perspective and you’ll be saving money and feeling good about your new, used car.

One of the most obvious ways to save money is to reduce debt. The biggest pain in the financial rear comes from credit cards. If you’re in good standing with your credit card lender, then you probably enjoy a finance rate around 10%. The more unfortunate might see rates around 20% or even higher. What can you do to reduce your credit card debt and ultimately save yourself those high finance charges every month?

If you read our latest Frugal Mindset post, you probably know we’re big on financial perspective. When you change the way you see your credit card, then you’ll begin the road to change. We can use a credit card to buy everything, right? We can. But we shouldn’t. A credit card should be a lifeline in an emergency, not the financial ties that bind us. Here’s some steps to severing our ties to a credit card followed by a few tips on reducing credit card debt quickly.

How to Severe Ties with Your Credit Card

1. Cut it to pieces. It takes willpower and determination to do this step, but its the most effective. We don’t recommend closing an account, as credit cards do help your credit score (when paid on time).
2. Call the creditor for reduced interest rates. A quick solution to a high interest rate. Don’t be too optimistic with this solution. The dire financial state has made many creditors raise their rates to make up profits. Still worth a try.
3. Transfer the balance to a different card. While not the best solution, many credit card companies offer low interest rates on transfer for a limited time or for an extended period of time. It can save you a substantial amount, unless you go back to the old card and start loading up purchases.
4. Steer clear of cash advances. The interest rates on cash advances usually exceed those of standard purchases. To keep your credit card in check, stay away from these outrageous rates.

How to Erase Credit Card Debt

After you’ve taken a few of the above steps, you can begin drafting a plan to tackle your existing debt. For starters, you should tabulate the amount you owe among all your cards. This can help you create your plan.

A plan should be tied into your budget. You need the money to pay more on specific debts in a downward triangle approach, the beginning point should be the least amount of debt, unless that debt accrues a low interest rate. For instance, a $650 Department store card with high interest rate should be first obstacle in the pay off.

I recommend focusing on the small debt first, then taking on the next biggest one. The only exception being the low interest rate small debt one. If you have large debt with a very high interest rate, then that needs paid off before a low interest rate small debt card.

If you’re like me, then you probably want a timeframe. How long will it take to pay off xyz card with this type of interest rate? An Excel document can calculate the amount of time it would take to payoff a debt. You don’t have to do the heavy lifting though. The folks at Vertex42.com have a free credit card debt payoff calculator using Excel. It’s very well done and free. It’s very simple to use too and gives you the amount of time it would take to pay off debt with a certain interest rate.

Download the Debt Calculator Excel File

Good luck paying off the excess credit card debt. Once you have that obstacle out of the way, you will realize monthly savings from the lack of finance charges.

I was talking to my mother the other day. She can still remember her father ripping napkins in two at the dinner table. They were frugal. But that was a different time — a different age. It was frugality born out of necessity, not unlike our trying times now.

Most of want nice things for ourselves, but we also want security, financial freedom, and independence. We work extra hours to make extra money. When our determination to save money falters, we might dine out, buy something out of our price range, or impulsively shop. It’s our culture. More and more of us have grown up in the buy now pay later era. We’re not accustomed to the thrift and cut coupons era of old.

With more and more people losing their jobs, or fearing a loss of income, frugality has again taken center stage. What does it really mean to be frugal. It’s more than a simple desire to save money. It’s sacrifice, starting with lifestyle choices. A frugal approach to life changes one’s perspective. It’s not unlike Zen. It’s transforming and liberating.

Frugality is storming the nation. We can see from the retail numbers than less and less money was spend during the holiday season. Frugality is more than just spending less. It’s about changing ways, learning to live without, and buying quality products inside a budget.

A traditional family nowadays should be able to make due with less. The more stringent among us may have taken measures to ensure we can have financial security. We may have cut subscriptions from cable, satellite radio, magazines, newspapers, and more. Those money savers have likely found ways to entertain without spending too much dough. We may visit parts, playgrounds, museums, instead of dining out, going to the theater, or taking some extravagant vacation.

Frugality boils down to perspective. We need to filter our vision of the world through a different lens. Many of us cannot continue to buy now and pay later. Those days are in the past. Now it’s time to cut costs, pay off debt, and start storing for the future. It can be a rough change — one that takes trial and error, but the benefits are lifelong.

What change can you make today that would affect the way you spend money?