How to Make Good Money Decisions in The New Normal

I want to talk to you about my car. 

I mean, it’s quarantine, what else is anyone doing? 

(Seriously, if you have something better to do please tell me, I am deeply quarantine fatigued and am taking all book, podcast, and Netflix recommendations. Want me to get a new streaming service? I’ll probably do it. Unless it’s Quibi.)

When I started writing about money, I had much stronger views on cars. Specifically, I was of the (ugh) Mr. Money Mustache opinion that you should always buy cars in cash and they should be very cheap, and this was the One True Way.

Ahem. Apologies, first of all, for *waves hands* that. 

I still have what I think are reasonable limits on car affordability—most of us cannot and should not buy a car that costs more than our annual income, for example!—but I’m more aware that I have the limits I do because I deeply don’t care about cars.

Except Little Car, my beloved Toyota Yaris who has served me well over the past 6 years.

Who I have decided to part with?! 

Selling the car is the right decision 

The thing is, when I think about selling Little Car (also fondly referred to as my “minimum viable car”) it really comes down to this: It’s the right decision. 

This summer has felt like the summer of realizing that oh right, we are in the new normal, and a lot has changed. Six months ago, I was commuting into an office every day, which isn’t going to happen for the foreseeable future. Over a year ago, I was taking my car to the gym every day while my husband took his car to work—also probably not happening anytime soon.

With things settling into “just how we live now,” it felt like the right time to take a look at where we wanted to re-evaluate some choices. Some of the choices were easy (“Yes, get the new outdoor furniture, it’s the only place we are vacationing this year”) but others took a little more thought.

Which brings us to Little Car. 

How to make (or re-evaluate) a good decision

Selling my first car feels big, so it took a second to come around to the idea. That’s why I want to share how we made the call, because I think there’s something that you could apply to any of the bigger life decisions you might be making right now. 

We asked ourselves three questions:

  • What’s the best that could happen? We would only have to maintain and insure one car for the next few years. We’d save some money, save some time, and get cash for a car we truly don’t need right now.
  • What’s the worst that could happen? We realize we need a new car in the future, and we use the money we saved from selling Little Car (plus extra money we have already been saving for a new car) towards buying one. 
  • How likely is the worst-case scenario? Fairly likely, since we’d already been planning on replacing Little Car in the next 5 years.

When you look at it this way, the best-case is pretty good, and the absolute worst case scenario is…. Something we thought would happen eventually anyways. 

It’s also highly reversible, since as fond as I am of the Yaris, it’s not The Last Car in The World. We could always get a new car.

If you’re looking at some bigger life moves as a result of the ongoing global pandemic (a good reason if there ever was one!) these questions are a great place to start, especially if you’re working through them with a partner.

Optimize for the right variable

One thing you should consider when you’re thinking through your choice is whether you’re optimizing for the best case, or avoiding the worst case. 

This is something I learned as part of a course I’m currently taking on decision making (it’s great, highly recommend getting on the waitlist) but your decision might be different based on which factor you optimize for.

Let’s say the worst thing I could possibly think of is buying a new car, and I am only willing to accept this car for the rest of my life. It’s silly, but I mean, imagine that was true! 

If it was, maybe I’d want to optimize for avoiding the worst case (buying a different car) at all costs. If you’re facing an Actual Bad Case as your worst case scenario, not just my ridiculously exaggerated worst case, optimizing to avoid it at all costs might be the right call for you—even if it means giving up some of the potential best-case benefits. 

I can’t tell you how bad your worst case is, just like you can’t tell me having the same car for the rest of my life isn’t realistic (I mean, ok, yes you could, but go with me here). But being comfortable with the worst option, and having ways to mitigate it, might help you move forward towards a great best case scenario without having to worry as much.

Buying the car was the right decision, too

If you’ll allow me a small moment of sentimentality (insert Ron Swanson “I do what I want” gif here) I’m so glad I bought Little Car all those years ago, and I’m grudgingly happy I bought it in cash, too—even if it’s not how I would do it today.

Because I had a car, I was able to move to the suburbs and move in with my now-husband. Because of that, I took an amazing job out of the city centre, and was able to get a dog. Since my commute was short, I had time for side projects, started this blog, and finally spent time learning how to get my money in order.

Getting my money in order was how I could manage to do things like buy a house, get married with no debt, and renovate our kitchen. It’s how I’m able to do stuff like that and still save for retirement

Am I saying it was all because of the car? No, but it wasn’t not because of the car either.

Making the right call on getting a car I could afford, that still managed to give me all the benefits of having a vehicle, was the right decision and I’m forever glad I made it.

Just like selling the car is the right decision now.