KK85

I agree with this. Those of us who emigrate to be with an already resident spouse are very lucky - we have a softer landing spot, and someone to not only show us the ropes but to lean on financially/materially until we have found our feet. Without my husband and in-laws being kind enough to pick me up and collect me, I'd not have been able to get to/from my first job here without a 60 minute walk each way along a highway that, at the time, was shrouded in snow and ice. And without that job, I'd not have been able to afford to finance a car, let alone purchase one outright. Therefore, a credit score is necessary. And not only to finance a car - without a credit score, how are we supposed to rent a property, let alone get a mortgage? For most of us, we have to put ourselves in debt before we can reasonably expect to build any quality of life - perhaps there is a flaw in the system there. The lifestyle civilservant and tom169 have given a nod toward, while a great aspiration, is only attainable if one has saved/inherited money to begin with. It's not realistic for those of us who are just starting out and/or who have a more humble disposable income.

This is another very valid perspective, which I appreciate hearing (and need to hear - I truly have very little clue about cars to begin with. This makes complete sense to me).

Thank you for these pointers, too! I will take a look at all of these resources.

civilservant

80% of millionaires in the US are first generation. I came to the US with $4k in my pocket and a wife who had debt, trust me, it's do able.

Your biggest wealth building asset is your income. If you are giving it all to the bank every month, you will NEVER save and build wealth. It's impossible.

KK85

Oh, I'm sure it is doable, but it can be very difficult, as I'm sure you have experienced. I came to the US straight out of university - I worked through university, but any money I earned went into the immigration; my husband did not contribute financially to the immigration costs as he was supporting a terminally ill parent - and so when I got here, I had the cash in my bank account (approx $200), no foreseeable income of my own, and the messes of his and his mother's debts to contend with. It has been a very steep learning curve, and even just having a buffer of enough cash to purchase a car would have removed so many hurdles for me.

My income is humble, but so are my expenses. I agree that giving a portion of it to the bank each month is not asking for a great return, but again it is very difficult in these early days (I've lived here less than a year) to get a foot in the door without first having to make some financial sacrifices/compromises. I admire and respect your outlook and the way you live, and hope one day I will be in a position to do the same, but I'm still having to tread some stepping stones for now. I really do believe this is the reality for many, if not most of us.

petitefrancaise

Wrong. If you buy a $2k car and spend $2k in repairs you do not have a cat worth $4k, you have a $2k car with the start of many repair bills.
A car cannot be considered an investment, it is an expense necessary for living in the USA.
The answer is to live within a reasonable distance of work so that you can walk/bike or use public transportation.
OP i have recently bought an ebike to replace some of my car usage, it's fab!

civilservant

I agree that it is the reality for many, even if it shouldn't be. I used to be that person (especially with cars) who drove something nice for, as much as anything, the prestige. Like Ramsey says - you drive something you can't afford, to impress people you'll never meet (at a stop sign), or people you don't really like. It's stupid.

I don't pretend that I am quite there yet (the wifes debt is still to be overcome!) but we have paid off $25k in 12 months and have about another 6 to go to be debt free. The more you cut, the faster it goes.

You aren't going to get back what you put into the car anyway, so my way still saves you $1k.

KK85

My husband is/was that guy. A couple of years ago, he took out an insanely high monthly contract so that he could have the newest model of Samsung phone, and dropped it on concrete within a week, rendering it unusable. We are still paying for the phone today, while he's had to suck it up and use a crappy old model like I do because now he can't afford anything nicer. I was quietly delighted for the lesson it taught him, but of course it's no fun spending $180 per month extra on our phone bill for absolutely nothing. It is, as you say, stupid.

Good for you. It can be quite hard marrying into debt when one is so frugally minded oneself, I've found. It will be many years before my husband's debts are cleared, but we have at least made them manageable. This is precisely why I chose to build my credit from scratch instead of tether myself to my husband's accounts/credit score, which many spousal expats do - any renting or mortgages we obtain in the more immediate future will, where possible, be based solely on my score/finances, as his are shot.

tom169

I saved up cold hard cash in the bank prior to moving. You know... Planning ahead.

lizzyq

While a UK university student this would have been harder to do, I know the OP was planning ahead and saving as much as she could in her circumstances while also trying to minimise her student debt. Everybody's circumstances are different, yours sound like you had more opportunity to put money away.

KK85

Thank you, lizzyq.

Tom, I am glad you were able to have cold hard cash in the bank prior to moving. Planning ahead is important. For me, it was indeed quite difficult to save money while also juggling the costs of university, immigration, and supporting my husband while he supported his dying mother. I planned ahead, and the first priority in my planning was not financial. Frankly I was glad just to get here when I did, even with barely anything in my pockets. We are all on very different paths, and doing the best we can under our circumstances.

Rete

As a young adult, I was able to build credit quickly with store charges and then in 1972 hubby and I applied for our first car loan. A 1972 Datsun station wagon. Cost was well under $10,000 and we financed it through GEICO as hubby was a federal employee. After that and our divorce it was only used cars for me until 2001. If I had the bills in front of me, I would probably discover that I paid the same plus more than what I paid for the used car to keep it up and running, often finding myself stranded somewhere when it broke down. In 2001, I could once again afford to by new and have done only that since then. I've never paid more than $18,000 for a new car. I like Hyundai and they are inexpensive. I buy sedans not SUVs or four wheel drives. I lived just outside NYC and know how to drive in 6 to 10 inches of snow without the need for 4 wheel drive or studded tires, etc. I would only buy new when I got 0% financing and I put down at least 1/2 the price of the car upfront. The choice is there to buy new or pre-owned/used so that the buyer can make the choice their wish.

As for building credit, don't know why Harvey has not called his credit company and asked for a larger increase in available credit since the ratio between used and unused will positively affect his credit scoring. Also don't know why it is so important anyway since he already has a mortgage, is not over extended, lives within his means, etc. Unless he wants to be purchasing something expensive in the near future, i.e. travel plans, home improvements, he either needs to ask for more credit or look into obtaining a different card with a high limit and cancelling out the first one.

SpoogleDrummer

You're making the assumption that their car isn't still worth at least $1K more than yours or if it's lasted them longer if you're assuming they're driving it in to the ground. Having said that the $5k car costs more than 5K due to the interest you pay on the loan and the extra insurance you have to have on it to meet the requirements of the bank etc (assuming you would go the cheap route on a beater).

Personally I still go the new car route because the peace of mind of knowing your wife and kids are unlikely to break down when they leave the house is worth it to me, that and the fact work pays for one of my vehicles. If you really want to save money don't have kids, they cost a lot of money that you'll never get back and stop you from driving beaters.

civilservant

Well that's handy, since I don't and never will

Owen778

Yes and no.

Dave Ramsey provides some great advice on managing and clearing debt. And then he provides some truly terrible advice on investing once people use that advice to make themselves debt-free.

Mr Money Mustache gives some great money-saving advice, intermixed with some advice that is impractical for many and some that is just too extreme. And he will never escape accusations that his blog income and blog-related travel means that he is not living the life that he preaches, or to some, that he's a hypocrite.

YNAB - I haven't had any experience myself, though I've heard good things about it.

civilservant

Out of interest, what's so terrible about it? I wouldn't bank on the returns he states, but that's just being conservative.

Owen778

Several things, but the main problem is that he encourages people to invest through his network of financial advisers, who often charge really high fees.